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KEI Spotlight

North Korea Mines New Revenue Sources in Its Trade With China

January 27, 2023

This article was published on The Diplomat on January 26, 2023.

North Korea has spent much of the pandemic financing its weapons programs and imports with stolen cryptocurrency. However, with trade between North Korea and China expanding in 2022, there are also signs that Pyongyang is looking to grow potential legitimate revenue streams.

While still below pre-pandemic levels, North Korea’s trade with China began to rebound last year. Exports were up just over 130 percent from 2021 levels to $134.4 million, though that’s still only about 60 percent of their pre-pandemic levels. Imports from China were up a more robust 247 percent, reaching $893.6 million, but still well below the $2.6 billion North Korea imported in 2019.

Prior to the pandemic, North Korea began to adapt to a series of U.N. sanctionsput in place from 2016 and 2017 in response to its nuclear weapons and ballistic missile tests. The sanctions regime prohibited virtually all of North Korea’s leading export items. By 2018, the implementation of those sanctions had largely eliminated the export of sanctioned items to China, while exports of non-sanctioned items began to grow.

Chief among those were assembled watch movements (the engine of a watch). Prior to 2017, North Korea had not exported any watch movements, but by 2018 they were its top export to China. Other non-sanctioned items that grew pre-pandemic include molybdenum, tungsten, ferrosilicon, wigs, and fake eyelashes.

To read the full article on The Diplomat, please click here.