Spike in Trade and Investments between North Korea and China

Source: Asia Times: North Korean-China trade hotter than kimchi

Chinese businesses have forged new business ties with North Korea and are quick to cash in on North Korea’s investment potential and trade.

Chinese investment in North Korea reached $38 million at the close of 2006. North Korean websites based in China advertise a variety of investment opportunities, mainly in the areas of energy, restaurants and hotels, agriculture, mining, manufacturing and general infrastructure. To attract investment by Chinese businessmen, North Koreans publicize the country’s cheap land and labor.

Bilateral trade between North Korea and China has increased 7.58% over last year, and has grown to $1.7 billion in 2006. Trade has increased to $1.25 billion in the first eight months of 2007, growing another 16.7%. China's major exports to North Korea are agricultural products, consumer electronics such as televisions, washing machines, refrigerators and air conditioners, and textiles and fuel. North Koreans have avoided Chinese products in the past. To get around this resistance, Chinese suppliers now use brand names, have English descriptions on the packaging, and position small “Made in China” markings in inconspicuous places.

China’s central government and provincial governments are conscious of the increasing bilateral commercial relationship with North Korea and have attempted to encourage such bilateral cooperation. Between 2002 and 2005, China and North Korea have signed five bilateral economic cooperation agreements. In January 2006, Chinese Premier Wen Jiabao introduced new economic-cooperation guidelines during a visit with North Korean leader Kim Jong-il. Chinese provincial governments facilitate trade with North Korea by supporting trade shows and building new trade zones.

Discussion Questions:
Will China be able to parlay its economic relationship with North Korea into political control over North Korea specifically related to nuclear weapons?

Capitalism appears to be thriving in North Korea. Will this continue?