A Study on Cross-border Trade between North Korea and China: Current Status and ProspectsNorth Korea has remarkably increased economic dependence on China particularly the amount of the foreign trade in 2000s because Soviet Union was broken down and W...
A Study on Cross-border Trade between North Korea and China: Current Status and ProspectsNorth Korea has remarkably increased economic dependence on China particularly the amount of the foreign trade in 2000s because Soviet Union was broken down and Western countries have imposed economic sanctions on North Korea. It means that North Korea has become much closer with China in the area of economic relationship. Cross-border trade with China is the most important part of the North Korean trade. The Chinese government granted the special border area for its cross-border trade needs. China exempts 50 percent of the import tariff and the value-added tax to promote economic development in the economically lagging borderline area. The cross-border trade’s volume between North Korea and China reached 441 million dollars in 2005, and this amount become 27.9 percent of total trade volume. Cross-border trade between North Korea and China mostly takes the form of the small-scale border trade. North Korea’s export dependency on border trade with China is sharply increasing. This reflects that North Korea does not have competitive export items and prefers the tax-favored cross-border trade. In North Korea, there are about ten national trade areas for cross-border trade. Among these areas, Dandong-Shinyiju is the most active border trade area.