Sharp Increase in China’s Shipments to North Korea Amid Restarted Flights

Summary

  • In November, the shipments by China to North Korea significantly increased by 18.3% from the previous month, exhibiting the highest progression since April, according to China’s General Administration of Customs.
  • Year-on-year growth for November jumped to 94.3% relative to 40.9% observed in October.
  • Key exports include processed hair and wool (for wigs), granulated sugar, and soybean oil.
  • China’s export value escalated to $1.78 billion marking a 147% surge compared to the same period in the preceding year.
  • Air Koryo has reintroduced flights between Pyongyang and Beijing, constituting part of North Korea’s post-pandemic opening.
  • Beijing has expressed its interest to enhance communication, coordination, mutual exchanges, and cooperation with North Korea.
  • North Korea remains China’s sole ally. In the face of possible foreign aggression, both countries are committed to mutual protection and support bound by a treaty of 1961.
  • Recently, North Korea reportedly fired a ballistic missile that could potentially reach any part of the United States.

Increase in Chinese Exports to North Korea

China experienced a noticeable increase in its shipments to North Korea in November, registering a considerable growth of 18.3% compared to October. This surge is the most drastic seen since April, clarified by the data published by China’s General Administration of Customs. Meanwhile, there was a drop of 11.2% in shipments from September to October.

Significant YoY Growth

In regards to the same month the preceding year, the data exhibits a 94.3% soar in Chinese shipments to North Korea in November. This rise accelerates from the 40.9% growth in the year-on-year data of October.

Major Components of Exports

The crucial Chinese exports to North Korea included processed hair and wool utilized for wigs, granulated sugar, and soybean oil.

Staggering Rise in Export Value

The export value of China to North Korea during the initial 11 months of the current year climbed to $1.78 billion, marking a whopping 147% increase relative to the corresponding period in the previous year.

Post-Pandemic Opening of North Korea

Progressing slowly towards opening after the pandemic, North Korea has started allowing Chinese government delegations to visit. It has also restarted flights from Pyongyang to Beijing. The flights by North Korea’s Air Koryo from Pyongyang to the northeastern Chinese city of Shenyang were resumed after nearly four years on December 13, as reported by the South Korean news agency, Yonhap.

Sino-Korean Talks

During a recent meeting with North Korean Vice Minister of Foreign Affairs Pak Myong Ho in Beijing, Chinese Foreign Minister Wang Yi conveyed China’s willingness to fortify the bilateral communication and coordination by intensifying exchanges and cooperation.

Solidified Alliance of China and North Korea

North Korea is renowned to be China’s only ally. Constrained by a treaty transpired in 1961, both nations are obliged to providing military assistance to each other should a third party attempt an attack.

However, North Korea tested an intercontinental ballistic missile that could potentially strike any location in the United States, stated South Korea and Japan.

The persisting developments in the Sino-Korean relations, multifold growth of Chinese exports to North Korea, along with the latter’s missile testing capabilities, may induce significant volatility in the forex market and impact assets related to these nations.

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