Just How Big Are Those Lips and Teeth?

The conventional wisdom among North Korea-watchers is that China accounts for 70 percent or more of North Korean trade, and by extension, has considerable influence over North Korea. Victor Cha, our friend at CSIS, recently took this line. And not to pick on Victor, a reputable scholar and thoroughly likeable fellow, he is in good company: among other places, the statement has also appeared in New York Times as well as both Washington Post reporting [1] [2] and editorials. (We’d hyperlink the editorials but the Post puts them behind a firewall and we wouldn’t want you to pay for misinformation.) See, the claim just ain’t true.

The canard’s origin is in the odd way that the official (South) Korea Trade-Investment Promotion Agency (KOTRA) reports data on North Korean trade.  KOTRA excludes trade with South Korea, the North’s second largest trade partner after China, from North Korean international trade figures, treating these cross-border exchanges as “domestic.” (Funny, I’ve never noticed a minefield separating Maryland and Virginia or encountered heavily armed guards manning the Texas-Oklahoma border.) Then, to compound matters, KOTRA seems to have stopped following some of North Korea’s trade with Middle Eastern countries. The explanation could be budget cuts; there is also speculation that it is politics—dovish South Korean governments were reluctant to report North Korean involvement with dodgy Middle East regimes; or it could be general disinterest.  Whatever the reason, the breadth of KOTRA’s coverage of North Korean trade in the Middle East has dropped considerably, further exaggerating China’s prominence.

The upshot is that there is a huge divergence between the figures produced by KOTRA and those derived from UN and IMF data.  KOTRA used to do a good job of cleaning up obvious misreporting issues (partner country reporting agencies continually get North and South Korea confused--seriously) and with illicit activities, misreported military trade and whatnot, there is some irreducible uncertainty surrounding North Korean trade and I would not assert that the figures above and the final word.  But from a geopolitical standpoint --the perspective of Cha, the Times, and the Post--there is a very big difference between 30 percent and 80 percent. One only hopes that the US government has a better grasp of the facts.