introduction
North Korea, a mysterious and closed military fortress in East Asia, is poorly known even to China, its closest neighbor.
In terms of international trade, unlike Japan and South Korea, which export electrical appliances, and the Philippines, which is rich in bananas, North Korea exports a variety of goods that are difficult to see in the market and almost unheard of.
However, North Korea also has an export trade. The 2022 North Korean Foreign Trade Trends Report released by the Korea Trade-Investment Promotion Agency.
We can know that North Korean goods are mainly exported to China, and the share of North Korea's trade with China accounts for 96.7% of its total exports. The second is exports to Vietnam, accounting for 1%, and the rest is negligible.
Moreover, the total price of these export commodities is only 2 billion yuan.
This figure is not even a fraction of that of other countries of the same size. So, what are the more than 2 billion goods exported by North Korea to China?
In other words, what commodities can North Korea use to open up China's import trade market?
North Korea's exports include very few food products
First of all, for a country like North Korea with backward light industry and lack of core technology. Food may be a stepping stone to the Chinese market.
It is said that the people live on food. China just overtook the United States last year to become the world's largest food importer. After all, there are 1.4 billion people to feed, so food imports are never too much.
However, according to the General Administration of Customs, food products have accounted for only a small part of North Korea's exports to China in recent years.
In addition, it mainly focuses on specialty ingredients, such as ginseng and seafood, and grains such as rice are exported relatively rarely.
This is mainly related to North Korea's tight food problem. North Korea is a typical highland country, with hills and mountains covering 80% of the country's land area, and only 18% of the country's land can be cultivated.
This means that North Korea will not be able to achieve food self-sufficiency even if the weather is good.
Coupled with factors such as high latitude and insufficient hydrothermal conditions, it takes more than 100 days for North Korea's rice to mature, and its lack of grain self-sufficiency has almost become a flaw in the country.
According to a report released by the Food and Agriculture Organization of the United Nations, North Korea is currently one of the countries in Asia that receives the most relief food.
During the pandemic, more than 40 percent of North Koreans were malnourished, and one in five North Korean children suffered from developmental disabilities.
According to other sources, until 2023, the North Korean people are still struggling with hunger. In short, North Korea itself is almost out of the pot, how can it still export grain to other countries?
It is precisely for this reason that the DPRK will export some special ingredients with high added value, but not enough to eat, in exchange for food for the people to satisfy their hunger. Among them, the most handy are seafood and Korean ginseng.
Although it is difficult for North Korea to farm, it is fortunate that it is a coastal country and can still "rely on the sea to eat the sea".
North Korea is very rich in fishery resources, and the most prominent word "fresh" is the seafood salvaged from nearby waters. It is rich in squid, shellfish, crab, shrimp, sea cucumber, sea urchin and other precious seafood.
In particular, the shellfish here is favored by Chinese consumers because of the low temperature of the sea water at high latitudes, the slow growth cycle of all things, the meat is fine and firm, and the nutritional value is also higher.
Needless to say, although this brand has been monopolized by South Korea in recent years, it is a well-known fact that authentic Korean ginseng is produced in Kaesong, North Korea.
In other places, even if Kaesong seeds are used, it is difficult to produce the same quality of Korean ginseng.
In addition, the cultivation, processing, and export of Korean ginseng are strictly controlled by the government. It is produced in pure natural mountain land without major industrial and heavy metal pollution.
North Korea – Geological Museum of East Asia
In addition to food, another commodity that North Korea can get hold of is mineral resources. North Korea is known as the "Geological Museum of East Asia".
The country's hilly and mountainous terrain is rich in coal, iron and copper. The abundance of resources per unit area is comparable to that of Mongolia.
In the 80s of the last century, with the help of the Soviet Union, the DPRK conducted a thorough investigation of the country's mineral resources. In the end, it was astonished to find that more than 80% of the mineral resources of the entire peninsula were concentrated on the North Korean side.
There are more than 400 categories, and there are more than 80 kinds of commercial development value. Among them, the reserves of magnesite and graphite ore can rank among the top three in the world.
In contrast, although China also has rich mineral resources, it cannot withstand the fact that it has too many people, too much demand, and insufficient possession. More importantly, some mineral resources still have shortcomings of low grade.
North Korea, which is just across the river from the mainland, has several high-grade mineral deposits.
For example, the country's largest iron ore mine, the Maoshan Iron Mine, has about 2.8 billion tons of iron ore buried, with an annual output of more than 8 million tons, and has good development prospects.
The mining and processing of these resources has generated considerable foreign exchange earnings for North Korea. In particular, coal and tungsten wood ore are popular in the Chinese market due to their high quality and moderate price.
In terms of raw ore. Until 2017, mineral resources were North Korea's main export to China.
Mineral resources account for more than 50 percent of North Korea's exports to China, and even approached 70 percent at one point.
Among the mineral resources, coal is the main product, accounting for about 40% of the total exports to China.
This is followed by iron ore, followed by alloy pig iron. In addition, zinc, magnesium oxide, copper, etc. have also entered the top 10 of the export list.
Processing. Due to the relatively backward mineral processing and refining technology of the DPRK, it can only export some primary processing products to China, such as crude steel, silicon carbide, glass plates, etc.
However, since 2017, the share of minerals and processed products in North Korea's total exports has been gradually decreasing.
The reason for this was the escalation of tensions on the peninsula in 2016 when North Korea tested nuclear weapons.
In order to implement the relevant United Nations resolutions, China has imposed an embargo on some of the DPRK's exports to China, of which coal and other mineral resources are the most banned.
However, considering that the DPRK is a country that has suffered from Western blockade sanctions. Therefore, China has always maintained that sanctions against the DPRK should not be at the expense of harming the people's livelihood and humanitarian needs of the DPRK.
Therefore, China encourages some industries that are beneficial to the livelihood of the DPRK to be exported to the mainland. In this context, mineral resources are gradually being replaced by another commodity.
What is North Korea's most exported commodity?
If you say, the first few products are still expected.
So, the next product, and the reason why it entered the Chinese market, I'm afraid it's hard for ordinary people to guess. That is the hottest top stream of North Korea's exports to China today - hair products.
According to statistics released by the General Administration of Customs this year, in 2023, the total price of North Korean hair products exported to China will reach 1.177 billion yuan.
Accounting for 57% of North Korea's total exports to China in 2023, it has surpassed minerals to become the main commodity for North Korea's export earnings.
The so-called hair products actually refer to wigs, false eyelashes, fake beards, and other ornaments made of human hair.
Compared with the "hard currency" such as grain and minerals mentioned earlier, the existence of hair products is indeed a bit abrupt.
First, the production and processing of hair products is a labor-intensive industry, and it is not yet possible to achieve all-round mechanized production.
Although low-end wigs can be produced by machines to a certain extent, the problem is that the wigs produced in this way are not as high-quality as high-end wigs that are crocheted with a needle and a thread.
The production and processing of wigs is a delicate work, in addition to complicated processes and styles.
When wigs crochet their hair onto an artificial scalp, they also need to be accurate to millimeters, which requires a very high level of craftsmanship, which is not possible with ordinary machines.
Because the production of wigs is time-consuming and laborious, the corresponding labor costs have also been high.
In China, it is reported that the labor cost of making a high-end wig is close to 1,000 yuan, while in North Korea, it only costs 300 yuan.
In addition, due to China's hair products industry base, it is mainly concentrated in Xuchang, Henan, Qingdao, Shandong, Taihe, Anhui and other northern provinces and cities.
In particular, Qingdao, Shandong Province, is very close to the Korean Peninsula. Therefore, for the sake of cost control, North Korea, with its low labor price, has become an excellent OEM choice for domestic hair product manufacturers.
China exports hair raw materials to the DPRK, which is processed with supplied materials and then exported to China for packaging and sales. Through this cross-border cooperation, North Korea has accumulated the core technology of hair processing technology.
For example, some hair products merchants label their false eyelash products as "North Korean hand-strangled." It shows that this is a processing process that is hand-polished one by one, so it is more expensive.
epilogue
What is certain is that with the change of the main export commodities in recent years, North Korea's environmental pollution has been reduced, jobs have been increased, and people's livelihood problems have been improved.
Although the volume of North Korea's exports to China is relatively small, the commodity structure of its exports to China is characterized by diversification.
This not only reflects the DPRK's ability in resource development and processing, but also demonstrates the breadth and depth of economic and trade cooperation between China and the DPRK.
However, we should also note that the DPRK's foreign trade still faces many challenges and difficulties.
On the one hand, the international community's economic sanctions and diplomatic isolation on the DPRK have restricted the development of its foreign trade; on the other hand, the DPRK's own economic structure and industrial structure also need to be further adjusted and optimized.
In the future, with the continuous development and deepening of China-DPRK relations, we look forward to seeing more fruitful results in the economic and trade fields between China and the DPRK.
Resources:
1. Han Zenglin.Characteristics of North Korea's foreign trade under the influence of United Nations sanctions[J]Economic Geography, 2019.04
2. Zhang Baoren, Analysis of the Current Situation and Development Trend of Recent Sino-DPRK Economic and Trade Cooperation[J], Northeast Asia Forum, No.05, 2005