China trade: North Korea's food crisis could push Pyongyang to resume cross-border flow in coming months

April 2, 2023 at 5:30 AM·7 min read

Needing rice, grain, flour, sugar and cooking oil to cope with a worsening food crisis, North Korea may fully restore cross-border trade with China as early as the middle of the year, analysts said, with the hermit kingdom yet to follow its neighbour in relaxing its coronavirus restrictions.

North Korea's borders with China and Russia have largely been closed for three years, putting a strain on the economy and creating food shortages.

A cross-border trade rail link with China resumed in January last year, but cargo trucks have been unable to cross between the border cities of Dandong and Sinuiju, a route which would normally account for 70 per cent of bilateral trade.

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Bilateral trade did rise by 142.8 per cent year on year to US$327.4 million in combined figures for January and February, according to China's General Administration of Customs, having been slashed due to virus curbs on either side of the border.

"Last year, North Korea harvested 4.5 million tonnes of rice when the amount of rice consumption per year is estimated to be 5.8 million tonnes. So they have a shortage of about 1.3 million tonnes," said Kwon Tae-jin, a senior economist at the GS&J Institute and an expert on the North Korean agriculture industry.

"North Korea needs to fill this gap with international aid or trade with China ... but the current trend shows that it would be difficult [to resolve the shortage]."

In late February, North Korea's ruling Workers' Party held a rare high-level meeting to discuss agricultural development issues, according to the state-owned Korean Central News Agency.

During the meeting, North Korean leader Kim Jong-un urged government officials to engineer a "fundamental transformation" in agricultural production. He also said hitting grain production targets this year was a priority and emphasised the importance of stable agriculture production.

South Korea's Yonhap News Agency also reported that Pyongyang had distributed military rice to the private sector and ordered each North Korean labourer in China to send 1,000 yuan (US$145) back to North Korea.

It is seen as quite rare for North Korea to distribute the rice reserved for its military, adding to the fears over a shortage of food, while the cash is seen as a move to make up for a shortage of foreign currency caused by the virus curbs.

Park Won-gon, a professor of North Korean studies at Ewha Womans University, said Pyongyang's rare meeting to discuss the food and agriculture issues pointed to a severe food shortage.

"The only way to resolve the food shortage is to open up its market," said Park.

"Even if they say self-reliance, there are limits to the farmland they can cultivate, and their agricultural structure is insufficient to fulfil the people's demands."

According to the South Korean Ministry of Unification last month, while the current situation is not considered to be at the level of the Arduous March - a famine in the mid-1990s caused by economic mismanagement, the loss of support from the then Soviet Union and a series of floods and droughts that resulted in up to 3 million estimated deaths - the food crisis has led to "deaths from starvation occurring one after another in some areas of North Korea".

In April 2021, North Korean leader Kim told citizens to prepare for hard times ahead and called on officials to "wage another, more difficult 'Arduous March' in order to relieve our people of the difficulty, even a little".

A month earlier, a United Nations report on human rights in North Korea had warned that prolonged virus prevention measures had resulted "in a drastic decline in trade and commercial activities and severe economic hardship to the general population, causing increased food insecurity.".

It pointed to concerns that restrictions on trade with China, limited market activities, lack of humanitarian support to affected populations, ongoing implementation of sanctions and damage to agriculture caused by typhoons and floods in August and September 2020 could lead to a serious food crisis.

"Covid-19 is still a variable, so it would not be easy to fully open the border right away," said Jun Byoung-gon, a senior research fellow at Korea Institute of National Unification.

"But since China ended its zero-Covid policy and to receive necessary economic assistance against the food shortage ... full restoration of trade with China as early as May or June is possible depending on the Covid-19 situation."

North Korea is also under strict international sanctions over its nuclear weapons and ballistic missile programmes.

In February, North Korea imported around US$6.6 million worth long-grain rice and US$5 million worth of soybean oil from China. Long-grain rice is not commonly eaten in North Korea, but analysts said this added to evidence of a food shortage as it is cheaper than short-grain rice.

"They will try to bear the food crisis as much as they can and only import products that they urgently need from China," said Lim Eul-chul, a professor at Kyungnam University's Institute for Far Eastern Studies in Seoul.

"But the coming May and June is the 'spring poverty' period in North Korea right before the harvest, where the food supplies are the toughest during this period.

"There is a possibility that they will simultaneously restore trade with China when the death from starvation increases in this period."

Lee Sang-sook, a research professor at the Institute of Foreign Affairs and National Security in Seoul, said the food shortage is accelerating the need for Pyongyang to restore trade as this year's situation is more severe than before.

"Most countries implemented the 'living with Covid' policy, and North Korea was also preparing for it last year, such as an effort into disinfection facilities for the goods from China," said Lee.

"Interaction with China itself can relieve North Korea's food crisis. Not only grains, but North Korea also needs products like flour, sugar, and cooking oil, which needs to be sourced from trade with China."

Lee added that the US-China rivalry could push Beijing to increase the "solidarity of socialist states" against Washington and its Asian allies, leading it to increase its food aid to North Korea.

Jun also pointed to North Korea's recent missile activity, which have totalled more than 20 across 11 launches this year, saying that they aim to raise domestic solidarity amid increasing discontent over the food shortage, while also hoping to receive more aid from China by increasing the tensions between Washington and Beijing.

"North Korea hopes to strengthen the unity and cooperation between Pyongyang, Beijing, and Moscow. Especially [if it wants] China's diplomatic and economic support," said Jun.

"Even for Beijing, having Pyongyang on its side is strategically helpful. If North Korea acts uncontrollably, it would also be a difficult situation for them, as it can strengthen the cooperation between Seoul, Tokyo, and Washington and China would want North Korea to be stable."

China's influence over North Korea's food shortages, though, could be limited as Pyongyang may not want to increase its dependency on Beijing and instead pursue an independent route, said Lim.

"I think North Korea will stay away from excessive reliance on China," he said.

"China will also know that increasing aid to North Korea will not push Pyongyang to align with its political intention because that is what North Korea is most aware of."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.