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Economy

North Korea's trade with China plunges 81% as lockdown bites

Analysts say isolated nation's economy may have shrunk up to 10% last year

People walk by a TV screen showing North Korean leader Kim Jong Un during a ruling party congress, at the Seoul Railway Station in Seoul, South Korea, on Jan. 6.   © AP

SEOUL (Reuters) -- North Korea's trade with China plunged more than 80% last year, Chinese customs data has shown, as the isolated country's strict coronavirus lockdown encumbers an economy already burdened by international sanctions.

China is North Korea's top ally and accounts for some 90% of its trade volumes. Two-way trade plummeted nearly 80.7% to $539 million last year from 2019, Chinese customs data released on Monday showed.

North Korea's exports to China totalled $48 million, down about 77.7%, while its imports fell 80.9% to $491 million.

No reason for the lower trade was given but the new data underscored the extent that North Korea has become isolated since it sealed its border last January to ward off the novel coronavirus that had been detected in neighbouring China just a few weeks earlier.

North Korea has not confirmed any cases of COVID-19 but all points of entry have been closed, public transport and inter-state movement rigidly restricted and gatherings of more than five people banned, the World Health Organization (WHO) said recently.

"Continuous surveillance is ongoing, samples are being tested for COVID-19 in 15 laboratories including 13 subnational laboratories," the WHO said in a report.

North Korea's state-controlled economy has long been weighed down by sanctions, imposed to press it to give up its nuclear ambitions. The coronavirus lockdown is compounding the squeeze.

North Korean economic data is sparse but its economy may have shrunk by 8.5% last year, Fitch Solutions said, while the Seoul-based Hana Institute of Finance estimated a contraction of up to 10%.

North Korea replaced most of its cabinet policymakers in a recent reshuffle, including its public health minister, blaming them for "failing to respond actively" to the pandemic and "incurring considerable disruption in implementing state budgets."

North Korean leader Kim Jong Un has said his five-year economic plan unveiled in 2016 had failed "tremendously" in almost every sector, though he praised workers for maintaining "stable situations" despite the coronavirus.

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