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N Korea at crossroads

China and North Korea to revive trade in April amid US tension

New bridge between two set to open as Beijing seen giving Pyongyang helping hand

The Sino-Korean Friendship Bridge, taken from the Chinese side, is the main trade route between the two countries. (Photo by Shin Watanabe)

DANDONG/BEIJING -- China and North Korea are preparing to resume trade April, according to multiple sources, which had been suspended due to the coronavirus pandemic and as a new bridge linking the two countries is set to open.

The two neighbors are strengthening ties at a time when the relationship between Beijing and Washington is deteriorating.

"I heard that North Korea is planning to accept Chinese goods from April," a Chinese man in his 30s at a trading company in Dandong, a city across the Yalu River from North Korea, told Nikkei. He said the information came from the North Korean side and he was preparing to restart his business.

A number of other trading companies also confirmed that bilateral trade is expected to resume in April.

At first, goods will only travel between Dandong and Sinuiju in North Korea, by rail over the Sino-Korean Friendship Bridge, which is the main route of trade between the two countries.

In Sinuiju, COVID-19 testing sites are being prepared. All being well, transport by ship and trucks will also be resumed.

North Korea needs medicines to treat diabetes, infections and other diseases, said a person familiar with the matter. "Bilateral trade" is in fact Chinese aid to North Korea, the source said. Sources also say that North Korea is asking for chemical fertilizers as the spring seeding season approaches.

In late January 2020, North Korea suspended flight and rail services from China and Russia to prevent coronavirus contagion. Overseas visitors were banned and goods restricted.

Pyongyang partially eased transport restrictions in May last year but reimposed them in October due to another wave of infections in China. Trade by road, rail and sea have almost entirely been suspended.

Meanwhile, a new bridge over the Yalu River is about to open. On March 9, the provincial government of Liaoning in China announced invitations for the tender of safety inspections for the New Yalu River Bridge, saying in those documents that the crossing would soon be open.

The bridge is downstream from the existing Sino-Korean Friendship Bridge and could become a new main route for trade. Based on an agreement signed by China and North Korea in 2009, the bridge itself was completed in 2014 but had yet to be opened for use because of delayed road construction on the North Korean side.

China accounts for more than 90% of North Korea's external trade. Exports and imports between the two tumbled 80.7% in 2020 to $539.05 million from a year ago, reaching the lowest level since 2000 when bilateral trade dropped to $488 million, according to China's General Administration of Customers.

In 2017, the U.N. Security Council imposed sanctions on North Korea's exports of coal, iron ore, seafood, textile and other products. But the country's ties with China help it to still trade. Until 2019, North Korea manufactured and exported wigs, watches, and other products using materials supplied by China which were not subject to the sanctions.

"These kinds of trade halted due to the border closure," a trading house official said. As its hard-currency income falls, North Korea is increasingly relying on China's support.

Sino-North Korean cooperation is reviving as U.S.-China relations worsen. The friction between Washington and Beijing over security issues and human rights was laid clear at a recent meeting in Alaska earlier this month.

South Korea's central bank estimated that North Korea's gross domestic product increased 0.4% in 2019 from the previous year. But the North Korean economy is likely to have contracted last year. While trade is now expected to resume, it is unclear when both sides will agree to the flow of people.

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