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N Korea at crossroads

Key North Korea factory shuts down from COVID-19 parts shortage

Border closing with China deals heavy economic blow to Pyongyang

The China-North Korea Friendship Bridge is a vital trade link. North Korea closed the border in January 2020 as coronavirus cases rose in China.   © Kyodo

SEOUL -- One of North Korea's largest fertilizer plants has halted operations due to a lack of replacement parts, a trade group based in South Korea says, the latest sign of damage to the rogue state's economy from its border closure with China.

The Namhung Youth Chemical Complex, north of Pyongyang, produces fertilizer and coal gas using anthracite mined in the area. North Korean leader Kim Jong Un visited the site in 2013.

High-pressure valves and jet sprays at the complex have become too worn for continued use, according to reports the Korea International Trade Association received from North Korea in January. Without replacement parts, it is unclear when the plant can resume work.

The suspension hinders North Korea's push to lift its meager agricultural output. Kim last year ordered a boost in fertilizer production and attended a completion ceremony for a separate fertilizer plant. Coal gas also serves as a valuable industrial energy source for the country, which faces an oil embargo in response to its nuclear and missile testing.

North Korea closed its border with main trading partner China in January 2020 as coronavirus cases started to rise in the neighboring country. Bilateral trade recovered in the summer, but has slumped since October ahead of the 75th anniversary of the founding of the Workers' Party of Korea, as well as a party congress earlier this year.

Total trade between China and North Korea dropped roughly 80% in 2020 to $540 million, according to China's customs agency.

The resulting shortages also have struck North Korea's jangmadang informal markets, which have flourished under Kim's tenure. At one market in the city of Pyongsong, the volume of available flour and cooking oil has halved. Many stalls that used to sell Chinese-made apparel and appliances have shut down as well.

The slowdown of the jangmadang is eating into the coffers of North Korea's regional authorities. South Pyongan Province, home of the Namhung plant, made about half as much from overseeing these markets in the last quarter of 2020 as in the year-ago period, heavily impacting provincial spending, the KITA report says.

The pandemic's impact, combined with sanctions and severe floods in key farm regions, has dealt a heavy blow to the North Korean economy as a whole.

Kim during the Workers' Party congress in January acknowledged that North Korea had fallen behind on its economic goals, and he announced a new five-year plan focused on greater self-reliance. The country is using its mineral resources, which it is banned from exporting under United Nations sanctions, to boost domestic energy and materials production.

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