North Korean Coal Exports to China Exceed Pre-Sanction Levels

| by Zach Cohen
North Korean dictator Kim Jong-UnNorth Korean dictator Kim Jong-Un

Chinese coal imports from North Korea have steadily increased since April, when UN sanctions aimed at cutting off funding for Kim Jung Un's nuclear program went into effect. China approved the sanctions in March, agreeing to ban imports of rare earth materials, including coal. China initially supported the sanctions, reducing imports from 2.3 million tons in March to 1.5 million in April. By August, however, imports had risen to almost 2.5 million tons.

China is justifying their backpedaling under exemptions included in the sanctions, Reuters reports. The exemptions allow trade with North Korea when “the people’s well being” requires it. 

According to Reuters, North Korea provided 86.3 percent of China’s coal imports in the first 8 months of 2016. At $45.55 per ton of coal, North Korea is a far more attractive trading partner than China’s second largest coal supplier, Russia, whose coal costs $70.25 per ton. 

China has relied more heavily on imports of coal in recent months, following a successful effort to curb domestic coal production. In February, China President Xi Jinping aimed to cut 500 million metric tons of coal output over the next three years, according to Bloomberg. The choice came as a result of reduced domestic demand, which in February dropped to the lowest levels in four years. According to Reuters, the increase in coal imports from North Korea may indicate that China has been too successful at curbing domestic coal production. 

China is North Korea’s largest trading partner, and is the source of nearly all of their oil and food, reports The New York Times. Shi Yinhong, professor of international relations at a Beijing university, told The Times that China is trying to stay on North Korea’s good side, and would rather control it by providing a steady supply of oil. If China opted for sanctions instead, it risks angering the fledgling nuclear state, which conducted its largest ever nuclear test in early September, less than 50 miles from their Chinese border.

Additionally, a successful sanctions regime would likely lead to economic collapse and chaos in North Korea, resulting in a massive influx of refugees across the northern border into China, a situation that policymakers in Beijing hardly wish to invite upon themselves. 

Sources: Reuters, Bloomberg, The New York Times / Photo credit: The Guardian via The Gate​

Should China cut its coal output so drastically?
Yes - 0%
Yes - 0%