Exploring the Intensive and Extensive Margins of the Recent China-North Korea Trade

This paper examined and analyzed recent trends of the China-North Korea trade using intensive and extensive margins. North Korea’s trade with China, especially its increasing dependence on China, was analyzed as being determined mostly by quantity and price of small number of items rather than the diversification of products. In addition, North Korea’s export items that are closely related to quantity and price effects are mostly underground resources. Therefore, they are highly vulnerable to external factors, such as commodity market volatility. In particular, the fact that China-North Korea trade is confined to a small number of items makes attempts by North Korea to pursue growth through trade with China very difficult.

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