The news of North Korea’s missile launches has triggered speculation about stability in the region and what the leader Kim Jong Un’s intentions are. North Korea has been testing its weapons in recent weeks and at the end of January it fired several cruise missiles off the east coast. The actions were accompanied by an increasingly aggressive tone from Kim, who was reported by state media as saying the country was preparing for war. Also in January, Kim ordered the Arch of Reunification – a symbol of warmer relations between North and South Korea – to be destroyed, in another sign it regards the South as an enemy, not a country to be reunited with.
This pattern is not unusual for North Korea and its nuclear weapons programme – and bellicose rhetoric – led to harsh sanctions being imposed by the United Nations – and other countries on a unilateral basis – nearly two decades ago.
The country, however, is not the hermit kingdom it is often portrayed to be, and recent reports point to how North Korea has been forging trading relations – particularly with China and Russia – in a boost to its post-Covid economy.
After a Covid lockdown, North Korea reopened its borders in 2023 and in early February welcomed the first group of tourists since the pandemic. Over the years, North Korea has gone through phases of opening up to visitors, and what was noticeable this time was that this group of 100 people was from Russia – and not China, North Korea’s closest trading partner.
In US security circles, there is reportedly concern about North Korea’s closer relationship with Russia, according to CNN. This is viewed as a shift in strategic direction by North Korea to move away from its reliance on China. Reuters also reported that a special economic zone in Rason, which was first opened in the 1990s, could be reopened to serve a burgeoning trading relationship with Russia.
There have also been news reports that Russia has been using weapons in Ukraine that have been supplied by North Korea. And despite the sanctions on North Korea, there are no signs it is giving up on the development of its weapons programme. In fact, North Korea has found ways to circumvent sanctions and a number of countries have been assessing the country’s trade potential. For example, in 2019, North Korea hosted an international trade fair and 450 companies attended – according to state media – from countries including China, Russia, Pakistan and Poland. Reuters reported some companies were attending to prepare for a potential lifting of sanctions.
North Korea has also seen a recent jump in trade, a boost since the pandemic that has been driven by the sale of hair products such as wigs, false beards and eyelashes. These products reportedly account for 57% of North Korea’s exports to China and North Korea is a major supplier of these products for China. The eyelashes, for example, are typically sold to China in an unfinished state, and then production is completed in China where the lashes are repackaged and then sold on with a ‘Made in China’ label, according to a Reuters investigation. There is debate about whether this is actually a violation of sanctions as some experts argue the trade of hair products is permitted. Also, the country of origin that needs to be declared on products is where the product gained its ‘essential characteristics’ – some argue that happened in China, while others say it is in North Korea. Either way, North Korea has benefitted from the trade of these products and in the last year it is estimated the trade of these products has doubled. In 2023, the exports were valued at US$167m up from a pre-Covid US$31m in 2019, according to Reuters.
There is an assumption among observers, however, that the profits made in North Korea from such trade goes directly to the state and the regime of Kim JongUn, which is likely funding the country’s weapons programme – which adds to fears for stability in the region.
