China says trade with North Korea normal

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BEIJING, Feb. 19 (UPI) -- Chinese trade with North Korea hasn't been affected by the North's recent nuclear test, observers told the China Daily.

However, the official newspaper Tuesday quoted other Chinese observers that the Feb. 12 nuclear test, North Korea's third since 2006, could adversely affect its two economic zones.

North Korea is under tight U.N. economic sanctions and its latest test was widely condemned by the international community, including China.

China, North Korea's only major ally, is its largest trading partner. Official Chinese data show bilateral trade, which totaled nearly $6 billion in 2011, has been increasing annually since 2000. China's investment in North Korea's non-financial sectors reached $300 million at the end of 2011, while the North's total investment in China was $100 million in various industries, including catering.

China's main imports from North Korea are coal, ores, woven apparel, fish and seafood, while its exports include electrical machinery, vehicles and iron and steel. China is also a major supplier of petroleum to North Korea.

Qian Yingchun, general manager of Tongyi Co., a trading company at the border city of Dandong in China's Liaoning province, told China Daily trade with North Korea has been "operating as usual" since the test. His company has been exporting Chinese construction materials, metals, general merchandise and furniture to the North for 15 years.

China Daily said cross-border trade in Dandong accounts for more than 80 percent of the countries' trade.

The report said in 2010, China and North Korea set up the Rason Economic and Trade Zone in the North Korean port of Rason near China's Jilin province, and the Hwanggumphyong and Wihwa Islands Economic Zone near Dandong for bilateral trade and investment cooperation.

Sang Baichuan, at the University of International Business and Economics in Beijing, told China Daily the nuclear test has led to suspension of expansion of the two economic zones.

Wang Yuzhu at the National Institute of International Strategy at the Chinese Academy of Social Sciences said the nuclear test could adversely affect North Korea's economy.

"Unilateral sanctions (by China), if introduced, will hit (North Korea) very hard, as the country is less developed in agriculture and industrialization," he said.

But Dong Manyuan at the China Institute of International Studies dismissed the chance of unilateral sanctions from China since Beijing opposes such measures.