Cut in China's energy supply could 'paralyze' North Korea, analyst says

Oil pipelines run between North Korea and China, through the Chinese border city of Dandong.
By Elizabeth Shim  |  Jan. 11, 2016 at 2:31 PM
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SEOUL, Jan. 11 (UPI) -- China plays a key role as North Korea's energy supplier, and the entire country could be thrown into chaos within a week if Beijing decides to cut supply, a South Korean think tank said Monday.

The analysis from Korea Energy Economics Institute comes at a time Beijing is being rebuked by the United States for not doing enough to prevent North Korea provocations.

Pyongyang announced Wednesday it had "successfully" tested a hydrogen bomb.

Kim Kyung-sul, a senior research fellow at KEEI, told Yonhap that North Korea relies 100 percent on China for crude oil imports. That means the fate of North Korea's economy depends heavily on Chinese actions.

Oil pipelines run between North Korea and China, through the Chinese border city of Dandong. But if China decides to block the flow, North Korea would lose its supply of petroleum products that include gasoline and diesel.

If China suspends supply, Kim said North Korea's transportation and military sectors would become "paralyzed" and rampant inflation followed by internal riots would take place.

The factors leading to a North Korea collapse would fall into place, Kim said.

The South Korean analyst said that while North Korea keeps a certain amount of crude oil in reserve for its military, the amount would not be sufficient to prevent social chaos that would ensue with a cut in energy supply.

North Korea reportedly imported 4.237 million barrels of oil from China in 2013 and 3.885 million barrels in 2014.

A North Korea collapse, however, would not be desirable from a South Korean perspective.

South Korean newspaper Donga Ilbo reported that Moody's, the international credit-rating agency, had stated a North Korea collapse would have an adverse effect on South Korea's credit rating, most recently upgraded to Aa2 in December.

Geopolitical risks are high for South Korea, Moody's stated Monday.

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