North Korea trade with China shrinks 15 percent

SEOUL, May 23 (UPI) -- North Korea's trade with China shrank for the first time in six years, according to a South Korean government think tank.

According to a report from the Korea Institute for International Economic Policy, bilateral trade stood at $5.43 billion in 2015, down by 14.7 percent from 2014.

North Korea exports to China were estimated to total $2.95 billion, a decrease of 16.4 percent, and imports, excluding crude oil, were reported at $2.49 billion, a 12.6 percent decrease from 2014, local newspaper Kyunghyang Shinmun reported.

Pyongyang has been hit hard by sanctions after it conducted a fourth nuclear test in January and launched a long-range rocket in February. It's likely the South Korean suspension of operations at a jointly operated factory park near the North Korean city of Kaesong is to have a long-term impact on the North Korean economy as well.

But the data from 2015 indicates North Korea was hit hard by a collapse in coal and iron ore prices in the commodities markets, according to the report.

North Korea iron ore initially remained competitive in the Chinese market, staying at a price that was 73 percent of market rates, but became less of a bargain in 2015 when it was priced at 84 percent of market rates, which also dropped precipitously last year.

The report stated China's economic slowdown and new environmental policies targeting the coal industry played a role in the decline in North Korea coal and other exports, local newspaper Maeil Business reported.

In 2015, commodity prices dropped by more than 20 percent for coal and about 31 percent for iron ore.