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North Korea trade with China shrinks 15 percent

A South Korean government think tank attributed the decline to sinking coal prices.

By Elizabeth Shim
North Korea trade with China declined owing to a drop in prices in the commodities markets. Sanctions are also expected to hit Pyongyang hard, according to a South Korean government think tank. File Photo by Stephen Shaver/UPI | <a href="/News_Photos/lp/fe693c05d817faa515798a7227eba2e7/" target="_blank">License Photo</a>
North Korea trade with China declined owing to a drop in prices in the commodities markets. Sanctions are also expected to hit Pyongyang hard, according to a South Korean government think tank. File Photo by Stephen Shaver/UPI | License Photo

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.

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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.

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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.

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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.

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

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