Why North Korea Refuses To Liberalize Its Economy Despite the Success of China

At present there are five communist countries in the world, Vietnam, Laos, People’s Republic of China, Cuba, and Democratic People’s Republic of Korea. All of these, with the exception of Cuba, are Asian countries. While Vietnam and China are on the upswing economically, North Korea remains one of the poorest. The reason for this may be because it, along with Cuba, have an entirely state run economy. In comparison to the other three Asian communist countries, North Korea has the lowest GDP per capita of the four at 1800 USD (2008). (1) With North Korea being as centrally located to two of the richest countries, Japan and China, it would seem that they would enjoy some of the same riches of these two. What has caused such differences in China and North Korea to make them worlds apart economically? The research question which this paper seeks to address is why the North Korean regime has refused to liberalize itself economically despite the success of its East Asian neighbors.

Trade

Imports and exports for North Korea is a business like any other. Their imports, which come only from China, South Korea, Thailand, and Russia equal to about 3.055 billion US Dollars. Their exports, which come from South Korea, China, and India, equal to about 1.68 billion US Dollars. If you look at the trading , then look at the trading of China, there are a couple of figures that stand out. First, the trade is conducted with more countries. North Korea’s bulk of trade comes with China and South Korea; almost half with just China on imports and exports, and over 40% with South Korea. China, however, their trading is spread out. There is no one or two countries that dominate trade. China also has trade agreements with the United States...

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