The final substantive chapter examines the impact of international sanctions on the North Korean political economy. On the one hand, sanctions can be said to have exacerbated the tendency whereby North Korea has become an economic appendage of the booming Chinese economy. Indeed, we examine how the strengthening of sanctions have coincided with a shift away from economic relations with its erstwhile trading partners of South Korea and Japan and towards China. In terms of their impact, we argue that sanctions until 2017 at least largely failed to exert pressure on the North Korean economy, but they have at the same time deepened the illicit nature of its external economic relations. Even less have they translated into political pressure on the North Korean regime. We also examine the impact of increased enforcement by China of UN sanctions since 2017 and the Trump administration’s “maximum pressure” campaign. By examining the unintended consequences of sanctions, the chapter contributes to critiques of the mainstream sanctions literature and has direct policy implications.

In chapter seven, we examine the more direct material impact of the rise of China on the North Korean economy. This is examined through the lens of the broader debate regarding the impact of China’s rise on developing countries. We argue that while North Korea’s trade relations with China do resemble the resource dependency found in many Global South countries, North Korea has in recent years become increasingly integrated into cross-border regional production networks, with textile manufacturing being outsourced to North Korean producers as well as the growing dispatch of North Korean labour to China as a result of ongoing economic shifts within China itself. Although this relationship can be conceptualised as a form of economic dependency, North Korea’s economic collapse in the 1990s preceded its growing economic relations with China. In this sense, China has played an important facilitative role in North Korea’s economic recovery following the 1990s. However, concerns with the North Korean leadership regarding import dependency on China have in recent years led to a policy emphasis on domestic import substitution, a strategy that has had some success, albeit at relatively low levels of production.

In chapter two, we examine North Korea’s post-war recovery and its extraordinarily rapid transition towards a modern industrial economy in the 1950s. Here we draw attention to the massive financial support that North Korea received from elsewhere in the socialist bloc in that decade. The existence of the more advanced ally of the Soviet Union and its generous developmental assistance underpinned Kim Il Sung’s ultimately erroneous belief that North Korea would not have to sacrifice living standards in order to pursue a strategy of heavy industrialisation. Developmental strategies were, however, mediated through ongoing domestic political struggles. The factional disputes of the 1950s were in part related to questions of developmental strategy and were a reflection of the exiled nature of Korea’s communist movement during the colonial era and the nature of the various factions’ international linkages. In this chapter, we also draw attention to the substantive nature of North Korea’s developmental policies in the 1950s, including that of the socialisation of production. We also examine the decline of international aid to North Korea towards the latter part of the decade, and how that led to increased emphasis on mass mobilisation campaigns. This chapter consists of original, unpublished material.

In chapter six, we examine the degree to which the Kim Jong Un regime has proactively sought to reform its political economy in line with China’s economic reforms. While political considerations amongst North Korean policymakers have led to an explicit rejection of Chinese-style reform, the North Korean authorities have in fact carried out a number of reforms that are broadly similar in substance to those in China. In this respect, we pay particular attention to the reform measures carried out under the slogan of “Our-Style Economic Management Method.” The structural differences between the Chinese and North Korean political economies have, however, meant that the reforms have had divergent impacts. This relates to the fact that it could be argued that while China (and Vietnam) were in the 1980s pursuing a more classic model of rural-based industrialisation, North Korea faced a somewhat different challenge of structural adjustment as seen in the former Soviet bloc (and China’s northeast). The greater degree of industrialisation and urbanisation in North Korea have led to correspondingly greater bureaucratic resistance to reforms.

In chapter five, we argue that the economic collapse and famine of the 1990s profoundly transformed North Korea’s political economy. North Korea’s population increasingly turned towards market activities for their survival. North Koreans have continued to rely on markets for food and everyday goods, though marketisation has since expanded to the services, transport and housing sectors. While much of the existing literature has presented state and market as situated in a zero-sum relationship, we challenge the ontological separation between state and market to argue that the rise of the market in North Korea has been closely intertwined with the state. State officials have increasingly become involved in market activities, and the growing entrepreneurial class have entered into partnerships with officials as a means of negotiating the lack of clear property rights. The state has also taken a leading role in furthering the process of marketisation through the creation of new economic sectors, such as the mobile communications sector, for example.