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China is trading more with North Korea but buying much less coal

Posted July 13

China has slashed imports of coal from North Korea even as overall trade between the countries continues to rise.

A Chinese government official said Thursday that China-North Korea trade was worth $2.6 billion in the first half of 2017, up about 10% over the same period last year.

But coal imports slumped by 75%, suggesting Beijing is gradually choking off North Korea's biggest source of foreign currency.

China's overall imports from North Korea fell 13% compared to the first half of 2016, said Huang Songping, a spokesman for China's customs department. They had risen by 18% in the quarter ended March.

The decline follows China's decision in February to ban all imports of North Korean coal.

President Trump has repeatedly criticized China over its trade with North Korea, calling on it to exert more pressure on Kim Jong-un's regime. He called out the "nearly 40%" increase in trade in the first three months of the year on Twitter last week.

"So much for China working with us - but we had to give it a try!" he added.

Related: How North Korea makes its money

The overall rise in trade has been driven by China's exports to North Korea, which were up by nearly 30% in the first half of the year.

China insists none of its current trade with Pyongyang is in violation of international sanctions. Huang told reporters on Thursday that the rise in trade was mainly due to an increase in textile exports.

"The sanctions imposed by the [United Nations] are not a comprehensive embargo," he said. "Trade related to the people's livelihood in the North Korea, especially those that embody humanitarian principles, should not be affected by sanctions."

Related: Trump sanctions Chinese bank in bid to rein in North Korea

The new data reflects China's attempt to pull off a delicate balancing act between the U.S. and North Korea, where it wants to prevent the regime collapsing because it worries about what that would mean for regional stability.

But Beijing is also eager to avoid riling Trump.

"If Trump were to give up on Chinese support in terms of containing North Korea, then there's a risk of increased trade tensions between the U.S. and China, which could negatively impact China's overall export performance," said Julian Evans-Pritchard, China economist at Capital Economics.

"The new figures that the customs bureau have put out today suggest [they] have made an effort, at least on paper," he added.

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