Grain Situation and Economic Relationship between North Korea and China

North Korea\u27s grain situation, which reached its nadir in the mid 1990s, has slightly recovered in succeeding years. However, due to flood damage in 2006 and 2007, the WFP estimated that in 2008 North Korea would be 1.66 million tons of grain short. On the other hand, around the world grain prices are increasing and many countries are restricting such exports. In 2008 China also tightened its export restrictions by imposing duties on grain exports and putting export quotas on flour even though she enjoyed rich harvests for four consecutive years. China has been exporting an average of 320,000 tons of grain to North Korea every year this decade (some grain exports are aid). China exported 103,000 tons of grain to North Korea in the first half of 2008, which is a 234.2% increase over the same period of the previous year. This is extraordinary, because China\u27s grain exports to the rest of the world (one million tons) decreased by 79.2% over the same period from the previous year. From the point of view of her grain production, which is about 500 million tons a year, China had to decide whether to export grain to North Korea based on strategic aspects. China needs to provide minimum support to North Korea to avoid problems with the Korean minorities living in China, and North Korean refugees living in China and to keep the peace in North East Asia. For China, the cost of exporting grain is smaller than the cost of involvement in the chaos of North Korea