Greg Pavone and Jin Sun

Harvard Library HOLLIS Number: 014103163

Executive Summary

The North Korean regime is using coal in tremendously sophisticated and strategic ways to thrive despite economic sanctions, and private Chinese trade companies are knowingly or unknowingly playing a critical role. North Korea is effectively evading sanctions, and coal is their principal vehicle to do so. Coal is a strategic resource for the North Korean regime. In 2013, North Korea eclipsed Vietnam to become the world's number one exporter of anthracite, the highest ranked type of coal. Coal generated $1.4 billion in revenue for the DPRK in 2013, 10% of the country's GDP. These profits are providing the hard currency that the regime relies on to procure much of what it most needs. Business elites in a few newly formed stateowned, but privately-controlled trade companies in North Korea are thriving-coal being the most significant income contributor. North Korea's business elites are highly intelligent economic sharpshooters who methodically take advantage of Chinese decentralization to maximize profits. Until this PAE, no researcher has comprehensively put the pieces together to develop a robust explanation of how the North Korean regime survives through this means.

  • Images

    Recent Developments

    China-DPRK Coal Trade

    Increasing DPRK-PRC commercial activity is coming at a strategic time. Business opportunities in China are proliferating for all—including North Korean state trading companies....

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  • Colors

    The Trade Spike

    The Role of Coal for China

    In 2013, North Korea eclipsed Vietnam to become the world’s top anthracite exporter. Total domestic anthracite production in Vietnam has not changed significantly....

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  • Video

    Why Coal is Strategic

    Keeping DPRK Stable

    Coal is like oxygen to the North Korean regime. In other words, the coal industry as utilized by the Kim Jong-eun regime is the lifeblood that keeps the whole DPRK establishment afloat....

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  • I would call this the best intelligence report I have ever read on North Korea. The implications of this paper are going to be quite profound. I see this study as immensely powerful evidence of the need to talk with Pyongyang.

    Donald P. Gregg, U.S. Ambassador to the
    Republic of Korea from 1989-1993