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Lips and Teeth: Chinese-North Korean Trade and FDI and its Impact


The China-North Korea relationship has been detailed as that of “lips and teeth.” To what degree does that notion continue today, and does it fully encapsulate the relationship between the regimes? In particular, this paper focuses on the economic—foreign direct investment and trade—side of the relationship between China and North Korea and its impact on this relationship. North Korea makes up very little of China’s trade volume, while China made up nearly 90 percent of North Korea’s export volume in 2010. It is this economic aid, and its substantial increase over the past decade in the face of sanctions from the West, that has helped support the Kim regimes. Yet, it is clear that this does not give the Chinese the leverage that is often portrayed in the media and by politicians. China’s desire to maintain the geopolitical status quo and keep a buffer between it and U.S.-ally South Korea has forced China to continue to support the Kim regime and develop the economic relationship. Thus, while the China-North Korea relationship may no longer be aptly described as that of “lips and teeth,” and though there are signs of increasing Chinese pressure on Pyongyang both rhetorically and through UN sanctions, the economic relationship between China and North Korea is likely to continue.

Trevor Clark is a second-year M.A. student at SAIS, concentrating in China Studies. After graduating from Michigan State University with a B.A. in Social Relations and Policy in 2009, he spent three years working for U.S. Senator Debbie Stabenow of Michigan. Trevor also spent a year teaching English and studying Mandarin Chinese in Shenzhen, China. He most recently held an internship in the Government Affairs Department of the American Chamber of Commerce in China.