China’s trade with North Korea sinks in Oct after UN sanctions

Beijing fixes yuan midpoint at 5-week high

BEIJING, Nov 23, (RTRS): China’s trade with North Korea fell to $334.9 million in October, its lowest since February as imports sank to their weakest in years, data showed on Thursday, the latest sign that tough new sanctions cut business with its isolated neighbour.

The total is down almost 20 percent from September and compares with $525.2 million a year ago, according to customs’ data.

The data represents the first whole month since the latest United Nations penalties came into force on Sept 5, banning Pyongyang from selling coal, iron ore, lead, lead ore and seafood abroad.

The world’s second-largest economy bought goods worth $90.75 million from North Korea in October, down sharply from $145.8 million in September and the lowest on government records going back to January 2014, data from China’s General Administration of Customs shows.

Exports plunged to $244.2 million, the weakest since February. That compares with $266.4 million in September and $286.9 million in October last year.

Trade between the two countries has slowed this year, particularly after China banned coal purchases in February.

But the pace and scale of the drop suggest the most recent curbs are hurting Pyongyang’s ability to sell some critical commodities to one of its chief trading partners.

The UN estimated the latest ban, imposed after its two intercontinental ballistic missile tests in July, would slash by North Korea’s $3-billion annual export revenue by a third.

The data is also likely to underscore Beijing’s strongly-stated stance that it is rigorously enforcing UN resolutions aimed at reining in Pyongyang’s missile and nuclear programmes.

The data comes as US President Donald Trump ramps up pressure on President Xi Jinping to tighten the screws further on Pyongyang, with steps such as limits on oil exports and financial transactions.

A more detailed breakdown by commodity will be released on Friday.

Meanwhile, China’s central bank set its official yuan midpoint at the strongest level in five weeks on Thursday at 6.6021 per dollar, reflecting spot yuan performance a day earlier and dollar movements in global markets overnight. The move in the official guidance rate was the biggest one-day strengthening in percentage terms since Oct 11. Thursday’s official midpoint was 269 pips or 0.41 percent firmer than the previous fix of 6.6290 per dol-

lar on Wednesday.

Market participants said the official fix came in line with their forecasts. Thursday’s fixing was guided at the firmest level since Oct 18.

The yuan firmed against the US dollar on Wednesday, boosted by tight liquidity in the offshore market that pushed CNH borrowing costs to the highest in more than five months.

In another report, Chinese shares tumbled on Thursday with the bluechip index suffering its worst fall in nearly 1-1/2 years as worries about a selloff in the bond market bled into equities.

Consumer and healthcare firms led

the fall and dragged the CSI300 index down sharply by 2.93 percent, to 4103.73, its biggest fall in percentage terms since June 13, 2016. The broader Shanghai Composite Index lost 2.26 percent to 3352.99 points, its worst day since December.

Treasury bond yields remained at multi-year highs despite above average cash injections by the central bank this as concerns that authorities would tighten lending rules took their toll.

“The government is stepping up deleveraging, and that would have an impact on liquidity in the stock market as well,” said Yang Hai, strategist at Kaiyuan Securities.