China's decision on Sunday to temporarily suspend imports of coal from North Korea could hurt the latter's economy, which depends heavily on these shipments, but the impact will be limited because of the timing and length of the sanctions.
The Ministry of Commerce and General Administration of Customs said in a joint statement that China will halt coal imports from North Korea from Sunday to December 31, in implementing a UN Security Council resolution.
The resolution, which was adopted on November 30 in response to North Korea's nuclear test in September, requires all states to prohibit the procurement of coal, iron and iron ore from North Korea until December 31.?
The move effectively caps the country's coal exports at 7.5 million tons a year or revenue generated through coal exports to $400 million, whichever is lower, and it could cost North Korea $700 million in coal revenue, according to the New York Times on November 30.
As the largest importer of North Korean coal, China's decision could hurt the North Korean economy, according to experts.
"Coal plays a very important role in the North Korean economy. It is the product that brings the most foreign exchange," Lü Chao, a research fellow from the Institute of China's Borderland History and Geography Studies at the Liaoning Academy of Social Sciences, told the Global Times on Sunday.
North Korea generated $1 billion in revenue from coal exports in 2015, according to Lü. Given China's status as the largest importer of North Korean coal, "the measure will surely affect North Korea's foreign trade," he said.
Between March and October this year, China imported 24.8 million tons of coal from North Korea, media reports said.
However, the impact of China's decision might also be limited because the sanction period is short and the timing is not the best, according to Li Shaode, head of the Center for East Asian Studies at the Liaoning Academy of Social Sciences.
"If the sanctions had started in September or October, they would have had a great impact on the country because that's the time when countries imported large quantities of coal from North Korea," Li told the Global Times on Sunday.
Lü also said the impact of the decision remains to be seen, and it depends on whether China will extend such measures into next year.
