While responding to the GT reporter Li Yanjie’s query about the investment environment in N Korea, Gao said North Korea had low credibility. However, he admitted though in the short term there was a high level of risk, but in the long term Chinese companies might benefit from investing there.

The history of Sino-North Korean trade dates back to 1954 as China’s Ministry of Foreign Trade, as it was then known, approved border trade between both sides in regards to local residents’ demands for food items. At that time, China’s main exports to North Korea were clothes, paper, textile pigments and other light industry products, and China imported seafood and fruits from the North.

Between 1971 and 1981the trade was interrupted, it got revived since 1982 to hit a trade volume of about $540,000, and grew manifold to reach at around $52.08mn in 1989. According to the Dandong statistics department, the trade volume between Dandong, the main border province and North Korea increased from $15.39mn to $314mn between 1990 and 2004.

At the beginning of the 1990s, the bilateral trade accounted for only 11.6 percent of North Korea’s total foreign trade volume. But by mid-1990s, the border trade reached around 30 percent of North Korea’s total foreign trade volume. However, North Korea’s economy went through a recession during the latter half of 1990s, causing slide in trade.

Gao further added that since 2001, Sino-North Korean trade volume had grown rapidly due to two reasons, one being economic sanctions, and other as China needed the Korean mineral resources in exchange of food. According to the statistics from China’s Ministry of Commerce, by 2007, the two-way trade has reached 41.71 percent of North Korea’s total foreign trade volume.

Although the recent accidental killings of three Chinese by the North Korean border guards have earned nation-wide ire from the people of China, the ties seemed to be strong as North Korean administration is purportedly willing to reciprocate to any Chinese call amicably. Furthermore, Pyongyang has no option other than yield to any kind of Chinese pressure, if applied, as it is hugely dependent on China in diplomatic and trading needs.

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The decree stipulated that any cash in excess of a certain limit would become invalid. This in turn forced citizens to convert the old won to goods including electronic items, kitchenware and so on to avoid losing their lifetime earnings. The Tribune News Service reported the price of rice last month in the North rose tenfold at private markets, and residents hoping to purchase food often had to wait in line for hours in subzero temperatures.

The North Koreans largely saved money in the physical form as they mistrusted state-run banks. Song Jung-su, a former railroad security official who defected from the North in 2006 but who is still in touch with his relatives apprised that the wresting of people’s life savings by the totalitarian government had made many to commit suicide.

The currency change is understood to have designed in a bid to check inflation as well as to re-establish Communist Kim Jong-Il regime’s control over the economy that was slipping from its hand for sometime from now to the increasing free market forces. As the direct fallout of the redenomination debacle, the dictatorial government has shown the door to the Workers’ Party finance and planning department chief Pak Nam Gi, the one who spearheaded the currency revamp. It is been rumoured that Pak has been made a whipping boy in an attempt to save the heir apparent to the Kim Il-sung dynasty, Kim Jong-Un, the third son of the current leader.

A diplomatic source is understood to have informed Chosun Ilbo newspaper that if the redenomination had been a success North Korea would have attributed it to the leadership of Jong-Un and used it to justify a third-generation succession. The situation is believed to have made worse by an order which permits shops to be opened only for four hours a day and operated by women above 40, and many have already downed shutters.

The North which is reeling under the pressure of hyperinflation has witnessed sporadic violence where any protest against the state is meted out with death penalties. Such incidences clearly indicate that people do not fear for their lives anymore as many feel they have already lost almost everything. The move which was supposed to curb rising prices backfired as the limited supply of goods in the public distribution system failed to keep up with the demand.

Ever since the formation of the North, it has largely suffered while yielding to be misused by failing states and emerging powers as a deterrent to the constantly intervening Western interests in the regional affairs. The Communist Korea has relied on the overseas essentials aid since the mid-1990s, when the economy crumpled owing to famine and mismanagement, which wiped out 2mn people. The absence of aid from the former and now defunct Soviet Union has also made it worse since then for the Stalinist state.

A state that used most of its revenues to build defense infrastructure is already facing the UN sanctions for its recent nuclear test. Prima facie, its economy looks frail with the country’s latest suicidal redenomination move. It is hoped that both the international community and the North Korean government would come to their senses to save the people of this failing economy.

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The summit happens to be the first forum after the North Korean satellite launch which has been widely criticized by Japan, South Korea and the western world as an attempt to test its ballistic prowess. As a result, many ASEAN members are concerned about the summit getting reduced to a forum for finding ways to penalise N. Korea for their action rather than meeting region’s economic problems. Earlier, despite the US and its allies headlining the Korea’s satellite launch as rocket launch and urging the UN to impose sanctions, China and Russia had called for patience.

The ASEAN summit was originally planned for last December and postponed with two phases in late February and April respectively this year due to anti-government protests that shut down Bangkok’s main international airport for several days during the scheduled period. Usually the summit is an annual gathering of representatives or leaders from ASEAN group, but the global economic crisis have compelled the group to include the economic powerhouses of the region in the forthcoming summit.

According to sources, the Australian prime minister, Kevin Rudd will once again appeal the participants to review his proposal in last May for an Asia-Pacific Union (APU) in the line of the EU. Rudd’s proposed APU member states account for more than half the population of the world and is worth about half the global economic output. His call is likely to have more takers this time around since the summit has plans to formally denounce any form of protectionism to tide over the current economic mess quickly.

The ASEAN leaders will make sure that the focus is on climate change, which dominated the last summit, will be followed by trade, energy, food security and disaster management. They also hope the meet will include the finer points of the recently concluded G20 Summit to aid struggling economies get out of the present economic quagmire left behind by the global financial and economic crisis.

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