North Korea shifts from raw material to processed goods exports

In 2026, North Korea is moving away from exporting raw materials to China and instead focusing on joint ventures with Chinese investors to produce finished goods. This shift in strategy has been highlighted by trading units according to a source speaking to Daily NK. Previously, items like pine nuts, mushrooms, and medicinal herbs were shipped to China in their raw forms.

However, recent investments from Chinese investors have led to the construction of production facilities within North Korea, where local workers process raw materials into finished goods. This transformation is part of a broader push by North Korea and China to formalize trade through customs offices, moving away from informal smuggling channels.

The shift was noted as a long-term plan, with trading units now importing production equipment and processing technology from China. This move requires greater investment from Chinese traders, as they must now secure approval from both governments before the finished goods can leave North Korea. The change also brings more risk, as authorities in North Korea could still block the goods from leaving.

Despite these challenges, traders acknowledge that this new export model aligns with North Korea's goal of earning more foreign currency than raw material exports alone. This shift in trade strategy is taking place amid a thaw in North Korea-China relations, and traders are closely monitoring how it will evolve in the long term.