International Significance of the Chinese Experience of Economic Reforms: Applicability for Contemporary North Korea
North Korea still has a socialist planned economy in which the means of production are owned by the state and collective organizations. However, “marketization from below” has been taking place in the country since the 1990s, and the authorities have introduced individual measures to decentralize economic management. These processes make it relevant to look into the prospects of the DPRK's economic system in the context of the experience of other former socialist countries. The article examines similarities and differences between directions of economic reforms in the PRC under Deng Xiaoping in the late 1970s - late 1980s and changes in the economic management system of the DPRK under Kim Jong-un. In 2012-2014, North Korea introduced a set of measures to increase the independence of economic units and provide opportunities for material incentives. They included a transition to smaller production units in agriculture and an expansion of management and production rights of enterprises. The results of these measures actually put the market in place of a “useful addition” to planning, as it was in the PRC at the first stage of reforms. China went to legally recognize a private economy at the initial stage of transformation. However, North Korea is still far from moving in that direction and keeps condemning diversification of forms of ownership in a socialist state. In addition, the possibility of using the element of “openness” from the Chinese reform model is significantly limited in the North Korean case, despite individual attempts by the country's leadership to attract investment in special economic zones. The unresolved nuclear issue and the current international sanctions have effectively cut off the DPRK from the world financial system and significantly limited the scope of foreign trade. The article concludes that the DPRK is at the initial stage of transition from the command economy to the market one, but this is camouflaged by official rhetoric. Moreover, the growing global confrontation between the United States and China may stimulate Beijing to continue economic support for Pyongyang. And this support may allow the DPRK leadership to postpone economic reforms and continue balancing on the level of “under-reform” in a hostile external environment.