ABSTRACT
Economic statistics from the immediate post-war period show that the Koreans were able to maintain local production of manufactures in every identifiable industrial category, indicating that while the Japanese had dominated economic life in the colony, local residents had acquired and developed a considerable amount of economically relevant skills. The best statistical indicator of the state of the North Korean economy is its declining volumes of international trade. A healthy economy located in booming Northeast Asia should exhibit strong increases in trade volumes. The North Korean government might pursue policies of fundamental economic reform. This would involve decisively liberalizing and marketizing the economy. Successful reform of a more industrialized economy such as North Korea is likely to be far more difficult in purely technical terms, and imply tremendous change for the North Korean economy. China may prefer continued economic engagement with South Korea, and would be willing to expend some resources to maintain North Korea as an allied buffer state.
