ABSTRACT
Under Deng Xiaoping's leadership, the People’s Republic of China (PRC) launched a reform program in late 1978, beginning with economic reforms in the countryside and extended later to reforms of industry and commerce in the cities. By the time the PRC was founded in 1949, Korea had been divided in two by the occupying powers, the United States and the Soviet Union. China's policies toward Korea shifted in accordance with the leaders' preoccupation with economic development and their recognition that external threats had diminished. Affinities in aspects of their domestic politics have helped to maintain the linkage between China and North Korea. Sino-Soviet trade, although still small, has been increasing rapidly and probably will continue to grow in the 1990s. Not long after Deng Xiaoping inaugurated economic reforms and the opening to the outside in 1978, China and South Korea began to trade through Hong Kong.
