The North Korean Economy Is Recovering Thanks to Russia and China. The Geopolitical Implications Are Serious

If you’re paying attention, you can easily see that something has changed in Pyongyang. After a six-year hiatus, Air China discreetly started operating direct flights to the North Korean capital in March. After being suspended and nearly forgotten for years, passenger rail service between Beijing and Pyongyang resumed daily operations. Maybe little things. However, little things often have a big impact when it comes to geopolitics.

This week, a report from South Korea’s Ministry of Unification confirmed what observers have been quietly observing for months: the North Korean economy seems to have transitioned from a contractionary phase to a phase of gradual recovery. China and Russia are the two main forces behind this shift, and the ramifications of that statement merit far more consideration than they currently receive.

The relationship between North Korea and Moscow has developed into something that resembles an economic alliance during the war. Over the course of about two years, Pyongyang is thought to have made up to $14.4 billion by giving Russia military support, including troops, ammunition, and weaponry that directly contributed to the conflict in Ukraine. Due in part to those military connections, the North’s economy expanded by almost 4% in 2024, the fastest rate in eight years, according to South Korea’s central bank. It’s difficult to ignore the fact that a war in Eastern Europe is bringing about North Korea’s biggest economic gains in almost ten years.

Pyongyang has “gained a lot” from Moscow, according to Peter Ward, a research fellow at the Sejong Institute, who warned NK News that the revenue stream might not last the duration of the conflict. Whether Russia would continue that degree of economic involvement after hostilities in Ukraine end is still up in the air. Most likely less. Maybe a lot less. However, the money is flowing right now.

In the meantime, trade with Beijing increased by 25% in 2025 and almost reached pre-pandemic levels. In December alone, Chinese imports into North Korea totaled $257.4 million, the highest amount since October 2019. President Xi Jinping and Kim Jong Un met in September, and Beijing’s foreign minister visited Pyongyang last week and publicly discussed expanding “practical cooperation.” There is a real diplomatic thaw, and the numbers reflect its impact on the economy.

This story is told in a way that sounds almost hopeful. Speaking at a historic congress in February, Kim Jong Un himself declared that his nation had overcome its “worst difficulties” over the previous five years and pledged to raise living standards. He exuded confidence as he stood before officials in a nation that does not release official economic data. It’s another matter entirely whether or not he was believed.

The more difficult reality is that anyone observing from the outside should be uneasy because this recovery is being built on a geopolitical foundation. There is no reform in North Korea. It’s not opening. Despite pressure from other countries, it is still developing nuclear and ballistic missile programs that it has promised never to give up. What has changed is that it now has two influential patrons who are willing to maintain its financial viability for personal reasons. Russia requires ammunition and cannon fodder. China requires a bargaining chip and a buffer state. For its part, North Korea is making the most of its own leeway by taking advantage of the rivalry between Beijing and Washington.

While China is crucial to North Korea’s economy, Beijing has the upper hand and is aware of it, according to Professor Jia Qingguo of Peking University’s School of International Studies. Given that China has not completely lifted sanctions and that North Korea is “not getting anything from the U.S.,” Ward contends that Pyongyang is not quite winning the geopolitical chess match it believes it is playing.” Even so, it’s hard to argue that sanctions by themselves are accomplishing what the international community initially believed they would.

If Seoul’s planners get their way, the path through the end of the decade is expected to look very different. The five-year plan presented by South Korea’s Unification Minister calls for resolving the tens of thousands of families who have been split up since the Korean War and transforming the demilitarized area into a peace tourism destination. In all honesty, it’s an ambitious vision. Additionally, it is being drafted against the backdrop of a North Korea that has less motivation than ever to participate in negotiations, at least for the time being.