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N. Korean economy likely to get boost from China: KDI

All Headlines 10:10 January 01, 2012

SEOUL, Jan. 1 (Yonhap) -- North Korea will likely become stabilized within months after the death of leader Kim Jong-il due mainly to China's rapid economic assistance, a major South Korean think tank said Sunday.

A report by the Korea Development Institute on the death of Kim Jong-il and its impact on North Korea's economy forecast that China will soon begin providing economic assistance to North Korea in a rapid manner to help stabilize its communist neighbor.

"In that case, North Korea's economy will escape from a temporary wait-and-see status and get stabilized gradually so the North could witness more brisk economic activity at markets at around April 15, the anniversary of the birth of Kim Il-sung," the report of the state-run think tank said.

Kim Il-sung, the founding father of the North Korean government, is the father of Kim Jong-il, who ruled the North since 1994 before he died of a heart attack on Dec. 17.

Kim Jong-il's third son, Jong-un, has been officially installed the supreme commander of the North's 1.2 million-strong army and the leader of the North's ruling Workers' Party.

Chinese President Hu Jintao sent a message Saturday to congratulate the new leader in his late 20s on his appointment as the supreme commander of the army.

China has been the biggest beneficiary of the impoverished, but nuclear-armed North despite international sanctions on Pyongyang due to the reclusive state's nuclear and long-range missile programs.

In a more positive scenario, the North's new leadership "will actively seek rapprochement with South Korea and the United States and reactivate inter-Korean economic cooperation to help the North Korean economy escape doldrums and grow very actively," the report said.

In a negative scenario, Pyongyang will tighten its grip on North Korean citizens and their economic activity and suffer from reductions in trade with and investment from China, the report said.

"However, we do not see this happening for the time being," the report said, citing China, "which does not want instability in North Korea."

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