The Paektu factor: how Pyongyang’s economic reforms vanished at the Sino-North Korean border

Why has China's overwhelming economic leverage over North Korea—over 90 per cent of Pyongyang's foreign trade—failed to produce the market-oriented reforms Beijing has sought for three decades? This paper introduces the Paektu factor: the interaction effect produced when a personalist autocracy with an existential commitment to dynastic survival confronts a patron whose own strategic interests preclude the credible use of coercion. Two mechanisms carry most of the explanatory weight: China's inability to credibly threaten withdrawal from a regime whose collapse would damage its own security interests, and the Kim regime's narrow winning coalition, which makes resistance to structural opening a rational survival strategy. Tracing Beijing's Sunshine Policy with Chinese Characteristics across 1996–2025, the paper shows that while marketisation occurred from below and was partially institutionalised under Kim Jong-un's 'market Leninism', the regime consistently absorbed economic activity without permitting the structural opening that would have empowered alternative power centres. The COVID-19 border closure demonstrated the regime's willingness to endure near-autarky to preserve political control; the Russia pivot restored a dual-patron architecture that further diluted China's influence. The Paektu factor represents a structural constraint on external influence that conventional models of economic statecraft systematically underestimate.