/SOUTH KOREA: J.P.Morgan note that......>

NORTH KOREA: /SOUTH KOREA: J.P.Morgan note that "North Korea's resentment of the

South Korean government appears to be more deep-rooted... That is, Kim Yo Jong's

statement implied North Korea's frustration regarding South Korea's stance to

abide by sanctions against North Korea, amid North Korea's economic hardships

with the sanctions and COVID-19 border closure. To be sure, North Korea's trade

deficit with China is estimated to deepen to about 14% of GDP in 2019 after UN

sanctions escalated in 2017, and North Korea's imports from China collapsed in

March to about 20 million USD compared to 256.7 million USD in December 2019,

likely with the border closure after COVID-19. Looking forward, geopolitical

tensions are expected to escalate further, as North Korean officials threatened

to cancel the inter-Korea agreement to reduce military tensions around the

border. During past tension events, military engagements have included

battleship combat (1999 June, 2002 June) and the exchange of artillery fire in

some local areas (2010 November, 2015 August). That said, the possibility of a

wider-range of military engagement is remote, in our view, considering the

serious losses to all parties involved in such a scenario."