Asia Economy

Why Kim Jong Un is smiling on his birthday

North Korean leader Kim Jong Un has a photo session with participants in the second meeting of KPA logistic personnel in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang December 25, 2014.
KCNA | North Korea | Reuters

Three years ago when Kim Jong Un took power, there was doubt an inexperienced, twentysomething could prop up North Korea, let alone lead a country of some 25 million people.

But Kim has very much cemented his control. The country's trade with the rest of the world has never been higher, and its already internationalized economy is expanding. The regime's top brass has been consolidated. Sanctions announced by President Barack Obama last week treads previous territory. And the equivalent of North Korea's one percent remains very much in charge.

"He's stable," says David Kang, an international relations and business professor at the University of Southern California. "I would suspect that now we might be able to really see what policies, foreign and domestic, he wants to take in the next three to five years."

Here's a review of the north's changing economy, and some key reasons why Kim might be feeling good on his 32nd birthday. It's presumably Thursday, though his date of birth and personal details—like many things in North Korearemain opaque.

Growing international trade

The north's economy is surprisingly internationalized, with no signs of slowing down.

In 2013, as an example, North Korean trade totaled $8.6 billion, with 77.4 percent of that amount stemming from China, which accounted for $6.7 billion. In 2003, North Korean trade with China was a mere $1.05 billion, according to estimates tracked by "North Korea: Witness to Transformation," a blog about North Korea. Other, smaller trade partners include Russia and South Korea.

While full 2014 figures have not yet been compiled, monthly data from January to September last year show similar record-high trade levels, said Kevin Stahler, a research analyst at the Peterson Institute for International Economics.

"There's a lot more international trade than 10, 15 years ago," said Kang, also director of USC's East Asian Studies Center.

Much of this growing international trade is owed to the north's strategic alliance with China. North Korean government leaders use banks and middle men, based in China, to conduct business. The poverty-stricken country enjoys shipments of food, technology and other resources from neighboring China and beyond.

Sanctions and trade

Recent actions by the U.S. government in response to allegations that North Korea hacked Sony Pictures Entertainment, however, potentially threaten Kim's progress.

Last Friday, the U.S. Treasury Department imposed sanctions on the north in response to the cyberattack on Sony last November. The sanctions specifically cited 10 individuals, all North Korean government officials, and three government-controlled entities, all key players in driving the north's economy and weapons program.

The executive order also specifically targets third-party countries that support the regime, as the order "is warning Chinese financial institutions that they could potentially also get hurt if they continue to deal with North Korea," Kang said.

The groups, cited in recent sanctions, are North Korea's primary intelligence organization and, importantly, two trading groups linked to arms dealership and procurement of commodities and technologies. Some of the provisions overlap with previous sanctions that largely have been ineffective in clamping down on money-making operations.

Over the years, in fact, the regime has nurtured a growing, global ecosystem designed to elude scrutiny of assets and trade dealings, according to United Nations documents. The 10 individuals cited in the recent sanctions are posted in China, Russia, Iran, Syria and Namibia, according to the U.S. government.

Read MoreNorth Korea's international network

North Korean leader Kim Jong Un smiles during a visit to the Chonji Lubricant Factory.

Hacking alone?

Either way, the rogue state still owes much to powerful neighbors.

If, as U.S. officials say, North Korea's cyberarmy was behind the massive Sony data breach, some doubt the country acted alone.

"North Korea has forged cooperative cyberties with several other countries including China, Russia, Syria and Iran," according to analysis by Hewlett-Packard released in December.

"Given the dilapidated state of North Korea's IT infrastructure, it appears that some of North Korea's cyber activities are carried out in China, or at the least via servers located in China," said Marcus Noland, an expert on the north's economy. He made the comments in a blog post for the Peterson Institute for International Economics.

Read MoreNorth Korea: More cyber warrior than you think

Keeping out the outside

In the end, the longevity of leader Kim's rule may lie in his ability to clamp down on outside influences including smuggled foreign DVDs and technology. Data-filled USB thumb drives, for example, already are making their way through the porous 880-mile border between North Korea and China. Some of that technology ends up in black markets that are a permanent fixture in the north's economy.

Read MoreHow millennials are shaking North Korea's regime

North Korean "defectors regularly tell us that the most effective way to induce change in North Korean society is to increase the North Korean people's access to information," said Sokeel Park, director of research and strategy for Liberty in North Korea, an international NGO that supports North Korean escapees.

North Korean leader Kim Jong Un looks through a pair of binoculars during an inspection of the Hwa Islet Defence Detachment standing guard over a forward post off the east coast of the Korean peninsula.
KCNA | North Korea | Reuters

So amid this lockdown on accessing foreign media, which is a punishable offense, has any great number of people in the north heard of, or seen, "The Interview?"

The answer is no. The comedy portrays two American journalists who land an interview with Kim, and then are given the task of executing him.

If anyone is familiar with the plot line and seen clips, it's likely Kim's senior leadership of the secret service, said Bruce Bennett, a senior defense analyst at the Rand Corp., in an interview in late December.

Kim's regime has been shifting and consolidating during his last three years, with young Kim wary of allegiances and perceived threats to such loyalties. Kim's uncle, Jang Song Thaek, was executed in late 2013.

Said Kang, "I don't think anyone takes him lightly anymore."