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North Korea's economic reform measures of July 2002 has recently attracted the world's attention. But just two months later North Korea secretly devised a new economic strategy of putting defense industry first and giving secondary place to light industry and agriculture. The July economic measures was designed to both reserve and reform the command economy in the currently evolving conditions outside North Korea. They may be compared with reform measures of China in 1979-1985. Like their Chinese counterpart, the measures were committed to keeping the socialist principles intact, but in fact abolished the most rigid aspects of command economy of the communist country. The party has no more commanding authority at the factory level; the planning system has been decentralized; factory regime and local government should be managed according to the logic of economic efficiency that emphasizes cost, profit, and so on; profits are reinvested in new projects; wages and prices have been based on the real economy. But since September 2002 the North Korean economy has been reoriented toward developing defense industry first. Most policy statements included the imperative of developing defense industry first, or have been legitimized by it.