Abstract: Why has North Korea been unable to implement serious economic reforms like those of China? By tracing the process of economic reform in China, this paper argues that the improvement of national security, especially as a result of diplomatic normalization with the United States, was an essential precondition for successful economic reform and growth. It reduced the fear of an open‐door policy and eased domestic control as well as reallocation of resources from the military to economic development. Furthermore, diplomatic normalization with the United States lifted economic sanctions, and allowed access to global markets, foreign direct investments, and membership in major international economic organizations. However, North Korea has technically been at war with the United States for the last 66 years. Therefore, it maintains very tight control of its population and spends a substantial portion of its GDP on the military. It has also been under severe economic sanctions and does not have access to the global economy. The possibility of any meaningful economic reforms in North Korea will depend on its success in improving national security by resolving the nuclear issue and normalizing diplomatic relations with the United States.