The changes in the North are largely the work of the young leader, Mr. Kim. He has lifted the controls of the command economy to allow small-time trading, smuggling and “shuttle traders” who move with ease between China and his nation, economists and Chinese businesspeople say. In a New Year’s speech in January, Mr. Kim said that having developed a nuclear arsenal, he would now turn his attention to improving the lives of his people.

Inside North Korea, the markets that Mr. Kim has allowed to grow have become an essential part of everyday life, offering many people a higher standard of living, said Byung-Yeon Kim, an economist who wrote a recent book, “Unveiling the North Korean Economy.”

While this growth has bolstered popular support for the Kim family dynasty, the North Korean leadership is aware that it can also be a two-edged sword, he said. Having set itself on this road of economic improvement, North Korea must continue to find ways to expand and develop a national economy whose output is still just $20 billion — half the size of that of South Korea’s sixth-largest city, Gwangju.

“North Korea is now a place where you can enjoy a normal life compared to the 1990s,” said Mr. Kim, the economist. “Money has become very important. People there are saying if they can have money they have no reason to flee to South Korea.”