Hong Kong/Seoul: China’s move to ban all coal imports from North Korea, effectively slicing the country’s exports by about half, came with a message to the US and its allies: It’s time to do a deal.

Authorities in Beijing announced on Saturday that China would halt all coal imports from Kim Jong Un’s regime from 19 February through the end of the year, in compliance with United Nations Security Council resolutions over its nuclear program. China had previously bought coal under exemptions that allowed trade for “livelihood" purposes.

At the same time, Chinese officials attending a conference in Germany blasted US moves to pressure North Korea with sanctions and military maneuvers, arguing that Kim’s regime won’t stop pushing for nuclear weapons unless it feels safe. Chinese Foreign Minister Wang Yi called for restarting talks after meeting South Korean counterpart Yun Byung-se, saying it’s time to “break the negative cycle on the nuclear issue on the peninsula."

“At this moment, the situation on the Korean Peninsula is getting increasingly complex and grim, but we shall not give up the effort to make peace happen," Wang said in a statement on Sunday.

China is becoming increasingly frustrated with Kim, whose actions are spurring the US to put a missile defence system called Thaad in South Korea—a move that also potentially threatens Beijing’s military capabilities. US President Donald Trump has called on China to get tougher on North Korea, and this month promised to deal with the country “very strongly" after its latest ballistic missile test.

‘Desperate irrationality’

Last week’s assassination of Kim’s estranged half-brother, who was protected by Chinese authorities, added to calls in Beijing’s foreign policy establishment to take stronger action, according to Shi Yongming, an associate research fellow at the foreign ministry-run China Institute of International Studies.

“The case fully exposed the desperate irrationality of the Kim regime," Shi said. “Beijing still wants to bring him to a negotiation table, and that’s where the US role lies because the collapse of the regime is right now outside China’s realistic capacity to handle."

China has backed the Kim dynasty since it took charge after the Korean War, in part to prevent a US ally from establishing a presence on its border. With the international community enforcing sanctions on North Korea after a series of nuclear tests, China now accounts for more than 90% of its total trade.

Coal sales accounted for more than 50% of North Korea’s exports to China last year, and about a fifth of its total trade, according to Yang Moo-jin, a professor at the University of North Korean Studies in Seoul. China’s ministry of commerce didn’t respond to faxed questions outside office hours.

Coal impact

“Of course they may have methods to replace the damage, but just by looking at the size of the loss, that’s a pretty big blow," Yang said.

For China, the move may have little impact: The country is the world’s biggest producer and consumer of the fuel, and North Korea accounts for less than 10% of its total coal imports. The restrictions also come as China’s peak winter demand season begins winding down and regulators weigh reinstating domestic mining output limits to avoid the reemergence of a supply glut.

Whether it will bring Kim’s regime to the negotiating table is also unclear. North Korea has accelerated its development of nuclear bombs and ballistic missiles since 2009, when it walked away from six-party talks involving the US, South Korea, China, Russia and Japan.

Nuclear talks

Fu Ying, who chairs the foreign affairs committee of China’s legislature and was a vice foreign minister until 2013, said on Saturday that US policy is only making things worse.

“You have to realize—without talking with them, you will only drive them in the wrong direction further," she said at a security forum in Germany while on stage with South Korea’s Yun and US Senator Dan Sullivan, an Alaska Republican.

Sullivan called on China to use its leverage over North Korea “in a more constructive way," while South Korea’s foreign minister ruled out talks anytime soon.

“We are dealing with a country which has much more dangerous capacity than 10 years ago, 20 years ago," he said. “Simply talking about dialogue, coming back to the conference table, means nothing."

Breaking point

In Yun’s talks with his Chinese counterpart, Wang urged South Korea to resume talks and reiterated China’s opposition to the deployment of Thaad.

In its first month, Trump’s administration said it would deploy the missile defence system this year in South Korea and back Japan “100%" in moves to deter North Korea. It has also signalled a willingness to work with China after sharp criticism on the campaign trail, with Trump telling President Xi Jinping that the US would respect the One-China policy.

While China has previously resisted calls by the US to apply greater pressure on Kim’s regime, North Korea is increasingly becoming a strategic liability, according to Zhou Qi, director of the National Strategy Institute at Tsinghua University in Beijing.

“What we’re seeing now is Beijing is showing a new willingness to bring the North to near the breaking point," she said. “There is still some room to squeeze the regime. But of course, it’s a risky card to play." Bloomberg

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