Trade between Beijing, Pyongyang jumps despite international sanctions



By Kim Jae-kyoung



SINGAPORE ― China's ambivalent attitude to North Korea has exacerbated nuclear issues, leaving a series of sanctions against Pyongyang ineffective and allowing the Kim Jong-un regime to continue with its provocative actions.



China officially agreed to UN sanctions last March following the North's fourth nuclear test, and is now in talks with the U.S. and other countries to seek harsher sanctions after a fifth test last month.



However, latest data show that Chinese President Xi Jinping and his government have turned a blind eye to bilateral trade between the two countries, indicating that China has no intention of punishing the regime led by young, unpredictable leader.



According to the latest Chinese customs data, exports to North Korea, excluding non-reported crude oil shipments, reached $337 million in August, up 41 percent from a year ago. The amount, the highest total since December 2014, has brought bilateral trade back to near record levels seen in 2013.



China's imports from the North also jumped 16 percent to $286 million during the same period. Anthracite coal, at $113 million, provided the biggest boost, despite specific UN prohibitions on buying North Korean coal.



William Brown, a professor at the Georgetown University School of Foreign Service, said that any hopes that last spring's harshest-ever UN sanctions would cripple North Korea's economy won't be realized.



"The absence of any obvious crisis in China-North Korea trade might easily be seen as Beijing disregarding economic pressure tactics on North Korea or as retaliation for this summer's Seoul-Washington agreement to install the THAAD missile defense in South Korea," he said.



"Either or both are possible, but it's important to recognize that Chinese interpretation of the UN sanctions are very different from U.S. official views, which may be rather exaggerated."



Brown pointed out that even worse, the strong China-North Korea trade data stand in contrast to recently dismal global Chinese trade patterns.



According to him, exports to South Korea through August, for example, fell 6 percent from year-to-date levels in 2015, and imports from South Korea fell nearly 10 percent, hurting South Korean GDP growth.



Worldwide, Chinese exports year-to-date also were down 6 percent and imports were down 9 percent.



"It's very clear that Beijing is standing by its assertion that economic sanctions will and should not apply to the broad economy," Brown said.



"And I expect some in Pyongyang like the sanctions since they help the central government maintain control over crucial materials such as coal, and thus electric power," he added, expecting that China's moves are unlikely to change Pyongyang's drive to build a usable nuclear force.



China wants ‘status quo'



Experts took the August data as a sign that China does not want to jeopardize the status quo on the Korean Peninsula.



"China is expected to muddle through and continue the current policy to sustain the North Korean regime so far," Katy Oh, a researcher at the Institute for Defense Analysis in the United States, said.



Katharine H.S. Moon, a senior fellow at the Center for East Asia Policy Studies at the Brookings Institution, echoed the view, saying, "Even though China agreed to support US-led stringent sanctions, I believe China never intended to pull the rug from under the North Korean regime.



"Beijing is displeased with Pyongyang's nuclear ambitions and bombast, but Beijing worries more about instability in North Korea and maintaining stability in the Northeast China border region with North Korea."



What is more important is that Beijing in its view cannot afford politically to alienate Pyongyang.



"It is also a fact that Beijing cannot control the fast-changing adaptation of Chinese and North Korea business interactions," she said.



"Since the sanctions, the traders have made the detection of commercial activities more difficult by increasing cash-only transactions and other less traceable forms of funding the commerce," she added. "There are a lot of vested interests among the Chinese who trade with North Korea."



Analysts expect that China won't change its contradictory policy unless it feels a direct threat from North Korea's provocations.



They pointed out that Beijing will continue to balance international pressure for containing Pyongyang's nuclear development with domestic interest in maintaining border stability and preventing any kind of chaos within North Korea.



"Unless North Korea's actions directly threaten Chinese security or economic interests, it's futile for the U.S., South Korea and Japan to place their hopes on China to deliver a more cooperative North Korea," Moon said.



"It's wishful thinking, especially with THAAD which is a loss of leverage for the Americans and South Koreans."



