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China's NKorea Trade Sanctions Only a Shell Game

Image: China's NKorea Trade Sanctions Only a Shell Game
China's Ambassador to the U.N. Liu Jieyi, address the Security Council, following a resolution vote to sanction North Korea, Friday June 2, 2017 at U.N. headquarters in New york, N.Y. (Bebeto Matthews/AP)

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Monday, 31 Jul 2017 08:37 AM Current | Bio | Archive

Accelerated North Korean missile and atomic weapons provocations have prompted high stakes diplomatic and strategic high wire balancing encounters between the U.S. and China. Both sides recognize that Kim Jung-un’s rogue regime presents menacing dangers to the national security of each . . . potentials for direct nuclear attacks on the U.S. mainland, and as a result of preemptive intervention, unwelcome floods of North Korean refugees into China.

Beijing and Washington, D.C. have both officially acknowledged the importance of applying stronger international economic business and trade sanctions to reduce Pyongyang’s capacity and motivation to make trouble.

China, by far North Korea’s leading trade partner, holds heavy leverage in such matters, an influence that Xi Jinping’s government has clearly failed to fully exercise.

America can no longer delay independent unilateral actions to curb this existential threat.

Last Friday, North Korea launched its second intercontinental ballistic missile (ICBM).

This occurred within just three weeks following what Kim Jung-un referred to as a "package of gifts" on U.S. Independence Day. Expert assessments indicate that the latest missile, which landed off the coast of Japan, had an estimated range capable of reaching the U.S. West Coast and beyond . . . possibly even Chicago.

Pyongyang’s state media claimed that the earlier July 4 launch test verified the atmospheric re-entry capability of a prospective nuclear warhead. The Washington Post has recently reported that the Pentagon's Defense Intelligence Agency assessments indicate "North Korea will be able to field a nuclear-capable ICBM by next year, earlier than previously thought."

All of this is developing at a time when both China and the U.S. are seeking stronger, mutually beneficial economic trade relationships. While China doesn’t want to contribute to a North Korean economic collapse which would destabilize their interests in the Korean Peninsula, they also don’t want to squelch beneficial U.S. trade opportunities. Examples include the recent Sino-American beef deal, along with access to U.S. exports of soybeans, aircraft and other goods and services.

Not surprisingly, China, which constitutes 90 percent of North Korea’s trade market, is playing it both ways. Whereas they are purchasing much less North Korean coal, despite U.S. and international pressures, they are actually trading with them even more.

President Trump recently reported a "nearly 40 percent" increase in China-North Korea trade in the first three months of this year. He tweeted "So much for China working with us  — but we had to give it a try!"

CNN Money has assessed that the China and North Korea trade exchange was worth $2.6 billion in first half of 2017 . . . up 10 percent over same period last year. Meanwhile, Chinese coal imports (North Korea’s biggest source of currency) were down by 75 percent. (China pledged in February to ban all North Korean coal imports.)

The American Enterprise Institute’s Asian Studies Director Daniel Blumenthal and resident scholar Derek Scissors refer to China’s circumvention of meaningful international trade sanctions against North Korea as a "shell game." 

Writing in a July 18 Wall Street Journal Op/Ed piece, they observe, "It’s a sham to pick out individual Chinese enterprises for sanctions if they are independent of the government. The Communist party can control the economy. Many Chinese companies are simply interchangeable tools, used by the party at different times for different purposes."

Accordingly, when no longer useful they often cease their activities or disappear entirely, only to be replaced by others.

Blumenthal and Scissors argue that "Beijing should not be allowed to effectively determine who is subjected to sanctions for North Korean links, as if they are rogue entities that have nothing to do with the party state." The international community should instead target huge state-owned sisters of the entities doing business with North Korea, those with sizable international business and assets.

Rather than just going after the Bank of Dandong, for example, major penalties should be targeted on the behemoth Industrial and Commercial Bank of China.

Recognizing the futility of any continuing expectations that Beijing will police its own nationals, the Trump administration will likely ratchet up heat on both China and North Korea through more severe U.S. unilateral sanctions.

Acting Assistant Secretary of State for its East Asian Bureau, Susan Thornton, told a Senate Foreign Affairs subcommittee that the Treasury Department will impose additional penalties on Chinese entities that violate existing U.N. sanctions on Kim Jong-un’s regime.

Thornton also told the Wall Street Journal, "We’re definitely in the process of trying to elevate that pressure and change the calculus."

There is also strong congressional support for more aggressive sanctions on North Korea within a broader bill that also targets Russia and Iran.

As Blumenthal and Scissors correctly point out, American leadership must now choose whether to risk escalating economic tensions with China, or be willing to live (and potentially die) with a tyrannical nuclear North Korea.

That decision, if wrong, might be our nation’s last.

Larry Bell is an endowed professor of space architecture at the University of Houston where he founded the Sasakawa International Center for Space Architecture (SICSA) and the graduate program in space architecture. He is the author of "Scared Witless: Prophets and Profits of Climate Doom" (2015) and "Climate of Corruption: Politics and Power Behind the Global Warming Hoax" (2012). Read more of his reports — Click Here Now.

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American leadership must now choose whether to risk escalating economic tensions with China, or be willing to live with a tyrannical nuclear North Korea. That decision, if wrong, might be our nation’s last.
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Monday, 31 Jul 2017 08:37 AM
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