The Chinese Communist Party (CCP) and the Chinese government, as well as many foreign policy experts, have been frustrated with the D.P.R.K. for a long time. But they have been reluctant to use China's trade with the North Korea to put pressure on it and risk its collapse. We constantly blame Beijing for "propping up" the Pyongyang regime. The P.R.C. is indeed the economic lifeline of North Korea, whose reckless rhetoric and behavior has isolated it from almost every other country. But China's economic ties with the D.P.R.K. consist almost entirely of trade, not aid. My UC San Diego colleague, Steph Haggard, and Marcus Noland (at the Petersen Institute of International Economics) are the real experts on the China-D.P.R.K. relationship. In their books and blog, North Korea: Witness to Transformation, they present the most accurate data we have about these economic connections, and only a small proportion consists of aid.
China does business with North Korea largely on the basis of international market prices. In March 2011, the University of California Institute on Global Conflict and Cooperation brought the first group of D.P.R.K. economic officials to the U.S. for a two week study visit on market economics and the U.S. economy. In fall 2011, I met in Pyongyang with one of the foreign trade officials who had been on that visit. He mentioned to me that he had just been in Beijing negotiating a purchase of wheat. As he described the transaction, the D.P.R.K. paid for the wheat with iron ore. And the ore's price was determined by the price China pays other large suppliers of iron ore, like Australia. The price of the wheat was also set according to international prices, i.e. the price on the Chicago Mercantile Exchange on the day of the transaction.
It's impossible to know how strictly China is enforcing the United Nations sanctions against the D.P.R.K. Is it carefully inspecting the trade at the border? And financial transactions through Chinese banks? China's international reputation would benefit if it would make its enforcement more transparent by allowing Chinese and foreign journalists to report on what is actually happening at the border and in the banks.
Ambassador Lord's response on whether China is making as forceful an effort as it could to control the D.P.R.K. certainly has the virtue of brevity -- shorter even than "Jesus wept," from the Gospel of John. And, while I do not disagree with the short and sweet approach of his answer, I also think that it is incomplete. Why? Because it does not hint at the fact that as reluctant as China has been to overtly pressure the D.P.R.K., there has been a tremendous amount change in the China-North Korea zeitgeist.
The Chinese are unsurpassed when it comes to indirection and President Xi Jinping's Boao talk was a masterpiece of just such indirection. In it, he was clearly criticizing someone, but without naming any names. An in-the-know Chinese colleague visiting from Beijing coyly asked me this morning if I thought Xi was criticizing the Americans and the Japanese ... OR "the North Koreans." When I said that I hoped it was "the North Koreans" and not us, he laughed and said, "We are really fed up with them. But, the reality is that nobody can control them."
"It suggests to me, as I've watched the ratcheting up of frustration among Chinese leaders over the last many years, that they've probably hit the 212-degree boiling point as it relates to North Korea."
After waxing elegiacally about "this balmy season with clear sky and warm coconut breezes" at Boao, Ji went observed that "our world is far from peaceful," and that "No one should be allowed to throw a region and even the whole world into chaos for selfish gains." Although such rubric would also cover the U.S.'s "preemptive warfare in Iraq" or even China's own belligerence toward Japan in the East China Sea and the Philippines and Vietnam in the South China Sea, while Xi never mentioned North Korea by name, it didn't take a lot of guessing to discern that he was targeting Pyongyang.
"While pursuing its own interests, a country should accommodate the legitimate interests of others," he concluded. As oblique as he was, this sort of indirect directness would have been unimaginable during the Hu Jintao era. But what it made it a tantalizing moment was that it suggested that the U.S. and China might actually come to find a new interface of common interest over the D.P.R.K.'s errant behavior.
When I raised this interesting prospect several weeks ago after China joined the recent U.N. sanctions regime against Pyongyang, John Delury posted, noting that Cui Tiankai, Beijing's new ambassador to Washington, almost immediately countered to say that "it's very inaccurate to say China and the United States have reached a deal on imposing sanctions on North Korea."