China has ordered the closure of North Korean companies operating inside the country within 120 days of the September 12 UN sanctions imposed on Kim Jong Un’s regime, the Commerce Ministry announced Thursday. The ministry also said Chinese joint ventures with North Koreans or North Korean companies would be closed, but didn’t provide a timeframe.
The measures, which come weeks after China’s central bank reportedly told Chinese financial institutions to strictly implement the UN sanctions against North Korea, are the most significant announced by China against North Korea since Kim’s missile and nuclear tests prompted the imposition of the harshest-ever UN sanctions against the regime, which has already been subject to eight round of UN sanctions and additional sanctions imposed by the U.S. and others in the international community. China voted in favor of the latest sanctions, which unanimously passed in the Security Council. But China finds itself in a precarious position over the North: On the one hand, it is growing increasingly annoyed at Pyongyang’s actions, which have raised global tensions and also put pressure on China itself to take action, including through the threat of U.S. sanctions on Chinese banks. On the other, it is North Korea’s largest trading partner and main political benefactor, and fears that applying too much pressure on the North—the so-called “strategic strangling” approach—could result in the collapse of Kim’s regime, leaving China encircled by U.S. allies.
Any steps China has undertaken in the past to rein in Kim, his father and his grandfather, who also ruled the country, have been complemented with measures to ease the pressure. And so it was with the latest steps: While the Commerce Ministry announced it was ordering the closure of the North Korean companies, Chinese trade numbers released Wednesday showed China had in August imported 1.6 million tons of North Korean coal valued at $130 million. The move could be a violation of the UN resolution passed in August, which barred new coal imports from the North, a major source of income for the country. China itself passed a decree in February announcing that it would stop coal imports from the North for the remainder of 2017. But it’s still unclear if the latest coal imports were only deliveries of coal purchased before the sanctions were passed.
Beijing is viewed in the West as having an outsized influence on North Korea, given the North’s economic dependence on its neighbor. But China’s relationship with Kim Jong Un is tense. One indication: Kim has never visited China to meet Xi Jinping, the Chinese leader (and, in fact, hasn’t traveled outside the country since becoming North Korea’s leader in 2011 at the age of 27).
The four-month window could give North Korea enough time to enact some sort of freeze on its missile and nuclear tests if it were inclined to make a deal to stop the closure of its businesses; there’s no immediate sign it is.This in turn could give China time to pursue multilateral diplomacy for a more permanent easing of the crisis. But there are two potential hurdles. First, North Korea is adamant about reaching its goal of fitting a nuclear warhead onto an intercontinental ballistic missile capable of reaching the U.S. mainland, and has had years of practice in evading sanctions, as well withstanding economic pain, in order to achieve that goal. As Vladimir Putin, the Russian leader, put it earlier this month, North Koreans “would rather eat grass but will not give up the [nuclear] program if they do not feel safe.” (Indeed, North Korea is estimated, by one estimate, to already possess up to 60 nuclear weapons, and American and Japanese intelligence believe it has the technical ability to fit one on a missile. Second, China may agree with the U.S. on the need for a denuclearized Korean peninsula, but it differs in the way to get there. In Beijing’s view, U.S. security assistance to South Korea and Japan are a direct threat to China; nor is Beijing happy about the regular joint U.S.-South Korea military exercises, which Washington and Seoul say are directed at the North, but Beijing sees as directed at China.
Which brings us back to Thursday’s announcement by the Chinese Commerce Ministry. The move could show the U.S. that China is indeed cracking down on North Korea—and satisfy a key demand from President Trump—and show Kim that Beijing’s patience with him is finite. But just how much impact China’s actions have will become clear soon: North Korea-watchers say another missile test could occur at any time in the next few weeks. And what then?