Sanctions push North Korea closer to China

By Yi Whan-woo

The North Korean economy has become more reliant on China than ever as a result of U.N. Security Council (UNSC) latest that have cut off Pyongyang’s trade routes with other countries, analysts said Wednesday.

Some, however, said the greater reliance reflects Pyongyang’s effort to open and expand business channels with Beijing, its biggest ally, which does not necessarily mean that trade volume is increasing.

Citing anonymous sources, analysts said “official” trading activities between the two countries have rather diminished after the international community pressed China to carry out UNSC Resolution 2270 imposed March 2.

“With no other trading partners to interact with, China has virtually become the only country from which North Korea can still earn hard currency,” said Park Won-gon, an international relations professor at Handong University.

“The decrease in trade further pushes North Korea to become more desperate in diversifying its businesses in China, both legal and illegal, as much as it can. This is helping Beijing strengthen its power concerning the fate of the cash-strapped regime.”

An Chan-il, head of the World Institute for North Korea Studies, agreed.

He said that certain business operations under the Kim Jong-un regime were closed recently in line with the global efforts to prevent North Korea’s use of money earned abroad for its nuclear weapons program.

The suspended programs include the shutdown of the inter-Korean industrial park in Gaeseong, North Korea, the suspension of the Rajin-Khasan logistics project involving the two Koreas and Russia, closures of North Korea’s state-run restaurants overseas, and Poland’s ban on issuing visas for North Korea’s “slave workers.”

“I heard a number of North Korean factory workers, manual laborers and other laborers formerly involved in those programs are moving to China to find jobs,” An said.

The Kim regime reportedly proposed to the authorities of Liaoning Province, a region bordering North Korea, to jointly build a highway linking Dandong, China and Gaeseong, as one of its new businesses.

It also has allowed Chinese fishing boats to work in its territorial waters in return for money or a portion of their catch.

“Expanding businesses will not supplement the decrease in trade volume with China but it will deepen North Koreans’ psychological dependence on China,” said Shin Sung-won, director-general at the Korea National Diplomatic Academy’s Department of International Economy and Trade Studies.

The analysts were divided over whether Beijing will have more leverage on Pyongyang.

“China now theoretically owns the whole North Korean market and it will capitalize on the UNSC sanctions to fully control the internationally-isolated state,” An said.

Shin disagreed by saying, “China is perplexed.”

“The North Korean dependence on China is not helpful because Pyongyang-Beijing trade is going nowhere,” he said.

Park speculated that China is in a dilemma to balance its level of pressure on North Korea to fulfill two tasks: Implement the UNSC Resolution 2270 faithfully, while ensuring that the Kim Jong-un regime does not collapse to keep refugees from flocking to the Chinese border.

Concerning security on the Korean Peninsula, An said North Korea will “be more negligent” in resuming the six party talks aimed at ending its nuclear program.

“It is likely North Korea will cling to China more, and turn hostile toward South Korea and the United States to continue to heighten tension on the peninsula for the time being,” he said.