[Indeed, the Reuters news agency reported that China’s central bank had issued a formal, written order to banks this week ordering them to strictly implement United Nations sanctions. It said banks had been told to turn new customers away and wind down loans with existing customers.]
By
Simon Denyer and Anna Fifield
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Chinese tourists stand on
the Tumen bridge linking China and North Korea
on Sept. 10. (AP)
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BEIJING
— China has tightened the
financial screws on North Korea, imposing and enforcing United Nations
sanctions to an unprecedented level, experts say. But Beijing remains unwilling
to completely isolate the regime and has not completely cut all financial ties.
Given that China accounts for nearly 90
percent of North Korea’s trade, its cooperation is vital to Trump’s efforts to
isolate and pressure the regime.
On Thursday, Trump said Chinese President Xi
Jinping had ordered Chinese banks to cease conducting business with North
Korean entities. Praising Xi, he called the move “very bold” and “somewhat
unexpected.”
But on Friday, China’s foreign ministry
spokesman denied Beijing had agreed to go that far.
“As far as I know, what you have mentioned
just now is not consistent with the facts,” spokesman Lu Kang told a regular
news conference in response to a question about Trump’s comments.
Experts said Chinese banks had previously
been told not to let North Korean individuals or companies open new accounts.
Indeed, the Reuters news agency reported that
China’s central bank had issued a formal, written order to banks this week
ordering them to strictly implement United Nations sanctions. It said banks had
been told to turn new customers away and wind down loans with existing
customers.
Yet the executive order issued by Trump goes
much further, threatening sanctions on any foreign financial institution that
knowingly conducts or facilitates “any significant transaction in connection
with trade with North Korea.” It also bans planes and ships from entering the
United States if they have traveled to North Korea in the past 180 days.
Those measures would go beyond sanctions
imposed by the U.N. Security Council, experts said, and appear to move in the
direction of a complete trade embargo on North Korea. That’s something that
neither China nor Russia would agree to.
“This is potentially significant,” said Bruce
Klingner at the Heritage Foundation in Washington. “Past executive orders went
after people who were committing crimes. This gives them the authority to go
after anyone who is just trading with North Korea.”
At Friday’s regular foreign ministry
briefing, Lu repeated Beijing’s familiar talking points: that China
“comprehensively and strictly” implements U.N. resolutions, but opposes unilateral
sanctions imposed outside the U.N. framework.
“China’s stance on this is clear and
consistent,” he said.
Experts said Beijing was largely honoring its
commitments and was putting pressure on Pyongyang — but would not cut the
regime’s economic lifeline.
“My impression is that China is implementing
the sanctions with unprecedented rigor and determination,” said Michael Kovrig,
senior adviser for Northeast Asia for the International Crisis Group, adding
that significant pressure had been placed on provincial and local officials in
the border region.
“But does that mean everything is being
followed through completely? Not necessarily.”
China has an 880-mile border with North
Korea, and smugglers continue to defy U.N. sanctions and law enforcement
efforts, by bringing banned goods across, experts say. Similarly, the latest
banking moves will add to pressure on the regime, but not completely isolate
it.
For one thing, Pyongyang has a long history
of working around financial sanctions, working through intermediaries and
underground banks and setting up dummy accounts and shell companies.
Ahead of Trump’s announcement, Treasury
officials had shared with their Chinese counterparts a list of 12 large banks
that continued to do business with North Korea, according to one person who had
discussions with the Chinese officials. While the Chinese were “grumpy” about
being given the list, their eyes were opened, the person said.
Yet China is insistent on another point,
reiterated by the foreign ministry’s Lu this week — that sanctions alone will
never solve the problem.
“China has been very clear: Sanctions are
meant to punish North Korea but not to corner it,” said Yanmei Xie, an expert
on bilateral relations at Gavekal Dragonomics in Beijing.
“Another unspoken purpose is to placate
Washington,” she added. “But China wants to ensure North Korea won’t be pushed
to the brink of collapse.”
Shen Dingli, deputy dean of Fudan
University’s Institute of International Studies in Shanghai, said North Korea
had resolved to continue develop its nuclear and missile program whatever
external pressure was applied.
“Sanctions, in my view, will not reverse
North Korea’s resolute determination,” he said.
Cai Jian, a Korean Peninsula studies expert
at Fudan University, added that relying on stiffer sanctions would only
intensify the confrontation and undermine the chance of dialogue.
“Sanctions are not the end, but only the
means to bring North Korea back to the negotiation table.” he said. “At the
moment, the international community has placed too much importance on sanctions
and putting pressure on. It’s not very balanced.”
On Friday, North Korean leader Kim Jong Un on
Thursday reacted angrily to Trump's remarks and actions, calling the president
a “mentally deranged U.S. dotard” and his speech at the U.N. “unprecedented
rude nonsense.”
Kim said that he was now thinking hard about
how to respond, warning he would “tame” Trump “with fire.”
Trump responded Friday by calling Kim a
“madman” whose regime would be “tested like never before.”
In another sign of rising anger on every
side, North Korea’s state KCNA news agency rebuked its Chinese counterparts for
threatening, insulting and undermining their country this week.
In a piece entitled “Rude Deed of Shameless
Media,” it criticized China’s People’s Daily and Global Times newspapers.
“The Chinese media had better watch how the
DPRK smashes the hostile forces’ arrogance and highhanded practices, rather
than kowtowing to the ignorant acts of the Trump administration,” it wrote,
referring to the country’s official name, the Democratic People’s Republic of
Korea.
“They had better mind their own businesses,
before impudently pointing an accusing finger at others.”
Chinese foreign ministry spokesman Lu
declined to comment on the “personalized” comments between Trump and Kim, and,
on the media criticism, said only that China was “objective and fair.”
He also, again, appealed for calm.
“What’s needed now is to implement the U.N.
resolutions strictly, and positively explore channels to solve problems via
talks, rather than provoking each other and adding oil to the fire.”
Fifield reported from Tokyo. Shirley Feng,
Luna Lin and Liu Yang in Beijing contributed to this report.
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