In a U.S. election cycle where it often seems that nobody agrees on anything, the presidential front-runners appear to share one article of faith: China is the key to fixing North Korea.
Now come reports that China and the United States are making progress on a U.N. resolution to tighten sanctions on North Korea. On Wednesday, diplomats at the U.N. Security Council said the two permanent members of the body have reached an agreement on the draft resolution that could be presented to the full council for approval within days.
Last week, President Obama signed legislation targeting banks and trading companies — many of them Chinese — linked to North Korea’s weapons programs, illicit activities and human rights abuses.
The United States pressures China. China pressures North Korea. Case closed.
If only it were that simple.
A U.S.-China deal — if it goes forward — would be good news for the Obama administration, a diplomatic ray of light amid the gloom in the region over disputes in the South China Sea. It could also hurt North Korean leader Kim Jong Un and his cronies, experts say.
But another, tougher round of sanctions is far from the cure-all that some politicians imagine. China and the United States remain at odds over what the new rules are supposed to achieve.
“Everyone is talking about sanctions,” said Stephan Haggard, a North Korea expert at the University of California at San Diego. “But we have to ask: Sanctions to what end?”
Asking China to act on North Korea makes sense. Beijing and Pyongyang are old friends — frenemies, really — and it is no secret that North Korea’s economy is sustained in large part by trade across the Chinese border.
The latest U.S. proposal calls for a more aggressive targeting of the firms that keep Kim in business, including “secondary sanctions” against companies that do business with those firms.
The strategy is designed to hit Kim “where it hurts,” said Sung-Yoon Lee, a Korea specialist at Tufts University’s Fletcher School of Law and Diplomacy. “The North Korean people are uniquely isolated and cut off, but the regime is not. It depends on cash flow, depends on international financial transactions and depends on the dollar system to feed the elite.”
This approach has worked before. Nearly a decade ago, by sanctioning Banco Delta Asia, a Macau-based institution that handled North Korean money, the United States cut off Pyongyang’s cash supply — and brought North Korea back to nuclear negotiations. (Those talks later fell apart.)
Tong Zhao, an expert on nuclear disarmament at Beijing’s Carnegie-Tsinghua Center for Global Policy, said the measures being formulated are not just about finance, but also are an effort by the United States to “put more pressure on China.”
Beijing has long opposed unilateral sanctions and is wary of any move that might hurt its economy or cause instability across the border. At the same time, it is increasingly frustrated by North Korea and worried about a U.S.-South Korea missile defense plan. That makes Beijing more receptive to sanctions that “bite” — or so Washington hopes.
After Obama signed the new sanctions legislation last week, a South Korean newspaper reported that ICBC, a major Chinese bank, was curbing its business in North Korea, according to a branch near the border. The report was cited as evidence of a potential shift in China’s strategy.
But calls to several banks in Dandong, a key hub at the China-North Korea border, suggest that the policy direction is far from clear. Reached by phone, workers at Bank of China, China Merchants Bank and Bank of Dandong branches said they no longer did business with North Korea. An employee at China Construction Bank said it was doing business with North Korea but would not go into details.
North Korea watchers warned against seeing the ICBC anecdote, or any branch’s statement, as proof of a real push to stop cross-border transactions. “We’ve seen this movie before: China starts to enforce some sanctions, and then a month later they loosen up again,” said Bonnie Glaser, a senior adviser for Asia at the Center for Strategic and International Studies in Washington.
“The Chinese might be looking for some things to do to ease the pressure that the U.S. is putting on them,” she said.
Although China says it supports U.N. Security Council resolutions on North Korea, it has a bad enforcement record, according to U.N. and independent reporting.
The North Korean regime has deep connections to various sectors of China’s economy. A real or rumored crackdown at the big banks is unlikely to prevent smaller banks from moving money across the border, let alone curb the trade in resources, experts said.
“It’s inconvenient as hell for North Koreans to move cash across borders, but this relationship is way bigger than banking,” said Adam Cathcart, who studies China and North Korea at the University of Leeds in Britain.
Reached by telephone, a man who gave his name as Mr. Han, who works at a Chinese company that imports minerals from North Korea, dismissed the idea of tighter sanctions with a profanity. He said he moves his money through local banks or in cash without any problem. “I can basically do anything,” he said.
Another mineral trader, who identified himself only as Mr. Cai, said that U.S. sanctions would not hurt him but that U.N. measures could make a dent if China chose to enforce them.
Both said business is down because of a slump in commodity prices, not as a result of politics.
Haggard, the North Korea expert at the University of California at San Diego, said the economic slump, plus sanctions, could increase pressure on Pyongyang. But that does not mean a lasting solution is in sight, he said.
Even with China on board, there is no quick fix.
Liu Liu, Gu Jinglu and Xu Jing contributed to this report.