China’s relations with North Korea are complex with a variety of bad choices and suboptimal solutions. It could be argued that the actor that has lost most in the recent tensions is China. It has often been argued that China should do more, above all by U.S. President Trump. However, what are the options and restraints China faces in its relations with North Korea? This short article does not mean to engage in the debate on whether China or the U.S. bears greater responsibility for not resolving the current situation, but is rather taking stock of the possibilities and limitations China has to contribute to the resolution of the current crisis on the Korean Peninsula.
Sino-North Korean relations are not what they used to be. The old “lips and teeth” relationship is long gone with almost no senior-level meetings and rampant criticism of North Korea on Chinese social media. But even as the Chinese government, as well as the vast majority of academics and the young generation, has grown increasingly frustrated with North Korea, there remain pro-North Korean elements, not least among the old generation, in the border areas of Northeast China, and within the armed forces. However, this number is likely dwindling with growing concern over North Korea’s perceived recklessness and disregard of its own people. Changes in perception of North Korea aside, this is not what primarily drives Chinese policy towards North Korea or for that matter a concern that North Korea will turn against China militarily. Rather it is the realpolitik in the region and the potential geopolitical, security and economic implications of continued tensions on the Korean Peninsula.
The Chinese government’s stated intention of wanting a denuclearized North Korea is sincere. This is not primarily because of the threat to global security as much as how a nuclear North Korea would, according to Chinese perceptions, strengthen the military alliance between U.S. and its regional allies (South Korea and Japan) and thereby consolidate its presence in the region. Indeed, the alleged U.S. “encirclement” of China is an ever-present fear in Beijing. The prospect of more strategic weapons in the region, such as the missile defense system THAAD, bombers, but also potentially a U.S. nuclear arsenal, or even igniting an arms race, would force China’s military onto the back foot seeking to react. As recent developments show, this concern is not hypothetical. According to a recent poll by Gallup Korea, 6 out of 10 South Koreas are today supportive of reintroducing U.S. nuclear weapons to South Korea that were withdrawn in 1991 as a unilateral disarmament initiative by then President George Bush. Trump’s recent remarks that South Korea, Japan and even Taiwan should have their own nuclear weapons has certainly set off alarm bells in Beijing. Such a scenario of militarization most likely creates tense political, and potentially economic, relations between China and the U.S. and its allies, and diminishes China’s geopolitical impact.
Conversely, and however unlikely in the present context, China has everything to gain from a successful nuclear deal between the United States and North Korea, which could result in the scaling down of the joint military exercises or even that the U.S. would reduce its military presence in the region, not least in terms of anti-missile defense.
China’s Leverage
China today accounts for some 90 per cent of the legal economy of North Korea, amounting to approximately 2 billion U.S. dollars. Coming under increasing pressure to use its economic leverage to bring Pyongyang to heel, Beijing is faced with a number of considerations. Its economic relations with North Korea are miniscule compared to its much larger trading relations with the U.S. ($462 billion), South Korea ($131 billion), and Japan ($152 billion). In other words, it can afford to cut off economic relations with North Korea. The potential prospect of U.S. secondary sanctions on Chinese banks and other entities that have dealings with North Korea, as has been threatened by the Trump administration, has also necessitated that China cooperate more in the sanctions regime. Chinese President Xi Jinping does not want to jeopardize China’s economy, with its trade dependency on the U.S., especially at a time when he is facing possible re-election at the upcoming Party Congress in October. This is not to say that China does not have a red-line, however, if the U.S. should too punitively go after Chinese companies and state-owned enterprises.
Given the considerations above, as well as believing in sending a strong message to Pyongyang, Beijing has signed up to the latest round latest round of UN Security Council sanctions on September 11, which put limits on oil exports to North Korea, ban textile imports, as well as revokes new work permits for North Korean laborers abroad, among other measures. Significantly, however, reflecting the demands of China and Russia, there were no increased sanctions against Kim Jung Un directly or a full interruption of oil imports which Washington had originally lobbied for. Therefore, while China has indeed adopted a harder position on North Korea, it is also pursuing a fine line by making sure that sanctions do not constitute a tipping point that could destabilize the regime and which still keeps the door open for dialogue. China has proposed, as one example, a parallel freeze as a basis for negotiations but with little success. In fact, the recent sanctions should be seen in the context that North Korea had stockpiled energy reserves in the case of such an eventuality and has shown tentative signs of economic reforms, that counter the impact of the sanctions. Additionally, there is a great deal of illegal trade that is unaccounted for, both at the Chinese border and through Vladivostok. It is unlikely that China would have acceded to punitive sanctions if it had calculated that such would seriously endanger the regime.
This leads to the argument that while a nuclear North Korea is not in China’s interest, it is not yet prepared to fully wield its economic leverage over Pyongyang for fear of destabilizing the regime, not to mention a military solution that China opposes. Any potential regime collapse would be very unpredictable, potentially sparking military conflict, large refugee flows, or, even worse, an implosion of North Korea that could lead to unification under the South Korean flag and, in turn, see U.S. forces on the border with China. Indeed, Beijing has voiced concerns that North Korea could be an “Asian Libya” if pushed over the cliff with no functional government structures to fill the void, as well as running the risk of conventional and nuclear weapons proliferation.
It would instead be in the long-term interest of China to resolve the North Korean nuclear issue, improve relations with South Korea, and decrease American presence in the region. Its current strategy, however, is a case of muddling through, as it is for all other actors. The fact is there are no perfect solutions. Acting more assertively towards North Korea engenders a number of risks, as does tacitly allowing North Korea’s nuclear program to develop unchecked. China is thus seeking to maintain the political status quo in Pyongyang while taking measures to encourage it to denuclearize – a balancing act which is simply not feasible today.
Niklas Swanström, Executive Director of the Institute for Security Development Policy, Stockholm
