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North Korea

How Chinese imports are propping up North Korea’s nuclear goals

Donald Kirk says China may not like to see Pyongyang as a nuclear power but it is helping its economy, otherwise facing imminent collapse, by violating UN trade sanctions amid outrage over the US-South Korea THAAD deal

PUBLISHED : Wednesday, 24 August, 2016, 11:53am
UPDATED : Wednesday, 24 August, 2016, 6:48pm

China is no longer enforcing UN sanctions on North Korea while reviving often tense relations with the regime of leader Kim Jong-un. That view seems inescapable, given the record of Chinese imports from North Korea, notably coal, and cross-border trade, mainly from the Yalu River port of Dandong (丹東) to Sinuiju, one of the North’s primary economic zones.

The driving force behind China’s rush to embrace its long-time ally has to be outrage over South Korea succumbing to US pressure and agreeing to the installation of THAAD, the terminal high-altitude area defence system. Those are the billion-dollar batteries that the Americans say are needed to shoot down North Korean missiles flying 160km or more overhead.

South Korean President Park Geun-hye defends THAAD and urges Pyongyang to abandon nuclear programme

Actually, the South Koreans hesitated for some time, arguing that they really need more short- and mid-range missiles for countering North Korea’s vaunted missile system, capable of unleashing 1,000 or so any time. The South Koreans are indeed acquiring hundreds of missiles while fending off strident protests from the Chinese, as well as local foes who don’t want a THAAD battery inviting attack anywhere near them.

China’s support comes at a time when the North, to outward appearances in Pyongyang, would seem to be doing rather well. Visitors to the North Korean capital report high-rises sprouting up all over. They sense a new confidence among the elite, whom foreigners are more likely to meet, ranging from tour guides to minor officials in set-piece interviews, to carefully monitored North Koreans in public parks and upscale markets.

[North Korea’s] economy relies almost entirely on exports of raw materials

Those reports conflict, however, with the picture of what’s really happening to the country. Stephan Haggard, head of the Korea programme at the University of California, San Diego, predicts “collapse could happen quickly” – not the downfall of the regime as so often forecast but that of an economy afflicted by the steady depreciation of the currency to almost zero and the absence of funds to buy what’s needed to buttress a dilapidated economy.

Sure, “there’s a property boom in Pyongyang,” he observes, but “North Korea is having difficulty in securing imports”. Its economy relies almost entirely on exports of raw materials, one-third coal shipped mainly to China, but also to Russia, and on deals with the Chinese to mine for minerals, including gold, uranium, zinc and copper.

The country exports almost no industrial items, aside perhaps from textiles spun on old machines. Under strong international pressure, exports of missiles and other armaments to historic clients, including Iran, Syria, Yemen, Libya and Egypt, range from negligible to zero, though no one rules out transfers of the technological know-how to build them.

The shutdown by South Korea of the industrial zone at Kaesong, next to the truce village of Panmunjom on the North-South line 60km north of Seoul, marked the end of a programme from which North Korea was making about US$100 million a year. At Kaesong, 50,000 workers turned out light industrial products ranging from cosmetics to golf bags for more than 100 small and medium-sized South Korean enterprises, until the South stopped the whole show in retaliation for the North’s fourth nuclear test in January and for launching a satellite in February.

‘Pyonghattan’: where the rich kids of North Korea sip cappuccinos and flaunt their Western brand clothes

North-South relations are at such a low ebb that two-way trade of several hundred million dollars a year has almost ceased. Curiously, North Korean coal does make its way into the South, which relies on the fossil fuel for 40 per cent of its electrical power, but it comes via Russia. In other words, Russia imports coal from the North across the 17km border formed by the Tumen River as it flows into the sea, and then ships it southward.

North Korea fires ballistic missile from submarine: South Korean military source

In looking at the contrast of skyscrapers on the rise in Pyongyang and poverty everywhere else, however, the real paradox is that North Korea manages to produce ever bigger, better missiles while preparing for a fifth nuclear test. The Chinese may not like to see North Korea making strides as a nuclear power, but they’re helping the cause by violating UN sanctions, importing coal and other raw mineral wealth, and, of course, shipping in the oil and food that are needed to keep the country on life support.

Donald Kirk is the author of three books and numerous articles on Korea