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North Korea sanctions

All you need to know about China’s sanctions on North Korea

Beijing has slapped bans on some trade with its troublesome neighbour but with Pyongyang firing off yet another round of missiles on the weekend there’s debate over just how effective the curbs will be

PUBLISHED : Sunday, 27 August, 2017, 7:00pm
UPDATED : Monday, 28 August, 2017, 4:21pm

On January 1, Kim Jong-un announced to the world that North Korea was “getting close” to developing an intercontinental ballistic missile.

Seven months later, he reportedly watched as his country launched exactly such a device into the Sea of Japan. Three weeks later, it fired another.

Then on Saturday, Pyongyang sent up several short-range rockets for good measure, with one appearing to blow up immediately, according to the US military.

Just six months after moving into the White House, US President Donald Trump declared the launches “reckless and dangerous”, and called on China and the United Nations to apply tougher sanctions on North Korea to curb its nuclear programme.

In February, China announced it would ban coal imports from North Korea, in line with an earlier UN resolution.

While all of this was going on, 25-year-old Feng Yalong was busy selling seafood, mostly imported from North Korea, at the biggest fish market in Beijing. His clients, mostly chefs and restaurant owners in the Chinese capital and neighbouring Hebei province, went to him because they knew he would always have what they needed. At least, he used to.

On August 15, nine days after the UN Security Council approved tough new sanctions against North Korea, China extended its ban on imports from its reclusive neighbour to include iron, iron ore and seafood.

It was the worst possible news for Feng.

China extends ban on imports from North Korea in line with United Nations resolution

“I used to sell 1,500kg of North Korean shellfish a day,” he said. “Now, almost nothing is coming over the border. Today, we only had 250kg.”

Chinese consumers started getting a taste for North Korean seafood about two years ago, Feng said, and the market boomed.

“North Korean shellfish is much cleaner, with hardly any sand on it, so the restaurants love it,” he said, adding that he buys most of his stock through suppliers in northeastern China, close to the border with North Korea.

“But now, when the chefs and buyers come to the market looking for North Korean clams, we have to tell them we’ve hardly got any.”

So how does a ban on seafood stop Kim Jong-un from launching missiles?

The idea behind the UN sanctions and China’s blockade on selected imports is that by starving North Korea of money, its leader will be unable to continue with his nuclear weapons programme.

In 2016, Pyongyang generated US$190 million from sales of seafood to China. In the second quarter of this year, sales totaled US$68 million.

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The combined value of North Korea’s 2016 exports to China of coal, iron ore, lead ore and seafood – all of which are now banned by Beijing – was almost US$1.5 billion, or 60 per cent of its total exports. In the first half of this year, exports to China of those commodities totalled US$474.6 million.

The thinking seems to be that while some Chinese businesses, including Feng’s, might suffer as a result of the sanctions, by starving Kim Jong-un of export revenue he will be unable to fund his missile programme.

And all the experts agree that will work?

Clearly, lots of people do. The US, China and most of the rest of the world have given their support for the UN sanctions, but whether they will work remains a moot point. The problem is that people like Kim Jong-un do not like being told what to do.

Sun Xingjie, a Korean affairs expert from Jilin University, said a large proportion of North Korea’s earnings from exports was allocated to its military programmes.

“China’s ban this time will make Kim feel the pressure ... but it might also spur him on,” he said.

As Kim feels the growing threat from the international community he might be moved to hasten his nuclear programmes, as “that will be the only means he has to ensure his regime’s survival”, he said.

It’s a view shared by Dr John Park, director of the Korea Working Group at Harvard Kennedy School in the US.

“The sense of euphoria in the Kim [Jong-un] regime is pretty high in the sense that they are on the cusp of making history,” the Asian security analyst said on a recent visit to Hong Kong.

“Never has a country that is not a great power possessed a nuclear ICBM [intercontinental ballistic missile].”

Seafood vendor Feng said he had never been across the border to North Korea, but knew a little about its people.

“North Koreans are brave, and don’t hide what they are thinking,” he said. “They won’t allow themselves to be bullied.”

So is that what countries want? For China to bully North Korea?

In July, Donald Trump said he was “very disappointed” with China for not doing enough to stop North Korea’s weapons programme. On August 22, the US Treasury Department announced sanctions against five Chinese companies and one Chinese citizen that it accused of supporting North Korea’s nuclear weapons development.

Despite Beijing complying with the latest UN resolution on sanctions, one expert said he thought it would be foolhardy to suggest China was suddenly determined to punish its restive neighbour.

“Beijing’s quick response to ban North Korean coal, iron ore and seafood is not aimed at hurting Pyongyang’s economy at all,” said Hwang Jae-ho, a regional security analyst at Hankuk University of Foreign Studies in Seoul.

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“[It was] merely a gesture to Washington, showing Beijing is not happy with North Korea.”

Justin Hastings, an international relations specialist at the University of Sydney, agreed. Although Beijing said the ban on coal, seafood and iron ore would remain in place indefinitely, he questioned what long-term impact it would have on the North Korean economy.

“China will probably enforce the ban on coal, iron, and seafood in the short term, but given the prevalence of smuggling and the likelihood of China easing off on very strict enforcement after a while, my guess is that the effect on North Korea’s economy will not be 100 per cent,” he said.

“North Korea will probably be hurt in the short term, but in the long term, unless China completely changes its approach, North Korea will likely be able to adapt.”

So Trump is going about it all the wrong way?

Several top US specialists on North Korea think so. Joseph DeTrani, a former special envoy for the six-party talks with North Korea, said it was time to consider formal negotiations with Pyongyang to “get North Korea to halt all nuclear tests and missile launches and return to unconditional nuclear discussions and negotiations”.

“I’m not supportive of putting so-called pressure on China,” he said. “Economic and trade relations should not be commingled with national security issues related to North Korea.”

On August 11, China’s President Xi Jinping urged Trump to avoid “words and deeds” that could worsen tensions on the peninsula.

But China does have a special economic relationship with North Korea?

Yes it does, but things have been changing over the years.

For example, China’s electricity exports to North Korea in the second quarter of 2017 fell by 97.7 per cent from the same period in 2016, while exports of oil and gas products dropped by 56.2 per cent, according to Chinese customs data.

The North Korean export industry that’s making the most of China’s coal ban

Experts said the declines might be due in part to Pyongyang becoming more self-sufficient in producing energy rather than the impact of sanctions aimed at getting it to rein in its nuclear weapons programme.

Satellite pictures released by Nasa three years ago showed that North Korea was almost completely dark at night, compared with the bright lights over South Korea, sparking concerns about the lack of electricity in the reclusive state. However, in the second quarter of this year it actually exported more than 71.5 million kilowatt-hours of electricity to China, earning US$2.3 million.

How about trade in other commodities, like food?

China’s food exports to North Korea have increased massively over the past year, which suggests the isolated regime does still rely on its neighbour and ally.

Chinese customs data showed a surge in exports of nearly 30 items, with corn increasing 32-fold from 400 tonnes to nearly 12,724 tonnes, bananas from just over 63.4 tonnes to 1,156 tonnes and wheat powder from less than 0.6 tonnes to 7.6 tonnes.

Exports of spirits also more than quadrupled, rising from 2.1 million litres to 9.5 million litres in the second quarter, while exports of other items such as beer, confectionery, chocolate, bread and biscuits also increased.

Although the international community agreed to punish North Korea over its nuclear programme, food exports were excluded from the UN sanctions in the hope of ensuring a minimum living standard for its citizens.

Are they getting it?

That’s hard to say. North Korea’s food production – including staples such as cereals, soybeans and potatoes – in 2016 was estimated at 5.4 million tonnes, a fall of 9 per cent from 5.9 million tonnes in 2014, according to the Rome-based Food and Agriculture Organisation.

Sharp rise in Chinese food exports to North Korea as starving nation leans heavily on its only ally

The country has had an ongoing food crisis since a serious famine in the 1990s, and according to the UN, two in five of its citizens are undernourished and more than 70 per cent of them rely on food aid.

A UN report published in March said an estimated 18 million people across North Korea continued to suffer from food insecurity and malnutrition, as well as a lack of basic services.

So what is the state of North Korea’s economy?

Despite its poor relationship with many of the world’s biggest markets, the North Korean economy grew at its fastest pace in 17 years in 2016, according to figures from South Korea’s central bank. The expansion was driven by growth in the mining and energy sectors, it said.

It can be seen as a signal that North Korea has gradually become self-sufficient in the energy industry after years of economic development,” said Zhang Tuosheng, director of the Centre for Foreign Policy Studies at the China Foundation for International and Strategic Studies.

Also, Russia boosted its trade with Pyongyang by 73 per cent in the first two months of 2017, USA Today reported in June, citing Russian media sources.

Analysts said the rise in Chinese food exports might be a sign that North Korea’s economy was slowly developing.

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“The surge could be a result of greater demand from North Korea, as its economy is gradually reviving and the black market is booming, ” said Cai Jian, an expert on Sino-North Korean relations at Fudan University in Shanghai.

“It also shows the increasing dependence of Pyongyang on Beijing, as it can’t import anything freely from other countries.

Justin Hastings, however, said the increased food trade between did not necessarily mean that people’s lives had improved.

“The different types of food are going to the military and the elites in Pyongyang ... but people in the hinterlands are still going hungry. A wide variety of food being imported is thus not a sign that there is no food crisis,” he said.