North Korea nuclear crisis

China bans North Korean textile imports, to squeeze oil supply in line with UN sanctions on reclusive state

From next year, annual cap on refined petroleum to be limited to 2 million barrels, Beijing says

PUBLISHED : Saturday, 23 September, 2017, 11:34am
UPDATED : Saturday, 23 September, 2017, 9:59pm

China announced on Saturday that it would impose an immediate ban on textile imports from North Korea and limit oil exports to its neighbour from next year under UN sanctions over its nuclear and missile development.

The Ministry of Commerce also said sales of liquefied natural gas and condensate oil would be banned outright.

Exports of refined petroleum to North Korea would be limited to 2 million barrels per year effective from January 1, the ministry said. China does not disclose details of trade with its isolated neighbour, so it was not immediately clear how big the possible reduction might be.

Textiles are one of Pyongyang’s last major sources of foreign revenue following repeated rounds of United Nations sanctions under which Beijing cut off purchases of coal, iron ore, seafood and other goods.

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China accounts for some 90 per cent of North Korea’s trade, making its cooperation critical to any efforts to derail Pyongyang’s development of nuclear weapons and long-range missiles.

Petroleum exports for use in the North’s ballistic missile programme or other activities were banned by UN sanctions, the commerce ministry said.

According to the latest data released by China’s General Administration of Customs on Saturday, bilateral trade between China and North Korea went up 7.5 per cent from a year ago to US$3.6 billion for the eight months to August.

For August alone, it was worth US$604 million – up 32.5 per cent from the previous month. And for 2016 it was valued at US$5.4 billion.

China is North Korea’s most important ally but its leaders have shown increasing frustration with the Kim Jong-un regime. Although Beijing supported the latest round of UN sanctions, it is reluctant to push Pyongyang too hard because it fears the regime could collapse – and it also argues against measures that might hurt ordinary North Koreans.

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“The latest measures have come after the United States applied more pressure, but they’re still within the UN sanctions framework,” said Wang Yiwei, a professor of international relations at Renmin University of China.

Wang added that Beijing was reluctant to cut off the crude oil supply to Pyongyang because it would not want to destroy the relationship – and it would not want Russia to take over its role as North Korea’s biggest trading partner.

“Cutting off crude really would be the last resort,” he said.

Having stopped imports of coal, iron ore and seafood and told its banks to suspend or scale back financial services to North Korean clients, China was now entering a key phase on sanctions, said Chen Fengying, a senior researcher with the China Institutes of Contemporary International Relations.

“These restrictions from China – one of its few remaining trading partners – could have more of an impact on North Koreans than we’ve previously seen,” Chen said.

In the border city of Dandong, in Liaoning province, where much of the trade passes between China and North Korea, Chinese businesses have been told to play by the rules.

“We were summoned to a meeting by the local authorities after the UN sanctions [were imposed] ... They warned us that we must operate according to the laws and regulations,” according to a sales manager at a textiles company in the city.

“Some of the small trading companies here are still doing business with North Korea, but the large-scale producers have all stopped.”