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China move puts onus on US in N. Korea impasse: experts
By Ben Dooley
Beijing (AFP) Feb 21, 2017


No major impact from China coal ban, says N.Korea official
Pyongyang (AFP) Feb 21 - A North Korean state economic official sought Tuesday to play down the impact of China's shock announcement that it was suspending coal imports from the country for the rest of the year.

The move came shortly after another missile launch by Pyongyang and the assassination of its leader's half-brother in Kuala Lumpur, allegedly in a Northern plot.

It would go much further than the latest UN sanctions imposed on the country over its nuclear and missile programmes.

China is the North's sole major ally and by far its largest trading partner, with coal the biggest component of its purchases -- according to figures from Chinese Customs, Beijing last year imported more than 22 million tonnes worth nearly $1.2 billion.

It is a crucial foreign currency-earner for isolated Pyongyang.

"Of course if we can no longer export things that we used to export, it can have some impact on the companies that are directly involved in exports," Ri Sun-Chol, chief of the economic research institute of the North's Academy of Social Sciences, told AFP in an interview.

But he added: "Direct exports of natural resources have been under great restrictions. So I can't say that it would have substantial impact on the economy."

Beijing, which announced the move at the weekend, said it was in line with UN Security Council sanctions on the North. But the latest resolution only imposed a cap on coal exports rather than a complete ban, so the Chinese move appears to go further.

Overseas analysts said the impact was likely to be more significant than suggested by Ri.

Peter Hayes, executive director of the Nautilus Institute, a California-based public policy think tank, said the cut would hurt Pyongyang.

"This is punishment -- public shaming and direct and substantial imposition of cost -- but not anything close to bringing down the regime," he said in an email.

The move would "cause belt-tightening" he wrote, although there would also be "a domestic welfare gain from having more and likely cheaper coal available to meet suppressed demand".

- 'Not immune' -

In a blog post, Stephan Haggard of the Peterson Institute for International Economics said that a suspension of Chinese coal imports would test whether the North was "more vulnerable to Chinese pressure than is thought".

"North Korea is not immune from the laws of economics, and could easily experience a full-blown balance-of-payments-cum-currency crisis, with the black market value of the won plummeting rapidly and domestic prices spiraling in tandem," he wrote.

But he added that the motivations behind Beijing's move were crucial to how it would play out, saying the underlying intention was to pressure the new US administration of President Donald Trump to offer "an initiative on negotiations".

How the move will be implemented is also open to question. Beijing announced a three-week suspension of coal imports in December but still bought more than two million tonnes worth $168 million that month, according to the Customs statistics -- the third-highest monthly total of 2016.

China has long argued that it has little much less influence over its unpredictable neighbour than the US thinks. But it has become increasingly exasperated with Pyongyang, whose leader Kim Jong-Un has yet to visit Beijing five years after inheriting power from his father.

At the same time, though, China prizes stability above all else, fearing that any North Korean collapse could bring refugees streaming into its territory -- or worse, US troops stationed on its border in a unified Korea.

The UN Security Council has imposed six sets of sanctions since Pyongyang first tested an atomic device in 2006.

China's snap decision to halt North Korean coal imports -- a key economic lifeline for Pyongyang -- has a broader motive aimed at shaping Donald Trump's as yet undefined policy towards the North's rogue nuclear arms programme, experts say.

North Korea defied the world a week ago with a missile test and is suspected of orchestrating the stunning assassination a day later of supreme leader Kim Jong-Un's half-brother in Malaysia, provocative acts that followed a nuclear test in September.

China is often the target of US criticism for not doing enough to rein in its irascible neighbour.

But analysts said China's ban on North Korean coal imports for the rest of this year could be an attempt by Beijing to defuse such criticisms while nudging North Korea and the United States toward negotiations.

"If China is squeezing North Korea, it is for one purpose and one purpose only: to offer a cooperative gesture to the incoming Trump administration in return for an initiative on negotiations," Steven Haggard, of Peterson Institute for International Economics, wrote in a blog post.

Under the Obama administration, Washington pursued a policy of "strategic patience" toward North Korea in hopes that sanctions would bring Pyongyang to heel and force it to abandon its nukes.

The incoming Trump administration has stepped up the rhetoric, with the US leader saying after the February 12 missile launch that Pyongyang was a "big, big problem" and would be dealt with "very strongly".

- Onus on Trump -

China shares US concerns about Pyongyang obtaining a nuclear weapon, but prefers negotiations to sanctions, which it fears could destabilise North Korea and send a flood of refugees across their shared border.

"China's main goal in making this move is to put the onus back on Washington, fair and square to solve this problem," said Peter Hayes, director of the Nautilus Institute.

"In effect they are saying to the US: OK, we did what you wanted, we lit a fire under their feet. What are you going to do to solve the DPRK problem now?" he added, using the acronym for North Korea's official name.

The UN Security Council has imposed six sets of sanctions since Pyongyang first tested an atomic device in 2006.

But North Korea has continued to thumb its nose at the world with a series of missile launches over the years and two nuclear tests in 2016 alone.

Beijing traditionally ensures that UN sanctions against Pyongyang include humanitarian exemptions, and had continued to purchase huge amounts of North Korean coal -- over $168 million worth in December alone.

It has long resisted calls by Washington to use its economic leverage to punish North Korea for its nuclear programme, arguing it has much less influence on its unpredictable neighbour than the US thinks.

"Very few Chinese think that pain is the way to influence North Korea," said John Delury, an expert on Sino-North Korean relations at Seoul's Yonsei University.

- 'Can't dally' -

From Beijing's perspective, solving the problem will require Washington to negotiate with North Korea, whether directly or as part of a larger group.

That was a tough sell for the Obama administration, which insisted that a defiant Pyongyang take significant steps towards denuclearisation before it would consider talks.

While Trump has criticised Beijing for not doing enough to curb the North's behaviour, the coal decision suggests China "must have a sense that negotiation is under real consideration", Delury said.

China may have pressed the case for talks when Chinese foreign minister Wang Yi met his American counterpart Rex Tillerson on Friday -- just a day before the coal ban was announced -- and discussed North Korea.

China may be banking on the iconoclastic Trump's ability to shake up US policy toward the reclusive North.

Trump "wants to change his predecessor's policy ... and has the will to solve the problem, rather than simply ignore North Korea's desire" for talks, Lu Chao, a research fellow at the Liaoning Academy of Social Sciences told Chinese newspaper the Global Times.

But if Trump hopes to act on the opening China has given him, he "can't dally", Delury said.

He "has to figure out a way to move forward proactively with North Korea," he said. "You can't just sit and wait. The situation will get worse."

Waiting for the sanctions to bite, he said, "would be a big mistake. Because the North Koreans will just push right through it".

NUKEWARS
Kim's modest Macau life no protection from Pyongyang
Macau, China (AFP) Feb 17, 2017
Kim Jong-Nam's modest life in Macau was a far cry from the opulence and power enjoyed by his half-brother, the supreme leader of North Korea, but he was still seen by Pyongyang as a dangerous pretender to the ruling family throne. Friends in the Chinese gambling enclave spoke this week of a man who wined and dined in relative freedom, despite what Seoul's spy chiefs say was a "standing order ... read more

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Learn about nuclear weapons doctrine and defense at SpaceWar.com
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