Pyongyang must come to its sensesIn one of the most decisive actions underscoring a change of attitude by the new leadership of China toward its traditional ally North Korea, Beijing had its state-run Bank of China close accounts and business transactions with the Foreign Trade Bank of North Korea, Pyongyang’s official foreign currency channel. The unprecedented act from China has not been included in the new set of international sanctions the United Nations Security Council slapped on North Korea following its third nuclear test.
Instead, it was part of concerted efforts with Washington to force North Korea to abandon its nuclear weapons programs. The U.S. Treasury Department in March separately imposed sanctions against the Foreign Trade Bank and asked China to make a similar move. Beijing was finally doing what Pyongyang feared most - leaving its side and cutting off its economic and financial lifeline.
The Foreign Trade Bank is in charge of the external commerce and business transactions led by the Pyongyang regime. It remains unclear how much of North Korea’s economy the government-led projects primarily run by the party and military take up. It is estimated that China accounts for more than 90 percent of North Korea’s external annual trade turnover of $6-7 billion. Some of the settlements have been done through the Foreign Trade Bank and the Bank of China. The latest move is, therefore, likely to take an effective toll on North Korea’s fund-raising.
It’s uncertain whether Bank of China’s action is part of Beijing’s new policy toward Pyongyang. The bank may have simply yielded to the pressure from Washington that presented evidence of illegal financial transactions between the two banks. Intentional or not, Beijing has joined in the international financial sanctions. North Korea can no longer entirely depend on its sole and primary patron.
North Korea must realize that it has brought this on itself. It will be further secluded and squeezed if it does not stop military provocations against South Korea, the United States and Japan. The elites as well as the common residents will now have to suffer. South Korea, the U.S. and the rest of the international community have promised they will give all the necessary help the country needs if it opens up and abandons weapons programs. We hope North Korea will finally come to its senses.