China buckles under pressure

In the realm of foreign affairs, everything starts with words and ends with a document. Every word in international agreements and treaties carries meaning. Advanced countries like the United States and Japan place their most reliable and elite diplomats as heads of treaty departments. The draft of new United Nations Security Council sanctions on North Korea turned out to be much stronger than expected.

By cutting off the country’s financial transactions and primary trade in mineral resources, the Security Council pulled out all stops to make sure no money can flow into the pockets of Pyongyang’s elite or fund weapons programs. Cargo going in and out of North Korea will be subject to mandatory inspections, and supplies of aviation fuel will be prohibited. The United Nations has never imposed such broad and strong sanctions.

Gen. Kim Yong-chol, the senior North Korean official in charge of inter-Korean affairs, declared the sanctions won’t hurt his country one bit. He may have spoken too soon. Once sanctions are adopted, they become fixed international rules. Iraq and Libya became economic wrecks a few years into sanctions. The ban on exports of coal, iron, titanium and rare earth minerals that bring much-needed hard currency to the Pyongyang regime will be a fatal blow to North Korean leader Kim Jong-un. The ban on aviation fuel and conventional trade will demoralize the North Korean military. North Korea won’t have any fuel or money to carry out another provocation.

The unprecedentedly stringent set of sanctions came about as a result of a quid pro quo deal between Washington and Beijing. In return for agreeing to strong sanctions - that rely entirely on the participation of China, North Korea’s primary trade partner and fuel supplier - Beijing made clear it did not want placement of the Terminal High Altitude Area Defense antimissile system in Korea, which it fears could work as a surveillance system over China.

The sanctions will be effective only if China wants them to be. Previous sanctions did not touch the major economic aid China provides to North Korea, such as supplying all its fuel and allowing North Koreans to work in China. The earnings of 50,000 North Korean laborers are the only steady revenue for North Korea. If Beijing keeps making exceptions to international sanctions on the pretext that the livelihoods of common North Koreans could be ruined, sanctions will never have any effect.

Beijing, however, appears to be more willing than ever to cooperate. It could use the fuel card to pressure North Korea to return to the six-party denuclearization talks. The price North Korea will have to pay for any additional nuclear or missile test has shot up. If it steps across the line once again, Beijing could turn to the last resort of freezing oil supplies and closing off the border to prevent North Koreans from entering. China also exposed its weakness. It turned out to be overly sensitive about a U.S. missile system that could enlarge U.S. presence in the region.

China is losing confidence in its own economy. The world’s second-largest economy, which looked like it was on a solid path to overtaking the U.S. economy, is now looking at a potential dangerous hard-landing. Chinese authorities are most nervous about their economy’s continuing growth. Their power over the colossal nation depends on a sound economy.

China is grappling with overcapacity, bad debts and volatile stock and currency markets. Authorities appear to be losing their grip, as a series of actions failed to stabilize the financial markets or stimulate the economy. The central bank is in a bind. If it raises the base interest rate, a slowing economy could get weaker, while a cut could accelerate capital flight and send its currency crashing. If the U.S. Federal Reserve raises its key rate sharply, China could also be hit hard.

Repeated assurance from Chinese leaders that they have the means and capacity to address current challenges only suggests how nervy they have become. If Pyongyang senses Beijing’s anxieties, it won’t be able to go on with its unruly ways. Although North Korea remains strategically important, China cannot continue defending the maverick state.

The North Korean economy can not run on its own. Sanctions could deal a fatal blow. The squeeze on North Korea could worsen if the Chinese economy runs into a deeper slowdown.

Washington gave Beijing the ultimatum of punishing Pyongyang or accepting its radar in the South, and it worked. Washington has gained an upper hand over Beijing to use it to tame Pyongyang.

JoongAng Ilbo, Feb. 29, Page 30

The author is a senior editorial writer of the JoongAng Ilbo.

by Lee Chul-ho