Hongxiang head arrested for illegal trade with Pyongyang

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Hongxiang head arrested for illegal trade with Pyongyang

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Ma Xiaohong

After it was reported the Dandong-based Liaoning Hongxiang Group may have made illegal trade deals with North Korea, it has also been revealed that the company’s chairwoman, Ma Xiaohong, has been arrested by Chinese authorities and is under investigation for alleged economic crimes.

The Hongxiang Group in northeastern China has six affiliated companies, including the industrial machinery and equipment wholesaler Dandong Hongxiang Industrial Development Group, which is suspected to have shipped to North Korea so-called “dual-use” materials, such as aluminum oxide and aluminum ingots, which can have both civilian and nuclear-weapons development uses.

“As for the individual company you mentioned,” said Lu Kang, spokesman of the Chinese Foreign Ministry, on Tuesday, “relevant authorities of China are investigating its misdoings, including economic crimes, in accordance with law.”

This was in response to a reporters’ question on U.S.-Chinese cooperation in targeting companies suspected of aiding the North’s nuclear program, and while he did not elaborate on the specifics of Hongxiang Group’s transgressions, the spokesman said, “China has made relentless efforts to move ahead with the denuclearization of the Korean Peninsula.”

He added Beijing has “earnestly implemented UN Security Council Resolution 2270 due international obligations on export control of nonproliferation, and these efforts are there for all to see.”

UNSC Resolution 2270, implemented in March, imposed the toughest-ever sanctions on North Korea for its fourth nuclear test in January.

Liaoning provincial government authorities announced last week that the Hongxiang Group was suspected of “serious economic crimes,” without specifying further.

A group of some 10 trade-related executives in Dandong was reported by Korean media on Wednesday to have been arrested in early August. Ma, 44, made her beginnings as an employee at a shopping mall and since 2000, has built up her trading conglomerate, which has openly traded heavily with North Korea.

A report by the Seoul-based Asan Institute for Policy Studies and the Washington-based Center for Advanced Defense Studies (C4ADS) stated that Dandong Hongxiang engaged in $532 million worth of trade with North Korea from 2011 to 2015.

After the North’s fifth nuclear test earlier this month, U.S. senators urged the Obama administration to expand U.S. sanctions against North Korea, as well as entities that assist the regime’s nuclear weapons program, namely Chinese ones.

Thus, there is interest to see if China’s probe into Hongxiang is a means to prevent secondary boycotts, or sanctions on a third country entity, which could negatively affect Chinese enterprises, amid mounting pressure to punish Pyongyang for its fifth nuclear test on Sept. 9.

U.S. President Barack Obama and Chinese Premier Li Keqiang agreed to improve cooperation on the North Korea issue in bilateral talks held in New York on Monday.

BY SARAH KIM [kim.sarah@joongang.co.kr]

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