On Sept. 18, China’s central bank instructed its subsidiaries to cease new loans to North Korea. China’s move is significant, but not stunning. The largest Chinese banks began distancing themselves from North Korea months ago. Chinese officials have long warned Chinese citizens to steer away from doing business with the North Koreans because of the increased risk that sanctions could torpedo economic agreements and leave Chinese investors with losses. The Chinese central bank’s announcement does not require an immediate halt to loans previously agreed with North Korea, nor does it indicate that Chinese banks will cease acting as North Korea’s gateway to the international financial system. China is doing more, but still not enough to “solve” the problem in line with US hopes, which means Washington will return to the old problem of choosing a Plan B from a list of terrible alternatives.
Meanwhile, the Chinese government continues to take the reasonable-sounding position that the crisis should be solved by negotiations between Washington and Pyongyang. China benefits from appearing to be the responsible peacemaker while Pyongyang fires missiles over Japan and US President Donald Trump draws criticism for his blunt threat during his Sept. 19 speech to the United Nations to “totally destroy North Korea.”
Some of the criticism of Trump is unwarranted. Many chose to interpret his statement as denoting an annihilation of the entire population of North Korea, but an alternative interpretation is the destruction of North Korea as a political or legal entity, meaning it would become part of a united Korea under the government in Seoul. Trump could have stated this with more nuance, but by now we should understand that Trump isn’t a nuance guy. In any case, as North Korea tries to intimidate other countries by threatening to nuke them, it will be necessary for US officials to repeatedly remind Pyongyang that the United States is prepared to retaliate robustly, possibly with US nuclear weapons.
Although the North Korea crisis is a serious problem for China, the Xi government is playing it well enough that this particular issue will not impede Xi’s capacity to get what he wants from the leadership reshuffle that will take place in connection with the 19th Chinese Communist Party Congress planned for October. Indeed, Xi gains from the absence of a trade war with the United States that might otherwise be breaking out if the Trump Administration was not delaying the pursuit of its grievances regarding the US-China economic relationship in the hope of gaining greater Chinese cooperation on the North Korea crisis, which has become Washington’s highest-priority foreign policy problem.
China’s move does indicate a small victory in Washington’s campaign to persuade Beijing to apply stronger pressure on the Kim regime. This, however, conforms to a familiar and rather unproductive pattern. First, North Korea dramatically demonstrates progress in its effort to develop a long-range nuclear-capable missile. Second, Washington responds by threatening military action and demanding the Chinese do more to solve the problem. Third, Beijing makes a tangible gesture of increased pressure on Pyongyang to mollify the Americans. The cycle repeats when the North Koreans carry out another bomb or missile test.
While Beijing wants the Democratic People’s Republic of Korea (DPRK) to denuclearize and is demonstrably angry and frustrated with its leader Kim Jong Un, the bottom line is that China would rather live with a nuclear North Korea than see the collapse of the regime and its likely consequences: turmoil on its border and possible military conflict in the short term, and a united, US-allied Korea in the long-term.
The question that arises here is whether the Trump administration believes it is on a path to fulfilling the president-elect’s pledge that North Korean acquisition of a nuclear missile that could strike the US homeland “won’t happen.”
If we follow the current path, it will happen.
The latest crank of the economic vise squeezing North Korea will not prevent the Kim regime from getting the nuclear missile capability it wants, for three reasons.
First, the regime is too close to success. The incentives point to the Kim regime making a final sprint for the tape, not capitulating at the last moment. Second, the latest sanctions do not directly or immediately prevent missile or bomb development. A sudden lack of high-performance rocket fuel might halt the program, but a phase-out of loans from Chinese banks will not. Even the mythical total cutoff of oil supplies from China probably would not stop the North Koreans at this stage. They could buy time by drawing on their strategic reserves and restricting usage to essential military operations, and they could make up part of the shortfall by increasing their imports of oil from other countries such as Russia.
Finally, Pyongyang has demonstrated it is deeply committed to getting this capability and therefore willing to suffer increased hardship to complete it. The North Korean government sees its nuclear missile program not as the cause, but as the solution to the problems of economic sanctions and US threats.
At what point does Pyongyang win the current round and the United States lose? When Americans believe the DPRK has a reasonable chance of causing a nuclear explosion over a US city. Then the issue will change from preventing the DPRK from acquiring the capability to preventing the DPRK from using or leveraging the capability. There is some evidence the North Koreans believe this will transform their relationship with Washington, an expectation that motivates their drive for recognition as a nuclear weapons state.
The range of expert opinion varies, but some analysts at the cautious end of the range are concluding that North Korea has probably achieved a nuclear delivery capability. The latest tests show the potential of a DPRK missile to fly far enough to reach the North American continent. They have been testing missile nosecones for survivable re-entry at least since March 2016. They claim to have achieved miniaturization of a warhead, which outsiders cannot confirm. They have not demonstrated accuracy, but the large yield evident in the sixth nuclear test explosion means they could potentially destroy a city even without a direct hit. Pyongyang will likely carry out more tests to show off additional progress in DPRK missile development, but it could stop now and still enjoy considerable leverage. With each test, the benefits to the US side of a possible “freeze” agreement diminish.
Realistically, at this point only a military intervention by either the United States or China or a willingness by Washington to drop its preconditions and negotiate with Pyongyang has a chance of diverting the outcome to which Pyongyang seems committed.
Denny Roy (firstname.lastname@example.org) is senior fellow at the East West Center in Honolulu.
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