Chinese State Banks Are Cracking Down On North Korean Business
China is starting to put real pressure on North Korea as the rogue regime steps up its ballistic and nuclear weapons game.
Chinese state-run banks are starting to suspend transactions for accounts held by North Koreans, making it difficult for the two countries to do business, reports Japan’s Kyodo News Agency. North Koreans can still withdraw money, but they cannot make deposits or remittances or open new accounts.
The banks include Bank of China, China Construction Bank and Agricultural Bank of China along the border. “This is being influenced by international sanctions against North Korea,” one bank employee told reporters.
North Korea has conducted a string of provocative missile tests, as well as a surprisingly powerful nuclear test. Since the start of the year, the North has launched short-, medium-, intermediate-, and long-range missiles for strikes throughout the region and across parts, if not most, of the continental U.S. In the wake of North Korea’s second intercontinental ballistic missile test, the United Nations Security Council approved tough sanctions on the North, and China agreed to take the necessary steps to curb Pyongyang’s ambitions.
In response to last week’s test of a possible thermonuclear weapon, the U.S. and its allies are pushing for tougher U.N. sanctions on North Korea.
China accounts for roughly 90 percent of North Korean trade, and for years, China has helped North Korea skirt international sanctions. But relations between Beijing and Pyongyang have significantly deteriorated as North Korea has become more of a liability than an asset.
China suspended North Korean coal imports early this year; Chinese exports of petroleum products to North Korea have fallen dramatically; Chinese factories are prohibiting North Korean labor imports; Chinese authorities are supposedly sealing some border crossings; and now, state banks are suspending transactions for North Koreans.
While China appears to be responding to the requirements of U.N. sanctions, it is also possible that China is concerned about punitive actions by the The Trump administration. which has been consistently pushing China to do more to rein in its nuclear neighbor.
The U.S. Department of the Treasury identified a Chinese bank — the Bank of Dandong — as a money launderer for North Korea and sanctioned a handful of Chinese firms and nationals for conducting illegal business with North Korea. Recently, the Trump administration threatened to cut trade ties with any country that engaged in illicit cooperation with Pyongyang if the U.N. failed to approve the severe new sanctions in the latest draft resolution.
China has shown its support for tougher action.
“Given the new developments on the Korean peninsula, China agrees that the U.N. Security Council should make a further response and take necessary measures,” Chinese Foreign Minister Wang Yi said recently without elaborating.
While relations between Pyongyang and Beijing have frayed, Beijing’s ties to Washington, Seoul, and Tokyo are also fraught with friction. China’s strategic interests on the Korean Peninsula and those of the U.S. and its allies are very different. China has been an unreliable partner in international efforts to halt North Korea’s pursuit of weapons of mass destruction and the means to deliver them to distant shores.
Another issue is that North Korea’s weapons program may be beyond sanctions and economic pressure at this point, and de-nuclearization may now be impossible. Chinese pressure, assuming that is what is happening, may be too little too late.
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