China has a huge stake in a peaceful transformation of North Korea, but it has so far shown little inclination to do something about it. Is this about to Change?

Is China finally getting serious about reining in its neighbour North Korea? The news that Beijing agreed to new sanctions against North Korea after it claimed to have tested a hydrogen bomb has been greeted as a “diplomatic shift” – and a vote on the draft UN Security Council Resolution prepared by China and the US is expected later this week.

The agreement is welcome news indeed. The only problem is that we have been there before. Between 2006 and now, the UNSC has passed four sanctions resolutions against North Korea. Yet neither of them resulted in China using its economic leverage over Pyongyang – and we should not hold our breath that it will do so this time around.

That North Korea’s regime can be inconvenienced was demonstrated by U.S. sanctions against Banco Delta Asia with its North Korean accounts in Macao. Now, there are reports that China is clamping down on cross-border trade, and that one of China’s principal banks, International and Commercial Bank of China, has closed North Korean accounts. Is China showing Pyongyang some of its torture instruments?

Why today looks similar to three years ago

Perhaps – but let’s not forget the very similar reports three years ago. Back then, the closure of some bank accounts did nothing to curtail the Pyongyang regime’s conspicuous consumption, nor its pursuit of prestige projects such as the ski resort in Masikryong, which was built with extensive Chinese participation (presumably in violation of the UNSC sanctions regime).

To be fair, even China does not always seem to be in control of its recalcitrant and unpredictable neighbour. Its banking system may not be advanced enough to catch up with North Korea’s worldwide illicit financial dealings. Under the new UN draft resolution, China would face the difficult task of cutting off those North Korean imports of coal, iron and iron ore whose proceeds are used to fund its nuclear and missile programs instead of the population's livelihood – a determination that will be almost impossible to make.

Yet China could arguably do more. Despite all its bluster, the regime in Pyongyang has only been able to survive with China’s support. North Korea conducts more than 70 percent of its foreign trade with China, and it relies on China for its supply of fuel and electricity. The draft resolution’s proposed ban on the export of aviation fuel to North Korea would hit the country’s military hard if it were strictly implemented by China. Since 2009, China has been the only foreign government providing substantial amounts of food aid to impoverished North Korea, after the US, South Korea and Japan had scaled back similar aid programs in the wake of the on-going dispute over Pyongyang’s nuclear program.

China’s generous support was initially owed to Beijing’s desire to shore up a communist client state and to create a buffer against further US encroachment on the Korean peninsula. As the sense communist solidarity eroded, North Korea learnt to blackmail its neighbour with the threat of regional destabilisation. If Beijing were to cut its support for North Korea, a regime collapse might trigger waves of refugees and turmoil along its own borders.

The implicit threat to China’s own stability was the reason that China’s leaders sat back as Pyongyang used its military and nuclear activities to blackmail the rest of the world. The population of Seoul is within reach of North Korean artillery and short-range missiles that could cause a bloodbath even without weapons of mass destruction. Tokyo, and potentially even the US West coast may soon be in range of North Korean nuclear weapons.

North Korea has turned into a liability for Beijing

With each new escalation, North Korea is turning into an increasing liability for Beijing. Condoning the reckless behaviour of its neighbour is not in line with China’s attempts to be seen as a responsible global power. And the military balances on the Korean peninsula could shift to its disadvantage the more threatened South Korea feels and reaches out to the US. North Korea’s nuclear program is the main reason for US plans to install a missile defence system in South Korea – a plan that China vehemently opposes.

If China wants to shape the security architecture in North East Asia, it has to be part of the solution for the North Korean problem. In the nuclear negotiations with North Korea, China has reluctantly taken on a more prominent role in recent years. After the collapse of a bilaterally negotiated agreement between Washington and Pyongyang (the Geneva Framework Agreement of 1994), Beijing assumed the chair in the new Six-Party Talks that included the two Koreas, China and the US as well as Russia and Japan. The group completed six negotiating rounds between 2003 and 2007, but the talks are currently suspended.

Summing up, the leadership role in efforts to dismantle the North Korean nuclear weapons program has effectively shifted from Washington to Beijing. But despite its prominent position, China has not lived up to its implicit responsibility, consistently giving priority to avoiding any serious upheaval in the DPRK over its avowed desire to denuclearise the Korean peninsula. Beijing did whatever it took (and then some) to keep the DPRK afloat, hoping perhaps for North Korean flexibility on the nuclear issue in return. Yet the regime in Pyongyang probably never had any serious intention to give up its best trump card to ensure its survival.

China can no longer ignore the risks

But can China still afford to ignore the risks that the regime in Pyongyang represents for regional stability and global order? There is always the danger that North Korea’s young leader and his entourage will miscalculate and set off a disastrous war. Also, with or without China’s support, a collapse of this brittle regime which can detonate nuclear weapons but fails to provide a livelihood for its own population, could still happen any day.

Perhaps Beijing is concerned not to lose a friend, as Shi Yinhong, a veteran observer of Chinese foreign policy, argues. Yet it hardly seems a good idea for Beijing to leave the future of East Asia’s regional security in the hands of friends like these. Instead, it needs to develop a North Korea policy that includes but also goes beyond imposing sanctions.

Beijing has to find a way to convey credible and effective messages that cause Kim Jong-un to change course. Otherwise, the only way to remove the risks looming over East Asia and the world from Pyongyang’s decrepit totalitarian system is a change of regime in Pyongyang.

The way out of this conundrum clearly is not easy, yet Beijing of all outside powers is best placed to engage Pyongyang with sufficient sternness and flexibility. It therefore should take the lead in assembling a broad coalition, in the UNSC and elsewhere, to deal with Pyongyang properly. So far, however, Beijing has not shown much inclination to grasp that nettle.