China’s economic relationship with North Korea has been thrust once again into the spotlight, as President Trump has called upon China to use economic sanctions to rein in its neighbor, which has threatened to “blow the U.S. from the planet.” China is loath to cut off trade with North Korea for many reasons. However, the question here is what would China possibly stand to gain from cutting ties, and is the U.S. taking the wrong tack in dealing with the North Korea issue?

Trump calls on China to “solve this problem’”

In a tweet two weeks ago, President Trump stated that he was “very disappointed in China…they do nothing for us with North Korea” and called on China to “solve this problem.” In his mind, China holds the key to taking down North Korea’s missile program. This is because China is North Korea’s largest trading partner, accounting for 90% of North Korea’s total trade. Bilateral trade between China and North Korea has grown over ten times between 2000 and 2015. In addition, China is to some extent ideologically aligned with North Korea’s Communist government.

By contrast, while China has taken exception to North Korea’s nuclear testing since 2006, placing partial and sporadic sanctions on the regime over time, China does not view itself as the key to ending Kim Jong-un’s nuclear fantasy. For its part, China views its trade with North Korea and the missile threat to the U.S. as separate issues, and has urged the U.S. to engage in talks with the North Korean leader. China’s ambassador to the UN has stated that if the U.S. and North Korea do not attempt to reduce tensions and denuclearize, there is nothing that China can do anyway, especially since China has already offered to broker a deal which would call on North Korea to suspend its nuclear weapons program in return for the U.S. to end its military exercises with South Korea. The U.S. has refused to accept the deal.

What does China have to gain from cutting off trade?

China could cut off trade with North Korea, but it has little to gain by doing so. Assuming that it cut off trade entirely, North Korea would find itself without much-needed resources, goods, and income, as North Korea-China trade amounts to about 40% of North Korea’s GDP in total volume. Many workers would encounter extreme hardship and attempt to illegally migrate to China. Social and economic instability would rise, forcing the government to impose even harsher punishments in order to control the population.

What is more, China’s small and medium-sized businesses that export to North Korea would lose income, and many individuals employed in these firms would face unemployment. China would have to provide social assistance to individuals who lose their jobs, in addition to addressing the needs of illegal migrants from North Korea.

Economic sanctions as a blunt tool

There is also little evidence to support the idea that economic sanctions will force North Korea’s hand. History has revealed that trade sanctions are at best a blunt tool in the attempt to discipline a rogue nation. Sanctions affect civilians, including children, the most, while despots can usually find a way around the restrictions.

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The UN Security Council resolution, the harshest yet, places limitations on the export of coal, iron ore, lead ore, and seafood from North Korea. Work authorizations for North Koreans seeking jobs abroad have also been frozen, and new business between foreign countries and North Korea is to be put on hold.

Although China supported the UN resolution, in a bit of a role reversal, it has made the case that China must purchase North Korean exports of both seafood and coal because civilian livelihoods depend on such exports. This is probably true, and there is little evidence that these sanctions will help to bring down the missile program anyway, since past sanctions have had no effect. A big reason for this is that North Korea funds its missile development in large part through illicit means, such as selling and shipping weapons to smaller countries.

U.S. should change course in dealing with North Korea

In conclusion, pressuring China to rein in North Korea through economic sanctions doesn’t make political sense. Negotiations between the U.S. and North Korea would make more sense, as bilateral talks or as a resumption of the six party talks, held among North Korea, China, Japan, Russia, South Korea, and the United States between 2003 and 2009 on the topic of ending North Korea’s nuclear program.

The alternatives are to continue pressuring China to halt economic relations with North Korea, incurring China’s annoyance and damaging the U.S.-China relationship; to engage in war with North Korea, which is likely to be a destructive nuclear conflict; or to reduce aggression between the U.S. and North Korea. President Trump needs to start thinking of a better way to contain North Korea, as sending out angry tweets lambasting China is not working.

By Sara Hsu
Forbes

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