Upon coming into office, the Trump Administration quickly came to the correct conclusion that the Obama Administration’s policy of “strategic patience” toward North Korea was really “strategic neglect.” Secretary of State Tillerson in Seoul March 17 stated it succinctly: “Let me be very clear: the policy of strategic patience has ended.” Strategic patience entirely failed; it allowed Pyongyang years of breathing room to develop its nuclear weapon and missile programs with the clear objective of deploying nuclear ICBMs capable of striking the U.S. homeland.
While direct Western sanctions on North Korea seem to be reaching the limit of their effectiveness at this point, given highly circumscribed economic interaction with the Hermit Kingdom, China’s economic ties to North Korea are powerful. Recognizing this reality, the Administration appears to be attempting to subcontract out the North Korea problem to Beijing. As President Donald Trump tweeted, “I have great confidence that China will properly deal with North Korea. If they are unable to do so, the U.S., with its allies, will. U.S.A.!” The subtext is that if China doesn’t take care of the North Korea problem, the U.S. will – through means of its own choosing.
Accordingly, Tillerson told the Chinese in March that the U.S. was considering significant new sanctions against Chinese banks and companies conducting business with North Korea. The Chinese appear to have received the message loudly and clearly, and are suspending coal imports from the North, a significant blow to Pyongyang – as long as this is sustained.
While these are steps in the right direction, we need to recognize that there are severe limits on China’s willingness to accommodate U.S. concerns, given conflicting U.S. and Chinese economic and strategic interests on the Korean Peninsula. In fact, some of the most effective options available to the U.S. would have a direct, negative bearing on China and no doubt prove problematic for Sino-U.S. relations.
On the economic side, the Chinese have shown little willingness to constrain Chinese companies and banks from dealing with North Korea. Obviously, proceeding with the U.S. threat to sanction such Chinese entities would engender great Sino-US friction. The U.S. could focus on those entities that directly enable North Korea’s nuclear and missile programs, as it did when the Obama Administration last September sanctioned the Dandong Hongxiang Industrial Development Co. Ltd. for supporting North Korea’s nuclear program. Alternatively, the U.S. could go more broadly and sanction those that have anything to do with North Korea, as it did in 2005 by freezing $24 million in Macao-based Banco Delta Asia under Section 311 of the USA Patriot Act.
Such sanctions would be entirely justifiable, and have been demonstrated to have the potential for making a significant impact on North Korea (the Banco Delta Asia sanctions triggered a frantic North Korean reaction). The think tank C4ADS’ recent report demonstrates that a major swath of China-North Korea trade is run by a small number of interconnected Chinese companies that can be identified and targeted. Sanctions would deter some Chinese companies and banks from pursuing or continuing relationships with North Korea, and would help put the squeeze on Pyongyang. That said, we can safely assume that China would consider responding with punitive actions against the U.S. at a time and place of its choosing. Given the broad, deep bilateral U.S.-China relationship, the field for Chinese retaliation would be wide open, complicating U.S. decision-making.
Similarly, as it explores effective means of pressuring North Korea, the U.S. could intensify diplomacy and publicity aimed at cutting off the North Korean practice of exploiting exported laborers, which is thought to be earning the North several hundred million dollars a year in foreign currency (with some estimates running much higher). Reportedly, North Korea has exported about 50,000-60,000 laborers overseas through bilateral contracts with foreign countries, where they mainly toil in construction, logging, and mining to earn foreign exchange for the North. These North Korean workers are reportedly kept in isolated communities, tightly supervised by North Korean officials, and experience virtual forced labor conditions for 12 to 16 hours per day. Most of their wages are appropriated by the North Korean government (See the Database Center for North Korean Human Rights report “Human Rights and North Korea’s Overseas Laborers: Dilemmas and Policy Challenges,” by Yoon Yeosang and Lee Seung-ju, and the State Department’s Trafficking in Persons report for details.)
Here again, U.S. targeting of this source of foreign currency could provoke Beijing. China is one of North Korea’s major clients for these laborers, with what some analysts estimate as about 19,000 North Korean workers. Russia is another major user; others have included Kuwait, Mongolia, Nigeria, Poland, Qatar and the United Arab Emirates. Beijing would likely be embarrassed and annoyed at having its role in this practice exposed and disrupted – especially if the U.S. sanctioned officials and institutions in host countries, including China, involved in this exploitation. Here again, Chinese interests in North Korea clash with U.S. objectives and complicate the U.S. ability to take tough and effective U.S. action against Pyongyang.
On the political side of the equation, U.S. and Chinese strategic objectives are a study in contrasts. The ideal Korean Peninsula endgame scenario for the U.S. is a reunited Korean Peninsula, reunified from the South up, along the lines of West Germany’s absorption of the East. This scenario would maintain a strong U.S.-South Korean alliance, with U.S. forces remaining in Korea, and some possibly redeployed to the North – if not immediately, then eventually.
In contrast, the Chinese would gag at the prospect of seeing U.S. troops deployed along the Yalu River, or the destabilizing scenario of a united, revanchist Korea interacting with the millions of ethnic Koreans across the border in China. Beijing would view peninsular reunification from South to North as a stunning strategic setback. The ideal Chinese endgame scenario is one in which the Korean peninsula remains divided, the North Korean regime is stable and reasonably responsive to China, North Korea continues to absorb inordinate amounts of time and attention from the U.S., Japan, and South Korea and complicates their strategic thinking, and the U.S. is constrained from contemplating regime change or military action vis-à-vis North Korea.
China might be pleased with a denuclearized Korean Peninsula – if it didn’t have to give anything up in order to achieve it. However, this would still render North Korea vulnerable to the United States. Therefore, Chinese leaders may be thinking more in terms of applying their doctrine of proportional nuclear deterrence to the U.S.-North Korea situation. Accordingly, possession by the North of nuclear ICBMs capable of striking the U.S. might actually hold advantages for China, as a means of deterring the U.S. and impeding its decision-making calculus with regard to the North. Certainly the U.S. would feel more constrained from taking military action against North Korea, and the credibility of the U.S. even threatening military action would be corroded. In fact, under any scenario in which the survival of the North Korean regime were threatened, it could brandish its ICBM arsenal and give the U.S. pause.
China no doubt viewed the Obama strategic patience policy toward North Korea’s nuclear and missile programs favorably, and might well have been content if the next administration had followed this policy to its logical conclusion – a North Korea with nuclear weapons capable of striking the continental United States. Now that the Trump Administration is correctly making clear that this would be unacceptable, Beijing recognizes that we may be approaching a tipping point – and that all options are on the table for the U.S., even as North Korea accelerates its nuclear and missile programs.
In the short term, we can predict that China will continue to exert somewhat greater pressure on North Korea to constrain it, in response to the Trump Administration’s urgings. That said, the degree of Chinese pressure exerted on the North appears to have proven largely ineffective. Given that Chinese strategic interests on the Korean Peninsula differ so greatly from those of the U.S., under present circumstances it seems unlikely that the Chinese will take matters far enough to bring Pyongyang’s nuclear and missile programs to a halt – let alone reverse them and convince North Korea to disarm. The U.S. must seek new means of spurring China to act, either through negotiating a grand bargain encompassing broader Sino-U.S. relations; pursuing intensified multilateral cooperation with Japan, South Korea, and other regional partners, possibly including regional missile defense; or taking another hard look at applying selective sanctions on Chinese entities enabling North Korea.
