From New York to Dandong: Maximum Pressure

By | July 23, 2018 | No Comments

There is a widely shared assumption in Washington DC that if the ongoing US-DPRK dialogue doesn’t bring about denuclearization in relatively short order, American foreign policy can simply be rotated on its axis and redirected toward the “maximum pressure” policy that has been missing in action since late 2017.

Serious doubts over the efficacy of that policy still linger in any case, but those have been amply articulated elsewhere. More importantly for us here; the idea of a return to maximum pressure is a fantasy.

Centering oneself on the Chinese-North Korean border, where Sino-NK spends much of its collective intellectual energy, insightful questions about American leverage in the region present themselves, and give the lie to this blithe Beltway illation. Developments along the border and further into the interior of both China and North Korea appear to be aligning to scuttle any American impetus to keep the semblance of economic pressure on the DPRK.

On July 20, US Secretary of State Mike Pompeo was in New York pressing China and Russia to enforce sanctions on North Korea. His remarks eventually made their way down to the border level:

The countries of the Security Council are united on the need for final, fully verified denuclearization of North Korea, as agreed to by Chairman Kim. Strict enforcement of sanctions is critical to our achieving this goal.

Members of the UN Security Council, and by extension all UN member-states, have unanimously agreed to fully enforce sanctions on North Korea, and we expect them to continue to honor those commitments. When sanctions are not enforced, the prospects for the successful denuclearization are diminished. Right now, North Korea is illegally smuggling petroleum products into the country at a level that far exceeds the quotas established by the United Nations. […]

We must also crack down on other forms of sanctions evasion, including the smuggling of coal by sea, smuggling by overland borders, and the presence of North Korean guest workers in certain countries.

Since the DPRK is not being supplied covertly from South Korea, and China is the foremost destination for North Korean guest workers, it seems fairly clear where these comments are being directed. On the guest workers issue, Pompeo had more heavy ammunition in the form of a new report, and some high-profile journalism on related matters. Uriminzokkiri responded to the State Department report with something approaching anger.

The White House also released a renewed North Korean Human Rights Act. Under more conventional circumstances this might amount to some leverage of sorts, however temporary, requiring at the very least the grinding of gears and gnashing of teeth by North Korea’s Ministry of Foreign Affairs or other outlets, and some nominal defense by bodies like China’s Foreign Ministry.

But Pompeo has a very difficult brief to fulfill, and things seem to be moving away from his intended targets.

Not knowing whether Pompeo took this up in his sideline meetings with Russian counterparts in Helsinki is, in a sense, not relevant here; clearly the Americans are not getting satisfaction from Russia on the issue of North Korean workers abroad, albeit that the Russians are not — yet — breaking any rules. Even South Korea is looking for modest exemptions to the sanctions regime in order to fulfil promises made in Panmunjom this past April.

As for China, it can now be seen that the country is hardly the sole enabler of relative North Korean freedom — in the sense of having options open for aid, trade, and external investment. Nevertheless, China has been sending signals in the economic realm which have been rather bullish from the North Korean standpoint, and accordingly, Sino-North Korean economic discussions in the Chinese press have ticked upward.

Finding specific instances of a softening of actual enforcement of sanctions on the part of the Chinese is difficult work. In a piece published in Tokyo, House of Representatives member Keiji Eida criticized Pompeo for being strung along by the North Koreans, but also praised the Secretary of State for trying to counteract the fact that sanctions pressure was slipping. The Japanese politician cited the “overflowing” markets of Liaoning in terms of North Korean sea cucumbers and ginseng — commodities that will not themselves pay for standing armies, but are still important in the context of North Korea’s grossly distorted economy — without citing a specific source.

Fortunately Chinese open-source media has provided more than enough fodder to see where things appear to be going.

At an event to commemorate the Sino-North Korean alliance anniversary at the Chinese embassy in Pyongyang earlier this month, North Korea’s Vice-minister of Foreign Trade, Ku Bon-tae (구본태), attended, along with the heads of various Chinese capital enterprises in North Korea. While the presence of Chinese capitalists at such an event should not be surprising in the least, there are other reasons to take note of this meeting, which was mirrored by similar gatherings in Shenyang, Dandong, Beijing, and a city whose manufactures have recently born the brunt of criticism from Kim Jong-un himself, Chongjin. As one analysis put it:

Ku Bon-tae’s presence [at the meetings with Chinese counterparts] is a clear indicator of ongoing coordination and Sino-North Korean progress on looking towards the dissolution of sanctions. That is to say, Ku was reportedly just back from a four-day visit to Beijing whose purpose had been to coordinate on light industry and textile cooperation with China, in apparent anticipation of a lightening of sanctions in the near term. The visit itself was acknowledged without any further details by the PRC Foreign Ministry on 2 July, along an admonition not to disrupt the current “positive momentum” on the Korean peninsula.

So the Chinese presentation to the United States has been one of preparing for relaxing sanctions, and the discussions inside of Liaoning are along those lines. As one of the most important think-tank voices on North Korea in Shenyang, Lu Chao, put it in early July in a brief interview with the authoritative newspaper Cankao Xiaoxi, “China has the capacity to cooperate to help North Korea fulfill its strategic choice to develop its economy.”

On 17 July, Liaoning province held a small but important media event in Shenyang for economic officials to discuss foreign trade goals and outlook.  Reporters attended from Japan, Russia, Mongolia, and South Korea. No North Koreans attended, but the ambience seemed to be favorable. At the event, Wang Enbin (王恩濱), the vice-chair of foreign trade in Liaoning, said something like the following, as relayed by Kyodo in Chinese:

Regarding joint China-DPRK economic project, such as the joint development of the North Korean Special Economic Zone, which had been stopped due to North Korea’s nuclear development, it is necessary to promote preparations internally so that once the UN Security Council sanctions are relaxed or lifted, these projects can be restarted, and expect future progress.

[T]he sanctions against the DPRK have affected the economy of Liaoning Province […] there is a lot of room for cooperation in the future in the fields of mineral resource development, tourism and trade in North Korea.

Whether or not the DPRK is in or out of the “One Belt, One Road” discussion, there will be ample Chinese investors in projects in North Korea, including Zhejiang businessmen in Dandong. The more salient framework for Chinese investment in North Korea at the moment seems to be the brewing US-China trade war, which also was raised at the event in Shenyang.

However, not all of the data have been bullish.

The day after the Shenyang press conference, and two days before Pompeo arrived in New York to deliver a fairly predictable message about sanctions enforcement, Chinese police reportedly arrested more than ten entrepreneurs in Dandong with North Korea dealings, and nabbed a few more in Dalian and Yanji, respectively, for irregularities in their dealings in North Korea’s port of Rason.

What happens in border areas should continue to interest us all. Over are the days when following the movements of China’s cheerleader, Jang Song-taek, represented a serviceable analytical approach to North Korea analysis. Today, especially since Kim Jong-un met Xi Jinping, it is the day-to-day grind of relations along the border — not the machinations of a Pyongyang elite — that best indicate the direction of travel.

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