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Trade with North Korea: What sanctions?

March 12, 2016

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Trade with North Korea: What sanctions?

Zahid ImranbyZahid Imran
March 12, 2016
in World Digest
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The Economist


 

  • On the border between China and North Korea it is business as usual

ONLY a few hundred metres separate the small but lively Chinese city of Dandong from Sinuiju, its drab North Korean counterpart on the opposite bank of the Yalu River. There are two iron-truss bridges in the city centre, built by Japanese who were then occupying the area: one in 1911 and the other in 1943. Both were badly damaged by American bombers during the Korean war of the 1950s. A surviving stretch of the older one, renamed “Broken Bridge”, is now a tourist attraction (on the right of the picture). The newer one (on the left) still carries road and rail traffic across the river, a vital conduit for North Korea’s trade with China.
In theory, that may now be disrupted by sweeping sanctions imposed by the UN, with China’s backing, on March 2nd. They ban trade in luxury items and call for (potentially time-consuming and costly) inspections of cargo going into, and coming out of, North Korea. China is by far the biggest trading partner of the North; if these sanctions are being applied rigorously, it should be evident in Dandong, which handles an estimated 70% of the trade between the two countries.
It is not, yet. The first reported case of sanctions being enforced involved the impounding of a North Korean cargo ship at a commercial port in the Philippines a few hours after the UN voted to impose fresh sanctions in response to tests by North Korea earlier this year of a nuclear device and a long-range ballistic missile (dressed up as a rocket carrying a satellite into space). But there has been no report of trade between North Korea and China being affected.
On March 9th your correspondent saw a sporadic flow of lorries travelling in both directions across the bridge. Locals said the volume looked normal. A foreign observer familiar with the area says it may be that the details of the new enforcement regime “have not yet trickled down to the person wearing the hat at the border”. Traders in the city say they have yet to feel the impact of sanctions. At a riverfront shop selling North Korean alcohol, cigarettes and ginseng, the owner shows no concern. He says the goods he sells will not be affected (he is right that they are not banned, unlike watches, snowmobiles and jet-skis).
It would certainly be a bother for traders if Chinese customs officials were to inspect every shipment for items prohibited by the UN, including anything that could be used to help the country’s nuclear and missile programmes. But it is far from clear that that is what China intends. The latest UN sanctions allow for less rigorous inspections in the case of goods needed for humanitarian purposes. China could argue that much of its trade with North Korea falls in that category: it is the main supplier of food and oil. Since the latest sanctions were imposed, Chinese officials have continued to sound lukewarm about them. China’s foreign minister, Wang Yi, said this week that “blind faith” in sanctions was not a “responsible” approach.
South Korean press reports have said, however, that China had already begun restricting some North Korean transactions at Chinese banks and barring North Korean vessels at Chinese ports by late February, before the latest sanctions. China’s agreement to the tougher regime is certainly a sign of its frustration with its dangerously capricious neighbour, whose leader, Kim Jong Un, said this week that North Korea had developed miniaturised nuclear warheads that could be mounted on ballistic missiles. He even threatened a nuclear attack in response to large-scale South Korean and American military exercises now under way. Some observers are sceptical that the North has acquired such technology. Most discount its bellicose bombast.
If he wants to curry favour with China, Mr Kim could try holding up his end of a deal for building a new bridge in Dandong. Gleaming but still idle, it was built by China at a cost of more than $325m. China has publicly blamed North Korean foot-dragging: in North Korea, the bridge ends in an empty field, connected to nothing.

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