While the UN Security Council debates the scope and strength of a new resolution condemning North Korea's May 25, 2009 nuclear test, two main questions have come to the fore: what will China do and can sanctions work? The policy debate over the UN Security Council statement and North Korea's response to the UN Security Council action following last month's missile test provided a dress rehearsal for this round of discussions. Marcus Noland's January 2009 article in Asia Policy reviews the implementation of the 2006 UNSC Resolution 1718 condemning North Korea's first nuclear test. In that article, he concludes that North Korea "appears to have calculated correctly that the direct penalties to its foreign trade for establishing itself as a nuclear power would be modest."
I argue in my new book, China's Rise and the Two Koreas: Politics, Economics, Security, that China has assumed that its political and security leverage would grow as a result of economic interdependence with both South and North Korea, but North Korea's 2006 and 2009 nuclear and missile tests prove that China's reliance on incentives to influence North Korean behavior was a miscalculation.
Despite a dramatic increase in trade relations with North Korea and regular high-level political contacts with North Korea since 2003, China has been unable to enhance its political influence over North Korea on issues decisive to China's national security. China's trade with North Korea has increased by over 40 percent year-on-year to $2.793 billion in 2008, but China's economic influence was insufficient for North Korea to refrain from conducting a second nuclear test. Only after North Korea's 2006 nuclear test did China begin to consider economic sanctions to be a potentially effective tool for influencing North Korea.
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