The China–North Korea Relationship

China is North Korea’s biggest trade partner and arguably has the most leverage on Kim Jong-un’s regime. But while Beijing appears willing to condemn its neighbor’s nuclear developments, analysts say its cautious policies remain focused on stability.

Last updated September 27, 2017

Chinese Communist Party official Liu Yunshan with North Korean leader Kim Jong-un in Pyongyang. Kyodo via Reuters
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Introduction

China is North Korea’s most important trading partner and main source of food and energy. It has helped sustain Kim Jong-un’s regime, and has historically opposed harsh international sanctions on North Korea in the hope of avoiding regime collapse and a refugee influx across their 870-mile border. Pyongyang’s nuclear tests and ongoing missile launches have complicated its relationship with Beijing, which has continued to advocate for the resumption of the Six Party Talks, the multilateral framework aimed at denuclearizing North Korea. A purge of top North Korean officials since its young leader came to power and the assassination of Kim Jong-nam, Kim Jong-un’s exiled half- brother, in Malaysia also spurred concern from China about the stability and direction of North Korean leadership. Yet China’s policies have done little to deter its neighbor’s nuclear ambitions.

Alliance Under Stress

China’s support for North Korea dates back to the Korean War (1950–1953), when its troops flooded the Korean Peninsula to aid its northern ally. Since the war, China has lent political and economic backing to North Korea’s leaders: Kim Il-sung (estimated 1948–1994), Kim Jong-il (roughly 1994–2011), and Kim Jong-un (2011–). But strains in the relationship began to surface when Pyongyang tested a nuclear weapon in October 2006 and Beijing supported UN Security Council Resolution 1718, which imposed sanctions on Pyongyang. With this resolution and subsequent ones (UNSC Resolutions 1874 [PDF], 2094 [PDF], 2270, 2321[PDF], 2371, and 2375), Beijing signaled a shift in tone from diplomacy to punishment. After North Korea’s most recent nuclear test in September 2017, China called on North Korea “to stop taking wrong actions that exacerbate the situation and are not in its own interest.” Still, Beijing continues to have significant economic ties with Pyongyang.

The two enjoy at best a cold relationship that is likely to worsen.
Jeffrey Bader, Brookings Institution

Separately, China has stymied international punitive action against North Korea over human rights violations. China criticized a February 2014 UN report that detailed human rights abuses in North Korea, including torture, forced starvation, and crimes against humanity, and attempted to block UN Security Council sessions held in December 2014 and 2015 on the country’s human rights status.

Even China’s punitive steps have been restrained. Beijing only agreed to UN Resolution 1718 after revisions removed requirements for tough economic sanctions beyond those targeting luxury goods. More recently, China backed UN Resolution 2375 in September 2017 after some of the measures in a draft version were dropped, including an oil embargo and the authorization to use force when ships do not comply with mandated inspections. Western officials and experts doubt how committed China is to implementing even the more limited new trade restrictions.

China-North Korea trade has also steadily increased. Bilateral trade increased tenfold between 2000 and 2015, peaking in 2014 at $6.86 billion, according to figures from the Seoul-based Korea Trade-Investment Promotion Agency.

Yet Beijing may be poised to take some limited measures to squeeze Pyongyang economically. China’s commerce ministry temporarily suspended coal imports from North Korea in February 2017. State-owned oil giant China National Petroleum Corporation suspended fuel sales to North Korea in June 2017, citing concerns that North Korea would fail to pay the company. As of September 2017, media reports cited efforts by Chinese banks, including China Construction Bank, Bank of China, and the Agricultural Bank of China, to restrict the financial activities of North Korean individuals and businesses. The measures include closing some accounts, freezing others, and banning the opening of new ones. Some regional experts say such actions may suggest that the Chinese regime is losing patience with Pyongyang, while others say that these shifts by Beijing are merely tactical.

Aid and Trade for Pyongyang

China provides North Korea with most of its food and energy supplies and accounts for more than 90 percent of North Korea’s total trade volume. In the first half of 2017, China-North Korea trade totaled $2.6 billion, up 10 percent from the same period in 2016.

Bilateral trade between China and North Korea has steadily increased. Korea Trade-Investment Promotion Agency (KOTRA)

In September 2015, the two countries opened a bulk cargo and container shipping route to boost North Korea’s export of coal to China and China established a high-speed rail route between the Chinese border city of Dandong and Shenyang, the provincial capital of China’s northeastern Liaoning province. In October 2015, the Guomenwan border trade zone opened in Dandong with the intention of boosting bilateral economic linkages, much like the Rason economic zone and the Sinujiu special administrative zone established in North Korea in the early 1990s and 2002, respectively. Dandong is a critical hub for trade, investment, and tourism for the two neighbors—exchanges with North Korea make up 40 percent of the city’s total trade and 70 percent of trade in and out of North Korea is conducted via Dandong and Sinujiu. However, a new $350 million bridge over the Yalu River to connect the two cities, intended to open in 2014, remains incomplete across the North Korean border, a symbol of cooling relations between Beijing and Pyongyang. Still, North Korea’s dependence on China continues to grow. Moreover, established informal trade along the China-North Korea border in items such as fuel, seafood, silkworms, and cell phones signals that despite stricter sanctions, smugglers are likely to continue to operate.

Beijing also provides aid [PDF] directly to Pyongyang, primarily in food and energy assistance. China, Japan, South Korea, and the United States have provided more than 75 percent of food aid to North Korea since 1995, but donations from all countries except for China have shrunk significantly since the collapse of the Six Party Talks in 2009. North Korea, whose famine in the 1990s killed between eight hundred thousand and 2.4 million people, has repeatedly faced extensive droughts and severe flooding , which seriously damage harvests, threatening the country’s food supply. UN agencies estimate that up to 70 percent of the population, or eighteen million people, are undernourished and food insecure. There is also concern about the distribution of aid in North Korea, particularly since China has no system [PDF] to monitor shipments.

China’s Priorities

China regards stability on the Korean peninsula as its primary interest. Its support for North Korea ensures a buffer between China and the democratic South, which is home to around twenty-nine thousand U.S. troops and marines. “While the Chinese certainly would prefer that North Korea not have nuclear weapons, their greatest fear is regime collapse,” writes Jennifer Lind, a professor at Dartmouth University.

Beijing has consistently urged world powers not to push Pyongyang too hard, for fear of precipitating the leadership’s collapse and triggering dangerous military action. “Once a war really happens, the result will be nothing but multiple loss. No one can become a winner,” said Chinese Foreign Minister Wang Yi in April 2017, urging the United States and North Korea to show restraint.

The specter of hundreds of thousands of North Korean refugees flooding into China is also a worry for Beijing. “Instability generated on the peninsula could cascade into China, making China’s challenge of providing for its own people that much more difficult,” says Mike Mullen, former chairman of the U.S. Joint Chiefs of Staff. The refugee issue is already a problem for China: Beijing’s promise to repatriate North Koreans escaping across the border has consistently triggered condemnation from human rights groups. Beijing began constructing a barbed-wire fence more than a decade ago to prevent migrants from crossing, but the International Rescue Committee estimates thirty to sixty thousand North Korean refugees live in China, though some nongovernmental organizations believe the total to be more than two hundred thousand. The majority of refugees first make their way to China before moving to other parts of Asia, including South Korea. However, tightened border controls under Kim Jong-un have decreased the outflow of refugees.

[For Beijing,] stability on the Korean Peninsula has always been prioritized over denuclearization.
Ely Ratner, Council on Foreign Relations

Though Beijing favors a stable relationship with Pyongyang, it has also bolstered its ties with Seoul. China’s Xi Jinping has met with South Korean President Moon Jae-in and his predecessor Park Geun-hye on several occasions, while he has yet to visit or receive the North’s Kim. China was South Korea’s top trading partner in 2016 and the destination for a quarter of the South’s exports. Meanwhile, South Korea ranked fourth among China’s trade partners. Recently China has taken retaliatory measures against South Korean businesses to oppose the deployment of the U.S. missile defense system in South Korea’s eastern province of North Gyeongsang.

Experts say China has also been ambivalent on the question of its commitment to defend North Korea in case of military conflict. The 1961 Sino-North Korean Treaty of Friendship, Cooperation, and Mutual Assistance , up for renewal in 2021, says China is obliged to intervene against unprovoked aggression. But Bonnie Glaser of the Center for Strategic and International Studies says the Chinese government has tried to persuade North Korean leaders to revoke the clause that would force Beijing to come to Pyongyang’s defense. The Brookings Institution’s Jeffrey Bader describes the alliance between Beijing and Pyongyang as “a thing of the past,” saying that “the two enjoy at best a cold relationship that is likely to worsen.” Beijing has also intimated that if Pyongyang initiates conflict, it would not abide by its treaty obligation.

Washington’s Role

The United States has pushed North Korea to irreversibly give up its nuclear weapons program in return for aid, diplomatic benefits, and normalization of relations. But experts say Washington and Beijing, while sharing the goal of denuclearizing North Korea, have different views on how to reach it. The United States values using pressure to force North Korea to negotiate on its nuclear weapons program, while China advocates for the resumption of multilateral talks and what it called a “freeze for freeze,” a freeze in military exercises by the United States and its allies for a freeze in North Korea’s nuclear and missile testing. Ultimately, for Beijing, “stability on the Korean Peninsula has always been prioritized over denuclearization,” says CFR’s Ely Ratner.  

Washington has also tried to pressure Beijing to lean more heavily on Pyongyang. U.S. presidential executive orders [PDF] and congressional moves impose sanctions on countries, firms, or individuals contributing to North Korea’s ability to finance nuclear and missile development; some measures targeted North Korean funds in Chinese banks, while others [PDF] focus on its mineral and metal export industries, which make up an important part of trade with China. Washington deployed a missile defense system known as the Terminal High Altitude Area Defense, or THAAD, in 2017 to boost regional security, though Beijing strongly condemns the move and sees it as a threat to Chinese national security.

The administration of President Donald J. Trump has shaken up U.S. policy toward North Korea. Officials have stated that “all options are on the table,” alluding to the possibility of preemptive military strikes to thwart Pyongyang’s nuclear tests and development. Trump has also warned that Washington will be prepared to take unilateral action against Pyongyang if Beijing remains unwilling to exert more pressure on its neighbor. “If China is not going to solve North Korea, we will,” Trump said in an April 2017 interview with the Financial Times. Going even further, Trump told the UN General Assembly in September 2017 that the United States would “have no choice but to totally destroy North Korea,” if it was forced to defend itself or its allies. The U.S. military has stepped up joint exercises with Japan and South Korea and has periodically dispatched U.S. carrier strike groups near North Korea as a show of force.

If China is not going to solve North Korea, we will.
Donald J. Trump, President of the United States

The administration of President Donald J. Trump has shaken up U.S. policy toward North Korea. Officials have stated that “all options are on the table,” alluding to the possibility of preemptive military strikes to thwart Pyongyang’s nuclear tests and development. Trump has also warned that Washington will be prepared to take unilateral action against Pyongyang if Beijing remains unwilling to exert more pressure on its neighbor. “If China is not going to solve North Korea, we will,” Trump said in an April 2017 interview with the Financial Times. Going even further, Trump told the UN General Assembly in September 2017 that the United States would “have no choice but to totally destroy North Korea,” if it was forced to defend itself or its allies. The U.S. military has stepped up joint exercises with Japan and South Korea and has periodically dispatched U.S. carrier strike groups near North Korea as a show of force.

Still, the United States appears more interested in leveraging China’s economic influence over North Korea. Some experts, including David S. Cohen and Anthony Ruggiero, argue that Washington should impose more secondary sanctions that will penalize Chinese banks that help finance North Korean front companies. The U.S. Treasury has done just that, imposing some secondary sanctions on both Chinese and Russian entities. Meanwhile, other analysts worry that such economic pressures and further alienation of Pyongyang could embolden the Kim regime to resort to rash military action. Others question the effectiveness of sanctions in getting China to bring North Korea to the negotiating table. North Korea has vowed that the country’s nuclear weapons program will never be up for negotiation.

Looking Forward

“North Korea is in a category all its own,” writes the Brookings Institution’s Jonathan D. Pollack. “The North Korean leadership has thus convinced itself (if not others) that its existence as an autonomous state derives directly from its possession of nuclear weapons.” Though China may be unhappy about North Korea’s nuclear brinkmanship, analysts say it will avoid moves that could cause a sudden regime collapse.

Even as China signals that it will toughen its stance toward North Korea—though stopping short of challenging its survivability—there is mounting skepticism that China alone can resolve the North Korea problem. Chinese officials have emphasized that they do not “hold the key to the issue.” Some analysts say that China’s tightening of economic ties are unlikely to deter Kim’s nuclear ambitions,  while others say the North Korean leader no longer cares what China thinks of its actions. 

Whether Chinese pressure can sway Pyongyang to alter its behavior remains to be seen, especially in a climate of mounting distrust in Northeast Asia, but North Korea’s nuclear program is becoming increasingly problematic for China’s desire to maintain regional stability.

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Resources Up

Evan Osnos explores China’s reluctance to pressure North Korea in a September 2017 New Yorker article.

CFR experts Ely Ratner, Sheila A. Smith, and Scott A. Snyder discuss U.S. options on North Korea in this August 2017 conference call.

China expert Minxin Pei weighs in on China’s policy decisions vis-à-vis North Korea in the Atlantic.

This 2016 CFR Independent Task Force report, A Sharper Choice on North Korea, argues that China’s policy toward its neighbor will critically affect the fate of Asia.

CFR’s Robert McMahon and James M. Lindsay discuss North Korea’s nuclear weapons program with the Carnegie Endowment for International Peace’s George Perkovich in this April 2017 podcast.

The UN’s Commission of Inquiry on Human Rights in North Korea investigated systemic and widespread rights violations in this February 2014 report.

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