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 July 05, 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 ally, biggest 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 fifth nuclear test 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 renewed 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 others (UNSC Resolutions 1874 [PDF], 2094 [PDF], 2270, and 2321 [PDF]), Beijing signaled a shift in tone from diplomacy to punishment. After North Korea’s most recent nuclear test in September 2016, China called on North Korea to not take action that would “worsen the situation.” Still, Beijing continues to have wide-ranging ties with Pyongyang, including economic exchanges and high-level state trips such as senior Chinese Communist Party member Liu Yunshan’s visit to attend the seventieth anniversary of North Korea’s ruling party in October 2015.

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. It did agree to further sanctions, some of which call for inspections of suspected nuclear or missile trade, but Western officials and experts doubt how committed China is to implementing trade restrictions.

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

Beijing has been trying to wean Pyongyang off pure aid in favor of more commercially viable ties.
James Reilly, Associate Professor, University of Sydney

Yet Beijing has taken some limited measures to squeeze Pyongyang economically. In February 2017, China’s commerce ministry temporarily suspended coal imports from North Korea through the rest of the year, a move that enhances the effectiveness of existing UN sanctions against North Korea. Beijing had previously banned coal imports from North Korea in April 2016 but had allowed exceptions for “people’s well-being.” Since the new ban, some vessels carrying coal have reportedly been turned away at Chinese ports. The Global Times, a semi-official Chinese newspaper, suggested in an April 2017 editorial that China may be supportive of measures banning oil exports to North Korea should Pyongyang conduct further nuclear tests, echoing similar calls from some Chinese experts. State-owned oil giant China National Petroleum Corporation also suspended fuel sales to North Korea in June 2017, citing concerns that North Korea would fail to pay the company. 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 upwards of 90 percent of North Korea’s total trade volume. Conversely, China’s purchases from its neighbor include minerals, seafood, and manufactured garments. In the first quarter of 2017, China–North Korea trade was up 37.4 percent from the same period in 2016. “China is currently North Korea’s only economic backer of any importance,” writes Nicholas Eberstadt, senior fellow at the American Enterprise Institute.

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, due to North Korea’s increasing isolation, its dependence on China continues to grow.

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, reported its worst drought in decades in June 2015 and extensive flooding in September 2016, which seriously damaged harvests. UN agencies designated up to 60 percent of the population, or fifteen million people, as food insecure. There is also concern about the distribution of aid in North Korea, particularly since China has no system [PDF] to monitor shipments. Recently, however, “Beijing has been trying to wean Pyongyang off pure aid in favor of more commercially viable ties,” University of Sydney’s James Reilly writes.

China’s Priorities

China regards stability on the Korean peninsula as its primary interest. Its support for North Korea ensures a friendly nation on its northeastern border and provides a buffer between China and the democratic South, which is home to around twenty-nine thousand U.S. troops and marines. “Chinese leaders have no love for Kim Jong-un’s regime or its nuclear weapons, but it dislikes even more the prospect of North Korea’s collapse and the unification of the Korean Peninsula with Seoul as the capital,” writes CFR President Richard N. Haass.

 Crisis Guide: The Korean Peninsula

Beijing has consistently urged world powers not to push Pyongyang too hard, for fear of precipitating regime 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 huge 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.

North Korea does not provide the kind of stable neighbor and element of the neighborhood that China likes.
Christopher R. Hill, Former U.S. Ambassador to South Korea

Though Beijing favors a stable relationship with Pyongyang, it has also sought to bolster its relations with Seoul in the South. China’s Xi Jinping met several times with now ousted South Korean President Park Geun-hye, while he has yet to visit or receive the North’s Kim. China was the destination for a quarter of South Korea’s exports in 2016, amounting to $124 million, but recently China has taken retaliatory measures against South Korean businesses to oppose the deployment of a 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 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. Beijing has also said if conflict is initiated by Pyongyang 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. “Washington believes in using pressure to influence North Korea to change its behavior, while Chinese diplomats and scholars have a much more negative view of sanctions and pressure tactics,” says the International Crisis Group’s Daniel Pinkston [PDF]. “They tend to see public measures as humiliating and counterproductive.”

The United States has also tried to pressure China to lean more heavily on North Korea. 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—these make up an important part of trade with China— luxury goods, or arms and weapons materiel. Washington began the deployment of a missile defense system known as the Terminal High Altitude Area Defense, or THAAD, in March 2017 to boost regional security, though Beijing strongly condemns the move and sees it as a threat to Chinese national security.

President Barack Obama’s administration eschewed direct talks with Pyongyang amid rocket, missile, and nuclear tests, and adopted an approach described as “strategic patience [PDF].” A 2016 report by the nonpartisan U.S. Congressional Research Service described the policy as designed to pressure the regime in Pyongyang by insisting on a commitment toward denuclearization, attempting to sway Beijing to toughen its stance on Pyongyang, and ratcheting up sanctions. Despite pursuing rounds of dialogue either bilaterally or under the auspices of the Six Party Talks, such efforts were fruitless.

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. Trump aides have declared the end of “strategic patience” and stated that “all options are on the table,” alluding to the possibility of preemptive military strikes to thwart Pyongyang’s nuclear tests and development. President 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. The U.S. military has stepped up joint exercises with its allies in 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 secondary sanctions that will penalize Chinese banks that help finance North Korean front companies. The U.S. Treasury did just that in June 2017, imposing sanctions on a Chinese bank, a shipping company, and two citizens. 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. Following North Korea’s successful test of its first intercontinental ballistic missile on July 4, 2017, Kim Jong-un said that his country’s nuclear weapons program would never be up for negotiation. The Kim regime’s posture and use of nuclear development to sustain its survival may rule out the possibility of an effective deal.

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.

For now, policy failure on the peninsula has dampened hopes for a de-escalation of regional tensions. Though Beijing, Seoul, and Washington agree that a denuclearized North Korea is a top priority, differences remain over how best to strip the country of its nuclear threat. But “there’s an increasing understanding that North Korea does not provide the kind of stable neighbor and element of the neighborhood that China likes,” says former U.S. ambassador to South Korea and Six Party Talk negotiator Christopher R. Hill.

Still, “China will be most likely to put diplomatic and financial pressure on North Korea if it believes that failing to do so will lead the United States to destabilize the regime,” write Joshua Stanton, Sung-Yoon Lee, and Bruce Klingner in Foreign Affairs. Whether Chinese pressure can sway Pyongyang to alter its behavior remains to be seen, especially amid 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.

Beina Xu contributed to this report.

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Resources Up

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.

Experts weigh in on the rising threat of a nuclear North Korea in this March 2017 CFR Meeting.

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

This 1994 Agreed Framework [PDF] outlines a potential deal between the United States and the Democratic People’s Republic of Korea to dismantle its nuclear program.