How North Korea's Existence Depends on China's Economic Support

By Defense FOXBusiness

In what military experts say appears to be a North Korean KN-08 Intercontinental Ballistic Missile (ICMB) is paraded across Kim Il Sung Square during a military parade on Saturday, April 15, 2017, in Pyongyang, North Korea, to celebrate the 105th ... birth anniversary of Kim Il Sung, the country's late founder and grandfather of current ruler Kim Jong Un. Military analysts say the missiles could one day be capable of hitting targets as far away as the continental United States, although the North has yet to flight test them. (AP Photo/Wong Maye-E) (Copyright 2017 The Associated Press. All rights reserved.)

As North Korean leader Kim Jong-un attempted another missile test during this weekend’s Day of the Sun military celebration, Vice President Mike Pence warned Pyongyang Monday not to test U.S. resolve during a trip to South Korea.

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"Since 1992, the United States and our allies have stood together for a denuclearized Korean Peninsula. We hope to achieve this objective through peaceable means. But all options are on the table," he said during a press conference.

However, the country with the best position—at least economically—to talk North Korea down from provoking an international conflict might be China.

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President Trump has called on China for help in dealing with North Korea, and the administration has insisted the two world powers are working together to quell what the president has called “the North Korea problem.” That could be a smart move considering North Korea is almost completely reliant on China for trade.

“With minimal exception of Russia, China is [North Korea’s] only window into [the] outside world and provides it much of its fuel, food and technical goods. It is vital to NK's existence,” Ambassador James F. Jeffrey, the Washington Institute fellow and former assistant to the president and deputy national security advisor in the George W. Bush administration, told FOX Business.

China is North Korea’s single most important trading partner. China accounts for an estimated 70% of Pyongyang’s total trade, including essential goods and services like food and energy, according to 2016 data from the Congressional Research Service. In 2015 North Korea imported $2.95 billion worth of goods from China, and exported $2.83 billion there, according to data from the Observatory of Economic Complexity.

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“China clearly can, and has from time to time, used its economic leverage to persuade North Korea's leader. Last decade, when China's financial institutions were named as potential money laundering concerns by the U.S. Treasury, China halted fuel shipments to [North Korea] in order to get them to return to multilateral talks,” Stephen Yates, former deputy assistant to the Vice President for National Security Affairs and D.C. Intel Advisory CEO, told FOX Business.

However, as Ambassador Jeffrey pointed out, the problem for the Trump administration will likely be motivating the Chinese to put pressure on North Korea.

“China claims … if it pressures [North Korea, the] latter will implode and China will have to deal with a huge mess or South Korea and the U.S. Army on its borders. But this argument is self-serving. China sees North Korea as diplomatic and military leverage to drive help [the] U.S. out of the Western Pacific,” he said.

Trump, who campaigned on tough rhetoric including insisting Beijing should answer to currency manipulation claims, has been criticized in recent weeks for what some call “flip-flopping.” After meeting with Chinese President Xi at the White House earlier this month, Trump reversed that position, saying “they’re not currency manipulators” in an interview with The Wall Street Journal.

However, Yates, who views China as North Korea’s “enabler,” said the president is not putting off China’s economic abuses, he is simply prioritizing threats.

“President Trump placed the challenge presented by North Korea as both more immediate and more strategically significant for the United States in his discussion with China's president,” Yates said. “The Chinese will be in a better position to make a deal with him if they were to help reduce the threat posed by North Korea under its present leadership."

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