Daily Management Review

Is Trump’s Maximum Pressure Tactic On North Korea Succeeding Because Of China?


04/09/2018




Is Trump’s Maximum Pressure Tactic On North Korea Succeeding Because Of China?
China could be the cause reason that the maximum pressure tactic on North Korea by U.S. President Donald Trump could be working even as there is the possibility of the U.S.-North Korea summit looms.
 
According to the latest trade data from China, the country has reduced its imports from North Korea by 78.5 and 86.1 percent in value in the first two months of the year which is much more than the U.S. sanctions on the rouge nation. There was also a drop of 33 and 34 percent in the first two months respectively in the export to North Korea from China.
 
It appears that North Korean leader Kim Jong Un has been forced to concede some of his earlier position because of the sustained trade pressure on Pyongyang by China which began at least nine months ago, despite Beijing being criticized for the most recent surprise visit of Kim Jong Un to the country. 
 
North Korea almost completely depends on its trade with China for its survival.
 
The trade with China is the life line that has provided food to the North Korean population and has kept the country’s economy from crashing because it is by far the largest trade link that the rouge nation has with the outside world. While there is varying reports of the value, it is widelyt estimated that foreign currency accounts for almost half of the trade dealing that North Korea engages in and the Chinese yuan is the most important of them.
 
Beijing therefore has a large leverage over North Korea even though the China has been somewhat reluctant to exert too much pressure on the nuclear-powered neighbor because of political and national security factors.
 
But that reluctance appears to be fading away now.
 
However, come caution should be exercised when considering the data. Firstly, both the countries are known for transparency in its information dealings. Additionally, according to Alex Wolf, a senior emerging markets economist with Aberdeen Standard Investments, an even tougher, targeted crackdown is revealed by more specific data.
 
Compared to the same period last year, there has been a drop of 4 per cent in the exports of refined petroleum of China in the last five months. There could be a further fall in total exports because of the downward trend, he believes.
 
Correspondingly, there has been a collapse in 2018 in the steel imports from China by North Korean and a similar picture is seen for cars.
 
"While China's role over the past few months has often been overlooked or little understood, it appears a strategy could be emerging: China wants to play a central role in 'resolving' this crisis, but wants to do it on its own terms," he wrote. "It's increasingly clear that Chinese pressure is a driving force and China will play a central role in any future talks."
  
According to Lu Chao, director of the Border Study Institute at the Liaoning Academy of Social Sciences, "huge pressure on North Korea" have been created by Beijing implementing the trade sanctions imposed by the U.S. because about 80 percent of the total trade of North Korea is with China.
 
"There is no doubt China is doing more than ever when it comes to sanctions," he said, adding restrictions on sales of textile and seafood products to North Korea imposed by China last autumn "have dealt a huge blow to the country."
 
"China has played a very important role in promoting the current change of the situation," he said.
 
(Source:www.cnbc.com)






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