Seeking Deescalation, China Puts Pressure on Korean Ally

What use is a buffer state if it forces deeper American involvement in Northeast Asia?

The Forbidden City in Beijing, China, October 26, 2007
The Forbidden City in Beijing, China, October 26, 2007 (Malcolm Browne)

One of China’s biggest state bank shut the account of its ally North Korea’s main foreign exchange bank on the day confusing reports surfaced in East Asian media about the relocation of two missiles away from the Sea of Japan coast.

The Bank of China announced on Tuesday that it had halted transactions with North Korea’s Foreign Trade Bank and closed its account. Japan and the United States earlier prohibited their companies from doing business with the same entity after they accused it of helping finance Pyongyang’s nuclear weapons program.

North Korea most recently conducted a nuclear test in February which even China, usually protective of its fellow communist state, said it was “strongly dissatisfied” by.

The closure of the North’s bank account followed a visit by American treasury secretary Jack Lew to Beijing in March when tensions in Northeast Asia were rising as a result of the nuclear test. The United States, with little leverage over North Korea, has repeatedly urged the Chinese to put more pressure on their ally and discourage it from pursing a nuclear strike capacity.

North Korea is believed to possess several nuclear devices but lacks a reliable intercontinental missile capability to deliver them. Rockets tests have repeatedly failed.

On the day of the Bank of China’s announcement, South Korean media reported that the North had withdrawn two intermediate range ballistic missiles from its east coast. Japanese news agencies disputed that claim on Wednesday, citing allied officials as arguing that the missiles were merely being moved about.

Even so, North Korea has apparently stepped down from its highest combat readiness level to which it elevated in late March in order to demonstrate its resolve in the face of what it described at the time as “the United States’ nuclear threats and blackmail,” possibly in reference to an overflight by two American strategic stealth bombers that are capable of delivering nuclear weapons. Such a reduction in military readiness might explain a withdrawal in missiles from the coast.

Whether or not a movement in missiles was related to the Bank of China’s announcement, the fact that China put such pressure on North Korea could signal a shift in its strategy.

China effectively props up the North Korean regime, whose population lives on the brink of starvation after years of gross economic mismanagement, because it provides a buffer against South Korea and the nearly 30,000 American troops that are permanently stationed there. North Korea, then, as far as China is concerned, is supposed to keep the Americans at bay. Its behavior in recent months has achieved the opposite: the United States moved more military strike assets into the region.

In its propaganda, North Korea justified its actions, which included the suspension of a military hotline with the South and threats to strike American army basis in the Pacific, as a response to the United States’ strategic “pivot” to East Asia. China also regards the burgeoning American presence in its region warily, fearing that the aim is to encircle it and contain its rise.

However, North Korean threats only gave the United States more reason to strengthen their alliances with Japan and South Korea and deploy forces to the area — moves that China’s leaders, many of whom do not share their predecessors’ emotional attachment to an alliance that was forged in a war against the United States over half a century ago, might rightly interpret as detrimental to their nation’s interests.

China did not admit that closing a bank account of the North’s was an attempt to make it change it ways, nor is it likely to. Even if it seeks deescalation, it will not undermine the government in Pyongyang. Regime change there could herald reunification of the peninsula on South Korea’s terms which would raise Chinese fears of encirclement.