Behind the scenes—in work being done by both intelligence agencies and private firms digging into the North’s trade with Beijing—analysts were becoming convinced that Xi had played Trump, and that China, in fact, did have the means to curb Kim if it chose. Beijing has, over the years, portrayed the companies who do business with the North as rogue firms, small private traders who worked hard to stay in the shadows and thus were difficult to control. But a recent, detailed report by C4ADS, a research firm based in Washington, D.C., which often consults with the U.S. on security issues, buttresses those inside the administration pushing for a harder line with Beijing. It argues that Pyongyang’s financing and procurement system for its weapons of mass destruction program is “centralized, limited and vulnerable—and thus ripe for disruption.”….A Trump White House policy review of U.S. strategy toward North Korea, has emboldened those in the administration who believe Washington and its allies have the ability to increase the economic pressure on Pyongyang—but only by going after the Chinese companies that funnel money and dual-use technology (equipment that can have an innocent purpose but which the North can also use in its weapons program) to Pyongyang.


Trucks drive on the Friendship Bridge over the Yalu River which connects North Korea’s Sinuiju to China’s Dandong, on April 11, 2013.JACKY CHEN/REUTERS

Doing so may be easier than most of the outside world understands if—and only if—Washington is willing to offend Beijing. While more than 5,000 Chinese companies do business with North Korea each year, trade between the two countries is dominated by just a handful of large companies, several of which are based in Dandong. In late June, the U.S. asked Beijing to go after 10 companies and individuals who, Washington believes, play an outsize role in China’s trade with North Korea—including selling parts and machinery used in Pyongyang’s weapons program.

Why wouldn’t Beijing do all it could to crack down on its own companies playing such a significant role in the North Korean economy? U.S. and allied intelligence analysts are divided on the answer. Some believe that the heads of the big conglomerates doing business with Pyongyang, (“CHI-NoKo 10,” )— are politically connected in Beijing. With a once-every-five-years Communist Party congress coming up in the fall, President Xi Jinping and his political allies don’t want to make more enemies of powerful businessmen, many of whom are already angry at China’s anti-corruption drive. Other analysts simply believe that a nuclear North means a permanently divided peninsula, rather than one under Seoul’s rule, and that Beijing will forever be happy with that arrangement because it wants no part of a united Korea allied with the U.S. on its border.

(Last) June 30, the Trump administration signaled it was serious: It announced sanctions against the Bank of Dandong, accusing it of facilitating financing for the North’s weapons program. On July 5, at the United Nations, Trump’s ambassador, Nikki Haley, delivered a blunt message to Beijing: “We will look at any country that chooses to do business with this outlawed regime.” That same day, the commander of U.S. forces in South Korea, General Vincent Brooks, said the U.S. and its ally were ready to go to war if necessary, to prevent nuclear proliferation in North Korea. “Self-restraint, which is a choice, is all that separates armistice and war,” Brooks said.



07_21_Noko_07People watch a huge screen showing the test launch of intercontinental ballistic missile Hwasong-14 in this undated photo released by North Korea’s Korean Central News Agency (KCNA), on July 5, 2017.KCNA/REUTERS


07_21_Noko_09North Korean leader Kim Jong Un looks on during the test launch of the intercontinental ballistic missile Hwasong-14 in this undated photo released by North Korea’s Korean Central News Agency (KCNA) in Pyongyang on July 5.KCNA/REUTERS

Now, Trump is vowing that equation will change. His administration has assessed that if Beijing proves itself to be unserious by the end-of-summer deadline Washington has set for action, the U.S. must go after the North’s Chinese partners itself, cutting off their access to the U.S. financial system if need be. Beijing, obviously, won’t be happy about this; just how unhappy it will be is the critical (and, for the moment, unknowable) question. An increasingly powerful China has many ways to hurt the U.S., including by punishing the American companies selling into the world’s second largest economy, as well as by using economic pressure against the two key U.S. allies in the region, South Korea and Japan. But Washington has decided that pressuring Chinese companies is essentially the only option left, short of war on the Korean Peninsula. No one wants that, including Beijing. It “tried” once, Trump tweeted; now, he’s giving China one last shot. Tensions in East Asia are as high as they’ve been since the end of the Korean War. Prepare for them to get worse.


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