Dec. 13: China’s economic engagement with North Korea: towards greater conditionality?

by Mathieu Duchâtel and Phillip Schell
China has played an important role in trying to curb North Korea’s nuclear programme. Since the suspension of the Six-Party Talks in 2009, China has returned to an approach that prioritizes closer economic and political ties but has been criticized for undermining international efforts that prioritize sanctions, economic strangulation and diplomatic isolation. The mainstream view in the Chinese strategic community, however, is that a policy of economic engagement can serve the ultimate goal of nuclear disarmament. 
The China-North Korea Friendship Bridge during the dayThe China-North Korea Friendship Bridge, by Austin Joder

Following the death of Kim Jong Il in December 2011, the new North Korean leadership took important steps to further develop its nuclear weapon programme and to consolidate the programme’s political status. These developments, which culminated in a nuclear test explosion in February 2013, suggest that the acquisition of a nuclear deterrent is a strategic goal, rather than a tactical bargaining chip for North Korea.

China plays a central role in international efforts to curb the North Korean nuclear programme. In addition to supporting United Nations Security Council resolutions sanctioning North Korea, from 2003 the Chinese Government hosted the Six-Party Talks and is engaging in active diplomacy to try to restart the process. In response to the suspension of the talks in 2009, China returned to an approach that prioritized the bilateral relationship through closer economic and political ties with the immediate goal of stabilizing North Korea in a period of strategic uncertainties.

The link between economic engagement and nuclear disarmament

China’s economic engagement with North Korea since 2009 has never been elevated to the rank of a formal policy guideline. However, there is evidence that support for North Korean economic development policies has remained a key element of China’s policy since the ascension of Kim Jong Un. Chinese policies are often reactive and address short-term concerns, such as the economic interests of China’s north-eastern provinces or political stability in North Korea, but they also play a positive role in preparation for an ultimate settlement of the North Korean nuclear issue.

Chinese experts list three main arguments in support of the thesis that economic engagement also serves the purpose of non-proliferation and nuclear disarmament. First, they describe economic engagement as part of a long-term process of re‑engagement that will ultimately alter North Korea’s strategic calculus regarding the role of nuclear weapons. According to this logic, once North Korean people have better economic livelihoods and the economic gap with South Korea is reduced, the rationale for retaining nuclear weapons will diminish.

Second, they argue that during periods of diplomatic stalemate, economic engagement offers a unique opportunity to maintain a positive strategic dynamic.

Third, they argue that trade and economic development address an internal aspect of North Korea’s national security concerns, as risks of domestic instability is another source of insecurity, in addition to external threats.

Clearly, the long-term sustainability of China’s economic engagement can be debated. Despite signs that the economic relationship has developed, albeit slowly, since the 2013 nuclear test, Chinese policy priorities now appear more focused on the resumption of the Six-Party Talks and on providing assurances to the international community that progress is being achieved on better enforcement of UN Security Council sanctions. 


The relationship between China and North Korea remains fragile

The recent purge of Jang Song Taek for ‘anti-party, counter-revolutionary factional acts’ has highlighted the fragility of North Korea’s communication channels with China. A member of the Politburo and the National Defence Commission, Jang was leading North Korea’s economic diplomacy with China. Perceived as a reliable interlocutor in Beijing, he played a key role in supporting the development of special economic zones on the border with China, including during a high-level visit to Beijing in August 2012.

Jang’s demise seems motivated by a power struggle and considerations of political loyalty rather than policy disagreements or an ideological rift. For North Korea, finding a replacement with similar clout and credibility in China will be a challenge.

In addition, since China’s own government transition in November 2012, the new Chinese leadership has given no public sign of high-level political support for deepening economic ties. Under Chinese President Xi Jinping, the question of the North Korean leadership succession is no longer a concern. The development of north-eastern China and, over the long term, the shaping of an environment conducive to strategic stability and nuclear disarmament on the Korean peninsula are the two main factors underpinning China’s economic engagement with North Korea.

However, a number of factors may converge and lead to a resumption of high-level support by China in the near future, including the stalemate on the Six-Party Talks, North Korea’s emphasis on economic growth, the interests of China’s north-eastern provinces, and the perception that targeted UN Security Council sanctions should be balanced by economic support.

China could condition its support for North Korea on compliance with sanctions

Chinese economic engagement does not progress without risks. North Korea’s increased connections to the global economy through economic exchanges with China also enable it to evade sanctions and increase its procurement and proliferation activities.

China’s recent efforts to improve its implementation of UN Security Council sanctions should be seen in this context. North Korean proliferation activities have convinced the Chinese leadership to re‑examine the role of sanctions and export controls and adopt stricter enforcement. As a result, China’s policy increasingly balances elements of pressure with political and economic inducements.

Further reading:
SIPRI Policy Paper 40China’s Policy on North Korea: Economic Engagement and Nuclear Disarmament
by Mathieu Duchâtel and Phillip Schell
SIPRI Policy Paper no. 40


While these observations do not postulate a fundamental change in China’s policy on North Korea, they posit trends that suggest clear policy adjustments. These trends may be temporary and reversible, but they are a basis on which China can play a greater role to address risks of nuclear proliferation emanating from North Korea’s nuclear weapon programme.

Despite the fact that the denuclearization of the Korean peninsula still appears to be China’s foreign policy goal, it seems increasingly out of reach in the short term. Although the international community will not send signals that it could recognize the nuclear status of North Korea, non-proliferation and containment increasingly appear as intermediary goals that should be pursued through diplomatic efforts, including coercion through sanctions.

If the current trends of greater economic engagement and stricter enforcement of sanctions continue to progress, China will play a key role in the pursuit of these intermediary goals. 

 

 

Dr Mathieu Duchâtel is the Head of SIPRI’s China and Global Security Project. Phillip Schell is a Researcher with SIPRI’s Nuclear Weapons Project. 
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