A few things worth noting about China’s August 2017 import ban of North Korean seafood and iron ore

By Benjamin Katzeff Silberstein

Beijing’s Commerce Ministry has issued an order for companies in the country to comply with UN sanctions, and cease imports of coal, iron ore, sea food and other items on the sanctions list, Reuters reports:

China’s Commerce Ministry issued on Monday an order banning imports of coal, iron ore, lead concentrates and ore, lead and sea food from North Korea, effective from Tuesday, as Beijing moved to implement United Nations sanctions announced earlier this month.

The UN sanctions must be implemented 30 days after the resolution was approved in a vote on Aug. 6.

Full article:
China issues order to implement U.N. sanctions on North Korea
Reuters
2017-08-14

Washington Post also reports on the iron ore and seafood import ban:

The ban will take effect from Tuesday, the Ministry of Commerce announced.

But at the same time, Beijing warned the Trump administration not to split the international coalition over North Korea by provoking a trade war between China and the United States.

The warning comes as President Trump is expected to sign an executive memorandum Monday afternoon instructing his top trade negotiator to launch an investigation into Chinese intellectual property violations, a move that could eventually result in severe trade penalties,

In China, these proposed measures were seen as an attempt to put pressure on Beijing to act more strongly against North Korea, and at the same time an attempt to shift the blame for the world’s failure to rein in Pyongyang’s nuclear and missile programs onto China alone.

“It is obviously improper to use one thing as a tool to imposing pressure on another thing,” Foreign Ministry spokeswoman Hua Chunying told a regular news conference Monday. “There will be no winner from a trade war, it will be lose-lose.”

[…]

China accounts for roughly 90 percent of North Korean trade but moved earlier in February to suspend North Korea’s coal imports until the end of the year. Coal normally accounts for about half of North Korea’s exports, but despite the coal ban, overall trade between the two countries remained healthy.

Last month China announced that imports from North Korea fell to $880 million in the six months that ended in June, down 13 percent from a year earlier. Notably, China’s coal imports from North Korea dropped precipitously, with only 2.7 million tons being shipped in the first half of 2017, down 75 percent from 2016.

But a 29 percent spike in Chinese exports to North Korea — North Korea bought $1.67 billion worth of Chinese products in the first six months of the year — helped push total trade between the two countries up 10 percent between January and June, compared with the same period last year.

The latest move to stem imports of iron, iron ore, lead and lead ore, and seafood products will put significantly more pressure on Pyongyang. But it is unlikely to be enough to convince Pyongyang to abandon its nuclear program, which it sees as essential to its own survival, experts say.

Full article:

China bans North Korea iron, lead, coal imports as part of U.N. sanctions
Simon Denyer
Washington Post
2017-08-14

Three things are worth noting:

First, this sort of order seems to be a general routine in China’s process of complying with UN sanctions, regardless of how strict controls and enforcement actually turns out to be later on. For example, China ordered coal trade to cease in April 2016, to comply with UN sanctions on North Korea, but the trade continued, with the “humanitarian exemption” clause as the excuse. The order itself, in other words, does not seem to be anything out of the ordinary. Whether or not it is enforced in the weeks, months or even years ahead will be the real test.

Second, Chinese imports of iron ore increased quite drastically over the past few months. It is only speculation, but perhaps Chinese authorities, businesses or other entities involved here sensed that UN sanctions on the horizon would target North Korea’s iron ore exports, and decided to “backload” its imports to compensate for an anticipated shortfall later on. Chinese iron ore imports from North Korea in April 2017 were two and a half times higher than in April 2016. We’d need to see actual numbers by the end of the year to really evaluate the impact of this iron ore import ban on North Korea’s foreign currency earnings, but the higher levels of imports in the preceding months will certainly cushion some of the impact from this ban.

Third, enforcement is tricky. To state the obvious, China is a huge country. Its border to North Korea is long and traders in both countries have years of experience in sanctions evasion. The flow of goods between the two countries — much of it through one single point between Sinuiju and Dandong — is difficult to monitor. Even after China’s import suspension of North Korean coal this past winter, some of the trade continued, and perhaps still does today under the radar.

In sum, as always, only time will tell what this actually comes to mean for North Korea.

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