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World News See other World News Articles Title: China, Finally, Clamps Down on North Korea Trade—And the Impact Is Stinging China, Finally, Clamps Down on North Korea Trade—And the Impact Is Stinging At a border crossing, garments and seafood aren’t coming out, and fewer Chinese goods are going in. Will it stop Kim Jong Un? People arrive on the North Korean side of the border near the Chinese city of Hunchun. ED JONES/Agence France-Presse/Getty Images By Jeremy Page, Andrew Jeong and Ian Talley Updated March 2, 2018 12:01 a.m. ET 135 COMMENTS HUNCHUN, China—Six months ago, the Quanhe checkpoint on China’s border with North Korea was a hive of activity and a vital conduit for trade helping Pyongyang finance its nuclear-weapons program. Hundreds of vehicles queued up on the Chinese side each morning, bearing food, building materials and consumer goods bound for North Korea, to return later with North Korean exports of seafood, garments and coal. Not any more. China, long criticized by the U.S. for supporting the North Korean regime, appears to be ramping up enforcement of international sanctions that Washington hopes will force Pyongyang to abandon its nuclear ambitions. A week-long tour of China’s border regions found that sanctions are hitting local Chinese businesses hard and starting to bite inside North Korea, with factory closures, price rises and power shortages in some areas. The impact within North Korea is likely to intensify later this year as it runs short of foreign currency, and could trigger an economic crisis by 2019, according to visitors, researchers and foreign officials monitoring the country. On a recent morning, only a dozen people were waiting at the Quanhe checkpoint. One was a Chinese businessman going to check on equipment stuck in his garment factory in the North Korean port of Rason, which he closed in November after China began enforcing a newly adopted United Nations ban on North Korean exports of garments. His plant shutdown snuffed out the jobs of 200 North Korean workers, half of whose pay was going to the Pyongyang government. On a visit to Rason a few days earlier, the businessman said, prices for goods such as Chinese-made batteries were up at least 50% from last year because recent sanctions prevent new supplies being imported, while prices for North Korean seafood had fallen by half since a U.N. ban on its export last year caused a glut on the local market. “There were more than a dozen garment factories like ours in Rason, and thousands of people in the seafood industry,” he said. “Now, none of those people have jobs.” Sanctions Bite A decline in China's imports from North Korea accelerated dramatically in late 2017, after two new rounds of U.N. sanctions. Chinese exports to the country also dropped on a year-on-year basis every month since July. Chinese trade with North Korea, % change per month in 2017 vs. same month in 2016. U.N. sanctions ban North Korean exports of coal, seafood, iron and lead, including ore. U.N. sanctions ban or restrict fuel exports to North Korea, ban North Korean garment exports. Exports to N. Korea Source: China Customs Statistics Other Chinese traders concurred, some saying their crab and squid had been sitting in warehouses in Rason for months. In January, they said, Chinese border guards stopped letting traders bring into China even a small personal allowance of North Korean cigarettes. The slowdown doesn’t capture the total picture of cross-border trade. Smuggling persists across the river that forms the border with China, and on a larger scale at sea: Since late January, Japanese military planes have spotted four instances of North Korean ships appearing to take on cargo from other vessels in international waters. Still, the drop-off in official trade with China, which normally accounts for 90% of North Korea’s total, is a blow to Pyongyang. China’s imports from North Korea dropped by a third in 2017, the Chinese government says, and in December were down 82% from a year earlier. Chinese exports to North Korea declined year-on-year every month since July, with oil-product exports falling to almost zero since October. Many foreign officials monitoring border activity are skeptical of China’s official data, noting that they don’t include the crude oil it continues to export, and that Beijing can relax enforcement at any point. But even they agree its trade with North Korea plummeted in recent months. The train to Pyongyang now is often filled with North Korean workers heading home, as countries from Poland to the United Arab Emirates enforce sanctions that impose limits on U.N. members employing North Koreans. In Yanji, a Chinese city near the border, many local businesses are sending home North Korean workers when their visas expire, according to people familiar with the matter. The result is another hit to North Korea’s sources of hard currency. The question now is whether economic pain will persuade North Korean leader Kim Jong Un to change his nuclear strategy. Mr. Kim hinted in a New Year’s Day speech that sanctions were taking a toll, saying the economy had encountered “unprecedented impediments.” North Korean officials, however, have repeatedly said sanctions would never persuade the country to abandon its nuclear-weapons program. Poster Comment: Finally, the other shoe has dropped on North Korea. Post Comment Private Reply Ignore Thread
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