Gordon Chang: We Might Need to ‘Nuke’ China’s Banks

Sunday’s North Korean nuclear test makes it all too clear that U.S. sanctions on North Korea and pleas with China for assistance have failed to rein in the rogue regime.

The Trump administration admitted as much on Sunday morning, when President Trump and Treasury Secretary Steve Mnuchin announced the administration was considering cutting off all trade with any country that does business with North Korea. That means, first and foremost, China.

China is North Korea’s largest trading partner and widely perceived as the country’s protector and benefactor. Early on in the Trump administration, China’s leaders pledged assistance in ending North Korea’s nuclear ambitions. But that assistance either has not been forthcoming or, as Donald Trump proposed in a tweet on Sunday, has failed.

How can the administration get China to take seriously its responsibilities with respect to North Korea? Columnist Gordon Chang says that the U.S. needs to propose sanctions that would threaten China’s already shaky banks.

From the Daily Beast:

What the administration should do is demand that Beijing and Moscow accept a complete embargo on North Korea. If they do not comply, the administration should threaten to impose severe costs on them. For instance, Trump could hand down what are essentially death sentences on the largest Chinese banks, like Bank of China, for laundering money for the Kim regime. The president can do that by designating them “primary money laundering concerns” under Section 311 of the Patriot Act. Such designations would deny these institutions the ability to transact in dollars.

Sanctioning the largest Chinese banks in such a manner could throw the Chinese financial and political systems into turmoil, and Beijing knows it. Therefore, the White House has the means to persuade China’s leaders to disarm the Kim regime.

Fortunately, Xi Jinping, the Chinese ruler, is particularly vulnerable at this moment. The 19th Communist Party Congress, which begins on October 18, is when Xi must consolidate his power if he is to continue strongman rule. He will be blamed by his many adversaries if relations with the U.S. are disrupted before the meeting.

Going after Chinese banks would mirror what the U.S. did to bring Iran to the bargaining table during the Obama administration, which levied stiff fines on banks. German Chancellor Angela Merkel on Saturday, in her weekly podcast, talked about employing the Iran model to get the North Koreans to agree to denuclearization.

That’s what Trump should do.

Of course, it would not just be China that would object to such measures. Wall Street has deep ties with China’s banks and would likely put up a fight against any such measures.