The South Korean news outlet Yonhap reports Monday that the United States has successfully pressured China out of investing heavily into North Korea – at least for now.
Reports following President Donald Trump’s meeting with Kim on June 12 revealed that Chinese businesses have begun preparing for the possibility of the United Nations dropping sanctions on North Korea, planning to take advantage of their geographical proximity to corner the communist nation’s markets. Reports also indicated that Chinese officials have stopped strictly implementing the sanctions, allegedly fining smugglers of North Korean goods and letting them pass through, rather than confiscating the merchandise.
Unnamed “industry sources” told Yonhap that North Korea’s official airline, Air Koryo, was forced to abruptly cancel plans to offer a charter flight between Chengdu and Pyongyang late last week for “political reasons.”
“All group tour packages using the Chengdu-Pyongyang charter flights were booked until early July. But sales have now been halted. It has been known that the suspension was caused by political reasons,” a source identified as an “industry official” told Yonhap. The source noted that several other Pyongyang-based air routes may also see delays in organization, and that conversations involving U.S. officials were to blame for the change.
Neither American nor Chinese officials have confirmed the report, though American officials have repeatedly stated that they will not seek to remove sanctions on North Korea until that country has completely and irreversibly ended its illegal nuclear program.
The report comes days after China’s state newspaper the Global Times warned investors in the country to stay away from North Korea, not because the rogue communist regime might expropriate their property or arbitrarily cause them harm, but because violating American sanctions can have devastating consequences.
“Chinese investors are paying close attention to North Korea’s economic situation in search of potential business opportunities, but they may have to temper their enthusiasm,” the Global Times warned last week. “Chinese companies need to take a cautious approach on investment toward North Korea before sanctions are lifted.”
“As trade friction between China and the U.S. continues to escalate, it’s possible that Chinese companies’ businesses in North Korea may become scapegoats for hostile U.S. trade protectionism,” the Global Times posited.
There are many signs that Chinese businesses and border municipalities are not heeding the warning. Reports suggest activity around the buildings that housed once-active North Korean restaurants in China, which may mean North Korean government agents are renovating with Chinese government permission to prepare for sanctions lifting. Air Koryo is also high on the list of North Korean companies working to strengthen ties between the two states, and reports from the region also note that Chinese investors have flooded North Korean trade fairs to learn more about investing first, before the rest of the world gets to North Korea.
North Korea sent its vice minister of external economic affairs, Ku Bon-tae, to Beijing on Monday to “expand bilateral economic cooperation,” Yonhap additionally reported. Ku appears to be especially interested in railway and electricity, according to Yonhap, which would make North Korea a good candidate for China’s One Belt, One Road (OBOR) plan. OBOR seeks to impose Chinese political dominance on the world through infrastructure and transportation projects built by the Chinese government abroad and ultimately swallowed up by Beijing’s authority.
It is far from the first time since dictator Kim Jong-un began openly stating his desire for a more robust North Korean economy that he has sent envoys to China. In May, Kim sent an entire delegation to Beijing to stay and study China’s repressive socialist economy.
“The visiting group will make some tours to learn about China’s achievements in economic development and reform and opening-up and promote an exchange of views between the WPK and the CPC on state governance,” Foreign Ministry spokesman Lu Kang said at the time.
Lu, speaking before the Foreign Ministry’s regular briefing on Monday, applauded both North and South Korea for what he said was a “favorable turn” in their bilateral ties. While not directly confirming Ku’s visit, Lu said, “We hope that all relevant parties can make constructive efforts to implement the consensus in a smooth way.”