China is standing in the way of North Korea negotiations

By Willis Krumholz

After the rose-colored summit in Singapore between President Trump and North Korean dictator Kim Jong-un, reality is starting to set in. During meetings with North Korean leadership in Pyongyang, U.S. Secretary of State Mike Pompeo was accused by Kim’s minions of using “gangster-like” tactics. This controversy was preceded by news that North Korea is ramping up its missile production.

The actual Korean word leveled against Pompeo better-translates into American as “robber,” meaning that North Korea believes America is demanding that Kim give up his crown-jewels—nuclear weapons—immediately, and before America has provided any concessions. The Trump administration, of course, fears making the same mistake as its predecessors: Providing concessions and economic aid only to watch the North Koreans walk away without fulfilling their end of the bargain. In other words, mutual trust remains low.

But there is an even bigger hurdle faced by the Trump administration. North Korea denuclearizing was always highly unlikely, but any meaningful deal between North Korea and America that leads to better relations—even just securing stockpiles and reduced quantities of missiles—is likely to be hindered by China. For a time, Beijing cooperated with America’s “maximum pressure” sanctions. But now China is loosening enforcement at the North Korean-Chinese border and granting the Kim regime much-needed access to foreign currency. This strengthens North Korea’s negotiating position against America.

Sen. Lindsey Graham (SC) made a similar point in a Sunday morning interview, where he claimed that China’s renewed aid to the Kim regime was a negotiating chip in Beijing’s trade dispute with America. President Trump followed up on Monday with a tweet that echoed Graham’s sentiment. But Trump and Graham are only half right. There is more to the story than the Sino-American trade dispute, and in search of a workaround to China’s loosening of sanctions, it is important to fully understand why Beijing is log-jamming.

Chinese easing of sanctions on North Korea isn’t about trade

The real driving force behind China’s overtures to Pyongyang has to do with China’s fear of a unified Korean Peninsula, or of a non-isolated North Korea that has working relations with China’s strategic adversaries, especially the U.S. This has nothing to do with the trade-dispute. In fact, trade tensions were subdued when China was cooperating on North Korea, and China stopped implementing “maximum pressure” before Sino-American trade relations subsequently deteriorated.

Just look at the timeline, starting right before the Singapore summit was about to take place: Strict penalties on ZTE—a Chinese telecommunications company that disregarded American sanctions on Iran—were being rolled back by the White House. In exchange for ZTE’s pardon—and in a bid to hold off American tariffs—China’s regulators promised to approve a merger they had been holding up between NXP Semiconductors and Qualcomm, China made a vague promise to purchase more American agriculture products and natural gas, and China reduced tariffs on U.S. auto imports from 25% to 15%. China didn’t budge on its China 2025 industrial policy and forced technology transfer, but there was progress.

That détente was short-lived. Immediately after the Singapore summit took place, China signaled it would ease back “maximum pressure” on North Korea. This was in direct contradiction to the American denuclearization roadmap. Indeed, there is evidence that China had already begun to remove sanctions in the weeks prior to the summit. And only days after the summit, China’s President Xi Jinping made sure to host Kim in Beijing, where the two leaders predictably focused on sanctions relief.

Now that China has reduced “maximum pressure” on North Korea, Washington has ratcheted trade tensions back up. America just imposed a 25% tariff on $34 billion worth of Chinese imports. China reciprocated. The momentarily-lowered tax China places on U.S. autos went from 15% to 40%. In other words, it is just as likely that America is using trade as a bargaining chip to coax China into maintaining “maximum pressure.”

China fears a North Korea outside its orbit

But if President Trump uses the trade dispute as a bargaining chip to re-engage “maximum pressure,” China—for geopolitical reasons that supersede the threat of tariffs—will constantly look for ways to keep the North well-away from Washington. China surely doesn’t want North Korea to possess nuclear weapons, but the Chinese fear American influence in North Korea even more.

That’s a major reason why no president before Donald Trump could get China to cooperate on tough sanctions. The prospect of a non-nuclear Korean Peninsula and a bordering state that wasn’t drunk on petulance—attractive as this was for China—didn’t outweigh the risk of increased American influence. But President Trump is different than his predecessors. He has a new bargaining chip no other president possessed. Trump is a trade hawk (protectionist) like nothing Beijing has ever seen, and his sincerity cannot be doubted.

Under threat of a crackdown on China’s export-machine, Beijing went along with Trump’s maximum pressure. But that put China in an awkward position. China became the “bad cop,” imposing tough sanctions, while America—in Trumpian fashion—was promising to make North Korea rich. China holds the stick, and America holds the carrot. This situation was, and is, undesirable for China. Because North Korea borders China, it will work against any pivot by the North toward America.

And China has good reason to believe Kim would make a modest pivot if the price were right—not to being a U.S. ally, of course, but at least away from China and toward the rest of the world—given the deficiency of trust between China and North Korea. Some of this stems from ancient history. And Kim’s 2013 purge of the pro-China faction within his government surely doesn’t help. This purge famously included the execution of Kim’s uncle Jang, a highly influential Chinese ally, with an anti-aircraft gun.

How to work around China’s log-jamming

Working around China first requires the Trump administration to have realistic expectations. It is highly unlikely the North will give up all of its nuclear weapons. Significant resources and several decades have gone into making the North a nuclear power, and Kim will be hard-pressed to give up his ultimate insurance policy against the threat of regime-change. Because of this, the Trump administration should recognize that an arms-reduction and nonproliferation deal—and the normalization of relations between North Korea and the West—is a strategic victory in its own right. A nuclear North Korea is China’s problem too, and any sustained improvement of ties between North Korea and America would be a loss for Beijing.

That doesn’t mean that denuclearization is completely impossible and shouldn’t be a long-term goal, but more achievable and realistic goals should be sought as talks move forward. This requires a concrete plan of give and take, with the most achievable goals taking priority, and denuclearization saved for last. This is more in line with the phased approach desired by Kim, and while at odds with the strategy that National Security Advisor John Bolton prefers, it is the only path that isn’t a dead-end given North Korea’s strategic demands and China’s role as a spoiler.

The problem with a phased approach is that America has been burned by it in the past. The solution lies in building trust. Bring in a disinterested third party—possibly Switzerland, where Kim went to school as a boy—that can oversee, validate, and manage the step-by-step process of give and take. This is no different than a third-party that clears and settles transactions between two parties who do not know or trust each other in international trade. Greater trust between the Trump administration and Kim also offsets Beijing’s advantage of having an existing relationship of give-and-take with Kim.

Finally, America must work to neutralize China’s influence in Pyongyang. That means giving Kim a clear binary choice: trade with China, or trade with the entire world. And the North Koreans can only be given a binary choice if America is fully-willing to walk away from talks, if the North Koreans fail to follow a verifiable, step-by-step process. Here, President Trump’s firm commitment to fixing or managing the Korean Peninsula risks doing the opposite, which strengthens North Korea’s position. But it also strengthens China if North Korea thinks it can receive benefits from China and still walk back to an anxiously-waiting America.

Yet if Kim really seeks prosperity, his country needs relations with more than China and Russia, and he needs an end to sanctions. The choice should be made clear: If North Korea—under incentive from China or not—fails to operate with some modicum of good-faith, the hermit kingdom can keep on trading raw materials with China and be forever isolated from the outside world.

There is a way to avoid war, nudge North Korea away from China, and make the Korean Peninsula safer. Set out concrete steps of give-and-take, bring in a neutral arbiter, be willing to walk away, and first seek what’s realistically possible.

Willis L Krumholz is a fellow at Defense Priorities. He holds a JD and MBA degree from the University of St. Thomas, and works in the financial services industry.

This piece was originally published by The Diplomat on July 13, 2018. Read more HERE.