China reportedly told its banks to stop doing business with North Korea.
The People’s Bank of China told banks in the country to “strictly implement the United Nations sanctions against North Korea,” four sources told Reuters.
Reuters added that banks were “told to stop providing financial services to North Korean customers and to wind down loans with existing customers.”
The Reuters report follows the latest round of UN sanctions, which were leveled last week.
Much attention has been paid to the commercial and financial ties between China and North Korea in recent months. Some have argued that the North Korean crisis can be “solved” if China applies economic pressure on the isolated regime.
In the 2016 US-Korea Yearbook published by the US-Korea Institute of the School of Advanced International Studies (SAIS) in the 2016 spring semester (and so, coming before the most recent round of sanctions), Han May Chan, then a second-year student, briefly explained the argument why the success of economic sanctions might depend on China’s participation. Decades of sanctions have left other world powers with less sway over North Korea:
“[…T]he DPRK has grown accustomed to the hostile sanctions regime for decades. Therefore, the effectiveness and the success of the current sanctions regime actually depends solely on China and North Korea. Unless the DPRK believes that the benefits from trade with the international community are greater than the current security benefits of prioritising its military-first economy, North Korea will have little incentive to change its policy.”
Others, however, have questioned whether a strong response from China — and China joining North Korea’s adversaries — could lead to the conclusion desired by the US and the UN.
“The last thing you would do in [North Korea’s] situation is give up your independent nuclear capability,” Jeffrey Lewis, who directs an East Asia program at the Middlebury Institute for International Studies, told the New York Times. “The one thing you hold that they have no control over. You would never give that up in that situation.”
Last week, the United Nations Security Council unanimously passed a US-drafted resolution to levy new economic sanctions on North Korea. The resolution intends to cap North Korea’s oil imports, ban textile exports, end additional overseas laborer contracts, suppress smuggling efforts, stop joint ventures with other nations, and sanction designated North Korea government entities, according to CNN.
China also previously announced a ban on imports of iron ore, iron, lead, coal, and seafood from North Korea.