If China falls out with North Korea, then Russia will step in

Kirsty Needham (Sydney Morning Herlad, Beijing, 24 APRIL 2017)

Chinese President Xi Jinping has told his US counterpart Donald Trump that Beijing opposes any action on the Korean Peninsula that goes against UN Security Council resolutions.

The phone call between the two leaders came as Chinese media reported on a rift between Beijing and Pyongyang, with North Korean state media criticising China as “dancing to the tune of the US”…

The US has repeatedly urged China to use its economic clout to put pressure on North Korea to abandon its nuclear program, warning that if China cannot produce a solution, the US may act alone.

Mr Xi told Mr Trump the international situation was changing rapidly and it was important the US and China maintain close contact, Chinese state media reported.

“Xi Jinping stressed that China is firmly against any behaviours that violate the UN Security Council’s resolution, at the same time it hopes all parties concerned maintain restraint, avoid doing anything intensifying the peninsula situation,” CCTV reported.

Asked about the North Korean media attack, a Chinese Foreign Ministry spokesman said: “China’s position is consistent and clear and the relevant party should be very clear about that.”

Chinese experts are saying cutting oil would be the toughest sanction China could impose – it was last done in 2003 for just three days.

North Korea’s mining industry would be severely hit if China cut energy supply to the regime.

The front page of North Korea’s Rodong Sinmun newspaper on Monday praised the DPRK’s mining industry as self-reliant, exceeding capacity and “smashing the enemies’ sanctions”.

Kim Jong-un sent congratulations to a magnesite mine – a mineral that is exempt from UN sanctions. North Korea has the world’s second largest deposits of magnesite, a raw material listed as “critical” by the US and the European Union and a key component in smartphones and aircraft. China has the world’s largest deposits.

Leonid Petrov, an ANU fellow, says China is buying other rare earth minerals that are vital for high-technology products at half price from North Korea. He says if relations between Pyongyang and Beijing continue to deteriorate, Pyongyang could cut off sales to China and find new export markets elsewhere.

“If China falls out with North Korea, then Russia will step in. North Korea allows China and Russia to compete for concessions and ports and fishing,” he said.

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How the Hell does North Korea Manage to Earn Foreign Exchange?

(Charis Chang, 2017.04.18, www.news.com.au) From the outside North Korea looks like an impoverished state cut off from the rest of the world. But during its weekend procession, the isolated regime managed to put on an impressive display of its rockets and military strength, in defiance of growing American warnings about its military capability.

While many have the impression of North Korea being a poor country that can’t feed its own people, Leonid Petrov told news.com.au that it had large stockpiles of natural resources that it used to fund its weapons research.

“North Korea is a mountainous country that has huge natural resources including deposits of high quality coal, gold, silver, uranium, iron ore and rare earth metals,” said Dr Petrov, a visiting fellow at the Australian National University College of Asia and the Pacific.

He said North Korea had exported its minerals to allies such as China and the Soviet Union for decades until the collapse of the communist bloc. Since then it had been more proactive in international trade, although the tightening of sanctions has seen its export ability curtailed recently.

Dr Petrov said China in particular had maintained trade in North Korea and was keen to keep a monopoly on its rare earth metal trade.
“So China buys everything North Korea is prepared to offer (of its rare earth metals),” he said. These metals are important because they are used the production of many 21st century products like mobile phones, computers, LCD screens and cars.

Another way that North Korea earns its money is by exporting its workers to China, Russia, the Middle East, Eastern Europe and South East Asia. In fact there were no visa requirements between North Korea and Malaysia until early this year, when tens of thousands of North Korean workers were deported following the assassination of North Korean president Kim Jong-un’s older brother Kim Jong-nam.

“Tens of thousands of North Koreans are sent overseas to work in restaurants, construction sites, as vegetable growers and builders of monuments in places like Africa,” Dr Petrov said.

“Dictatorships like big projects and North Korea can offer them labour to build big monuments, highways and airports.” Dr Petrov said the “lion’s share” of the worker’s wages went to the North Korean government.

North Korea also welcomes foreign investment. The Egyptians have invested in the country’s telecommunications network, concrete factories and construction industries, while the Chinese are keen on fishery resources, the mining industry and have developed a network of supermarkets selling Chinese-made consumerables.

Previously North Korea also benefited from co-operation with South Korea, which invested hundreds of millions into the Mt Kumgang resort where South Koreans and foreign visitors could stay and go mountain climbing. The Kaesong Industrial Park, which produced goods using South Korean know-how and North Korean labour, also gave it a financial boost until it was shut down last year following North Korea’s fourth nuclear test.

Dr Petrov said until last year China was also providing North Korea with other resources it needed such as crude oil and petroleum at “friendly prices” or possibly even for free.
It’s this type of trade that the Trump administration and the Australian government wants to block.

“They’re keen to see China stifling North Korea to death and causing the economic collapse of North Korea’s economy, which is unrealistic,” Dr Petrov said.

He said China sacrificed more than 250,000 soldiers during the Korean War to support the North Korean government. “It’s wishful thinking that China would just turn the tap off and allow the North Korean regime to implode.

“China understands that this would cause chaos in North Korea, the absorption of North Korea into South Korea and the subsequent advance of American troops to the Chinese border.

“So China is not going to allow the economic collapse of North Korea.” Dr Petrov said China was more likely to demonstrate its anger through ceasing economic co-operation temporarily, such as when it suspended the importation of coal after the assassination of Kim Jong-nam. “It bites but is not deadly,” he said.

But Dr Petrov said these types of actions were probably not going to be effective in curbing North Korea’s ambitions as it could always turn to Russia to help. “If China ceases economic co-operation, then Russia steps in and will continue doing the same,” he said.

“North Korea knows that well and plays off Russia against China, allowing Moscow and Beijing to compete for concessions on North Korea’s mining industry, fisheries and port facilities.” Russia is interested in North Korea because it sees it as a good market for Russian gas, oil and electricity. Russia believes North Korea could also potentially open the corridor for the export of energy to South Korea.

It sees North Korea as part of a potential transport corridor stretching from South Korea to Europe, via Russia’s Trans-Siberian Railway. “Russia is not interested in the collapse of North Korea but the stability and co-operation with North Korea,” Dr Petrov said.

Even other countries have had a hard time enforcing sanctions against North Korea.
A United Nations expert team released a report last month that found North Korea had managed to avoid sanctions by using Chinese front companies and other foreign entities to disguise where its goods were coming from. Last year it managed to continue its export of banned minerals and also has access to international banking.

Part of the problem is how different countries interpret what is banned by the sanctions.
One example was highlighted after Austrian ski equipment was found at the luxury Masik ski resort in North Korea. Austria later said it didn’t think ski lifts were included in the European Union’s definition of luxury goods prohibited from being sold to North Korea.

An Australian brand of ski clothing was even manufactured at the Taedonggang Clothing Factory in Pyongsong from 2014, but the company said it was not aware of the problem until after production had been completed and shipped to retail customers. It took two years for the company to sever its production line.

When asked how the conflict with North Korea could be resolved, Dr Petrov said: “Stop the war, end the conflict, reconcile and co-operate”. Dr Petrov believes that North Korea had a chance for survival if it could resume co-operation with South Korea, and this could happen if South Korea changed leadership at its May 9 presidential election.

He said co-operation did happen during the 10 years of the Sunshine policy that encouraged interaction and economic assistance between the two countries from 1998 to 2008, but the US actions were very important.
He said North Korea initially froze its nuclear program according to an agreement made when Bill Clinton was president but his successor George Bush scrapped this, which forced North Korea to resume its program.

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The Ball is in the US Court

(ABC TV, 7:30 Report, 2017.04.17) US Vice President Mike Pence has warned the ‘era of strategic patience’ with North Korea is over after the country carried out a failed missile launch. The world now awaits the next move of the brutal North Korean leader Kim Jong-un.

DONALD TRUMP, US PRESIDENT: North Korea’s a problem. The problem will be taken care of.

LT. GENERAL H.R. MCMASTER, WHITE HOUSE NATIONAL SECURITY ADVISOR: The President has made clear that he will not accept the United States and its allies and partners in the region being under threat from this hostile regime.

LEONID PETROV, ANU COLLEGE OF ASIA AND THE PACIFIC: The whole population is determined to stand up and fight until the last bullet, until the last soldier.

STAN GRANT, REPORTER: North Korea is at war. Nothing has changed in more than 60 years. For this reclusive country, the Korean War has never ended.

LEONID PETROV: For North Korea, the state of war is their normal state of existence, and the population of North Korea is told every day that the war is going on, it never ended in 1953.

STAN GRANT: The drums are now beating louder. American warships are steaming near the Korean Coast. This past weekend, North Korea put on a display of its own firepower. It sends a deadly warning – it has the weapons and, if pushed, it could use them.

LEONID PETROV: The worst thing for the Kim regime is an attack, a regime change, occupation of North Korea, total chaos and the termination of the dynasty.

STAN GRANT: Leonid Petrov has spent a lifetime studying this hermit kingdom. He was in the capital, Pyongyang, just this year. It is, he says, a strange place, where time has stood still.

LEONID PETROV: North Koreans live in year 106.

STAN GRANT: 106?

LEONID PETROV: Yes, 106th year after the birth of their founding father. Kim Il-sung.

STAN GRANT: They’re not living in the 21st Century?

LEONID PETROV: They live in the year 106.

STAN GRANT: Survival of the regime now rests with the boy king, Kim Jong-un. He came to power before he was 30 years old. Like his father and grandfather, he is brutal, he executes writers, he rules his people with fear and he continues to amass a military that threatens nuclear apocalypse.

In a report for the United Nations, former Australian High Court judge Michael Kirby peered into this terrifying world of secret prisons, mass starvation and state-sanctioned violence.

MICHAEL KIRBY, UNITED NATIONS INVESTIGATOR: We found that there was widespread, prolonged and brutal wrongs done to the people of North Korea, many of which rose to the level of crimes against humanity.

STAN GRANT: So, could a regime that turns its guns on its own people launch an attack against the rest of us?

LEONID PETROV: If North Korea is attacked with the force which is similar to nuclear capability, nuclear attack, then North Koreans probably wouldn’t think twice before using the weapons of mass destruction.

STAN GRANT: Petrov fears an American attack that pushes North Korea into a corner. Kim Jong-un, he says, would immediately strike across the border into South Korea. Military strategists believe it could rain down half a million artillery rounds in just one hour.

LEONID PETROV: That would cause tens of thousands of human lives, at least, and massive panic, and also devastation to the infrastructure…

(Watch the full interview here… )