North Korea showcased its sprint toward the capability to launch a nuclear strike on the US with a sixth nuclear test and more missile launches.  Beijing supported sanctions adopted under UN Security Council Resolution 2375 and Resolution 2397, but continued to rejected calls for further pressure on the North.  China continues to call for the North’s suspension of nuclear and missile activities in exchange for the suspension of US-ROK military drills, along with dual-track denuclearization and peace talks.  Seoul and Beijing’s Oct. 31 agreement to “normalize” ties was a step toward returning the relationship to normalcy following a year-long dispute over THAAD, and paved the way to two summits between Presidents Xi and Moon.  While defense ministers’ talks resumed on Oct. 24, these efforts at reconciliation relied on setting aside core security differences to avoid the economic costs of conflict.  But these differences persist despite Beijing and Seoul’s shared desire to promote dialogue with Pyongyang and find ways to address rising peninsular tensions and the prospect of US-DPRK military conflict.

The turn to maximum pressure

Pyongyang conducted its sixth and most powerful nuclear test on Sept. 3.  Three days after the UN Security Council’s adoption of Resolution 2375 on Sept. 11, North Korea fired an intermediate-range ballistic missile over Japan demonstrating its ability to strike Guam.  Its latest missile test on Nov. 29, a new long-range missile capable of reaching the US mainland, signified the completion of its decades-long rocket development according to DPRK state media.  In a call with President Donald Trump on Sept. 18, President Xi Jinping committed to “maximizing pressure” on Pyongyang through full enforcement of UN resolutions, and on Nov. 29 affirmed Beijing’s cooperation on denuclearization.  Foreign Minister Wang Yi confirmed those commitments in talks with ROK counterpart Kang Kyung-wha on Sept. 20 on the sidelines of the UN General Assembly, where Ambassador Liu Jieyi declared that Beijing “strongly condemns” Pyongyang’s sixth nuclear test in terms that appeared harsher than past Chinese reactions in international forums.

North Korea’s sixth nuclear test presented a major test for China’s leadership at home and abroad, as they coincided with President Xi’s opening of the Ninth BRICS forum in Fujian on Sept. 4 and ahead of the 19^th Party Congress on Oct. 18-24, where Xi consolidated his power over the next five years.  Resolution 2375 was passed with Chinese support eight days after the test, in contrast to the UN’s previous eight resolutions on the North since 2006, some of which were concluded following months of deliberation.  For the first time this UN resolution limits DPRK oil imports, bans textile exports, and caps the employment of DPRK labor abroad.  But despite early indications of Chinese cooperation on implementing new sanctions, the latest resolution still reflected Beijing’s limited support for sanctions given the risks of destabilizing the Pyongyang regime.  Although oil restrictions are expected to reduce supplies of related products by 30 percent, Resolution 2375 doesn’t impose a complete oil embargo or asset freeze against Kim Jong-un as proposed in the initial US draft.  A day after Trump’s announcement of further sanctions on Sept. 21 targeting individuals and entities with economic linkages with the North, the PRC Foreign Ministry affirmed China’s “clear and consistent” opposition to unilateral pressure outside the UN framework.  Such remarks also challenged US Secretary of State Rex Tillerson’s calls on China and Russia to step up pressure by “taking direct actions of their own” as North Korea’s biggest supplier of oil and biggest employer of labor, respectively.

The recent series of North Korean provocations, including 11 missile launches since South Korean President Moon Jae-in took office in May, shifted the target of US calls for “maximum pressure” toward China.  House Foreign Affairs Committee Chairman Rep. Ed Royce proposed sanctions against 12 major Chinese banks, while Treasury Secretary Steven Mnuchin in an interview with CNBC on Sept. 12, a day after Resolution 2375’s adoption, threatened additional sanctions on China in the case of nonimplementation as part of an announcement of a new US executive order broadening the authorities of the US Treasury to impose sanctions on economic and financial partners of North Korea.  Acting Assistant Secretary of State for Asian and Pacific Affairs Susan Thornton at a Senate hearing on Sept. 28 argued that the success of the current pressure strategy depends on Chinese cooperation, describing progress from China as “uneven.”  After Pyongyang’s missile test on Nov. 29, US Ambassador to the United Nations Nikki Haley at an emergency Security Council meeting announced Washington’s request to China to cut off oil supplies to the North. On Dec. 22, the UNSC passed a resolution in response to the Nov. 29 missile test that further restricted North Korean imports of oil and called for a further sunsetting of the export of North Korean labor abroad. In the weeks that followed, there were reports that China had begun to shut down North Korean entities and send North Korean laborers in China home.

Suspension for suspension and dual-track dialogue

At a ceremony honoring the appointment of Seoul’s new ambassadors to the United States, Japan, China, and Russia on Oct. 25, President Moon identified South Korea’s ties with the four powers as key to peacefully resolving the DPRK nuclear issue, creating a peace regime on the peninsula, and promoting broader Northeast Asian stability.  But in the absence of a formal multilateral dialogue mechanism, Pyongyang’s sixth nuclear test amplified the need to coordinate regional policies on North Korea with Beijing, Seoul, and Washington.  New Chinese and South Korean nuclear envoys Kong Xuanyou and Lee Do-hoon in their first meeting on Oct. 31 agreed to work together to resume talks with Pyongyang, following Lee’s trilateral talks with US and Japanese counterparts earlier that month.  President Xi stressed China’s commitment to denuclearization through dialogue in talks with Trump in Beijing on Nov. 9, and extended China’s support for inter-Korean reconciliation when he met Moon in Vietnam two days later.

In addition to rejecting unilateral pressure, China has pushed for a “suspension for suspension” approach requiring North Korea to suspend its missile and nuclear activities in exchange for the suspension of US-ROK military exercises, combined with dual-track dialogue on denuclearization and the establishment of a Korean Peninsula peace mechanism.  President Moon in a CNN interview ahead of the UN General Assembly in September laid out his own dialogue-based approach to North Korea, against the backdrop of growing opposition demands at home to pursue nuclear armament including the redeployment of US tactical nuclear weapons.

The gap in Chinese and US strategies on Korea was apparent at the conclusion of Trump’s 12-day Asia tour (Nov. 3-14), during which he claimed joint rejection of the suspension for suspension option.  China’s Foreign Ministry on Nov. 16 quickly reasserted the proposal’s significance as “the most reasonable” first step toward the ultimate goal of peacefully resolving the nuclear issue.

Although differences remain on pressuring Pyongyang, Beijing has welcomed the liberal Moon government’s quest for inter-Korean reconciliation and regional dialogue with the North.  Moon urged regional partners at the ASEAN Plus Three and East Asia Summit in November to support “maximum pressure” on Pyongyang while also calling for joint efforts “to bring North Korea to the dialogue table through all available diplomatic means.”  As Prime Minister Lee Nak-yon indicated at an international forum in Seoul on Oct. 17, Seoul seeks cooperation from both the United States and China on peacefully resolving the North Korea issue, especially amid growing regional concern over a US military response.  According to the Oct. 30 China Daily , “with the escalating war rhetoric from Pyongyang and Washington, Beijing and Seoul stand in the same trench calling for the same thing: the maintaining of regional peace and stability.”

Beijing and Seoul’s Oct. 31 agreement: the three “noes” and South Korean responses

Beijing and Seoul advanced their own efforts toward reconciliation with coordinated statements by their foreign ministries on Oct. 31 agreeing to “normalize” ties, after more than a year of hostility following South Korea’s July 2016 announcement of its decision on THAAD deployment.  Pledging a consensus on the “further development of the strategic cooperative partnership,” the October agreement cleared the path to two summits between Presidents Xi and Moon on Nov. 11 and Dec. 14, and created a favorable setting for the first meeting of recently-appointed nuclear envoys, held the day the agreement was announced.  A bipartisan group of six South Korean lawmakers visited China two days later for talks on North Korea and overall bilateral relations, including meetings with head of the National People’s Congress Foreign Affairs Committee and former deputy nuclear negotiator in the Six-Party Talks Fu Ying, Vice Foreign Minister Zhang Yesui, and former State Councilor Tang Jiaxuan.

President Moon and President Xi. Photo: Yonhap News

However, the announcement of efforts to get China-ROK ties back on track itself became the subject of controversy in South Korea over whether the Moon administration had indeed agreed – as initial Chinese Foreign Ministry statements intimated – to the “three noes”: no further deployment of THAAD batteries in South Korea, no integration of South Korean missile defenses with US missile defense systems, and no establishment of a trilateral US-Japan-South Korea military alliance.  Intense South Korean media debates centered on whether the Moon administration conceded to Chinese demands on these issues as a prerequisite for improved relations or whether the two sides simply acknowledged these issues as a statement of current realities that might change, depending on circumstances.

Immediately following talks between Foreign Ministers Wang and Kang in November, both the South Korean Defense and Foreign Ministries dismissed reports of Chinese requests that Seoul take practical steps to address Beijing’s security concerns over THAAD.  The Defense Ministry on Nov. 24 denied China’s reported proposal to open military talks on THAAD, while Foreign Minister Kang at a parliamentary session on Nov. 27 rejected Chinese media calls for the “halt of THAAD deployment” and denied any official consensus on the “three nos.”  The denials also responded to South Korea’s domestic struggles over the Oct. 31 agreement with China.  While local governments strongly welcomed the economic benefits from the decision to renew ties, minor opposition Bareun Party leader Joo Ho-young called the deal another loss in “humiliating diplomacy.”

Substantive steps toward normalization of China-ROK relations during this time included the renewal of the China-ROK currency swap deal on Oct. 12 on the sidelines of international financial meetings in Washington and the resumption of bilateral defense ministers’ talks on Oct. 24 on the sidelines of the fourth ASEAN Defense Ministers’ Meeting-Plus in the Philippines.  Seoul’s decision not to lodge a complaint against Beijing’s retaliatory barriers in the tourism and retail sectors at a meeting of the WTO Council for Trade in Services on Oct. 6, despite earlier threats to do so from its Trade Ministry in September, suggested South Korea’s prioritization of diplomatic and economic cooperation with China.  For Beijing, the $55 billion currency swap renewal supported not only its promotion of the RMB as an international reserve currency since 2015, but also its claims since March that China’s economic retaliation against South Korea over THAAD had been driven by Chinese consumers rather than the PRC government.

Talks between PRC and ROK Defense Ministers Chang Wanquan and Song Young-moo on Oct. 24, the first such meeting in two years, implied a breakthrough in improving security ties but disclosed no details on its outcome.  The Oct. 31 joint statement by foreign ministries furthered speculation on reopening dialogue channels between defense ministries, including working-level talks launched in 1995 that were suspended in January 2016.  PLA Deputy Commander Lt. Gen. You Haitao held closed-door talks with ROK Army Chief of Staff Gen. Kim Yong-woo on the sidelines of the 10^th Pacific Armies Chiefs Conference in Seoul on Sept. 20, the first visit to South Korea by a high-level PRC defense official since Seoul’s 2016 agreement with US Forces Korea to deploy THAAD.  Recent progress in China-ROK military contacts, however, masks enduring limitations in the development of security dialogue mechanisms between the two countries, whose Joint Chiefs of Staff have not held bilateral talks in almost five years.

In addition to attempting to remove the THAAD controversy as a major obstacle in the relationship, the announcement raised hopes for an improved business climate in Xi’s “new” era, underscoring joint efforts to avoid the economic costs of conflict.  After the conclusion of the 19^th Party Congress, China’s Foreign Ministry on Oct. 26 sent early signals on its willingness to “overcome, together with South Korea, the obstacles currently facing their bilateral relations,” and to develop a “healthier and more stable” relationship.  Executive Vice President of the Party School He Yiting affirmed these interests in a Yonhap interview, ahead of his visit to Seoul as Xi’s envoy on Nov. 21-23, intended to brief South Korean counterparts on the Party Congress and Xi’s policy direction over next five years.

Despite such economic advancements, China and South Korea’s disagreements over THAAD and broader security issues were obscured by the October agreement.  These differences loomed over Foreign Minister Kang’s visit to China on Nov. 21-23 to meet counterpart Wang Yi and other officials in preparation for the Xi-Moon summit. Kang avoided addressing questions on North Korea policy raised by Trump’s relisting of North Korea as a state sponsor of terrorism on Nov. 20, deflecting the THAAD issue to the defense ministry.  While Wang on Nov. 22 called for Seoul’s “proper handling” of THAAD in line with Chinese security interests, South Korea’s National Assembly Speaker Chung Sye-kyun, who is from Moon’s Democratic Party, firmly defended the THAAD deployment during talks with Vice Chairman of the National Committee of the Chinese People’s Political Conference Leung  Chun-ying in Seoul on Nov. 30, a day after Pyongyang’s ICBM launch.  Cooperation on sanctioning North Korea as part of efforts to restore China-ROK ties dominated ruling Democratic Party leader Choo Mi-ae’s visit to Beijing on Nov. 30-Dec. 3 for an international conference of political parties and meetings with Chinese leaders including President Xi.  Tensions underlying the China-ROK partnership were on display on the sidelines of the Xi-Moon summit in December when Chinese security guards attacked and injured two South Korean journalists covering a business event, following which the Cheong Wa Dae Press Corps requested on official apology from Beijing for violating international human rights norms.

Xi and Moon seek business as usual

Moon Jae-in’s four-day visit to China on Dec. 13-16 marked his first trip to China as ROK president and the third summit with Xi following talks on the sidelines of the APEC forum in Vietnam in November and the G20 summit in Germany in July.  The Xi-Moon summit on Dec. 14 prioritized North Korea policy after Pyongyang’s resumption of provocations on Nov. 29 and the normalization of bilateral ties in line with the Oct. 31 joint statement.  Moon’s meetings with Prime Minister Li Keqiang and National People’s Congress Standing Committee Chairman Zhang Dejiang on Dec. 15 promised comprehensive improvements in bilateral relations.

The APEC Economic Leaders Meeting in Vietnam provided a multilateral platform for what the South Korean media called a “fence-mending summit” between Xi and Moon on Nov. 11 signifying the start of normalization.  President Moon and Premier Li reaffirmed such efforts two days later at ASEAN meetings in the Philippines, where they exchanged pledges to rebuild political trust and resume economic and cultural cooperation.  Addressing the 20^th ASEAN Plus Three Summit and East Asia Summit on Nov. 14, both leaders also signaled common interests in broader regional integration and community-building.  ROK Trade Minister Kim Hyun-chong reinforced recent Chinese calls against global trade protectionism by supporting plans to conclude negotiations for the Regional Comprehensive Economic Partnership by 2018, a highlight of the latest round of ASEAN meetings.

President Moon’s state visit to China included major business meetings in Beijing from Dec. 13 that showcased the economic motivations behind the renewal of China-ROK normalization.  Accompanied by top executives of South Korean giants like Samsung, Hyundai Motor, LG, SK, and Hanwha, Moon proposed three principles for improving bilateral economic ties: strengthening the institutional foundation of cooperation, pursuing future-oriented cooperation, and expanding cultural exchange.  This envisioned framework was supported by a series of deals between economic leaders reinforcing the Xi-Moon agenda.  ROK Commerce Minister Paik Un-gyu and PRC counterpart Zhong Shan on Dec. 15 agreed to accelerate talks on expanding the bilateral FTA to services and investment,  while ROK Finance Minister Kim Dong-yeon secured agreements to restart high-level talks on financial and economic issues with People’s Bank of China Governor Zhou Xiaochuan and National Development and Reform Commission Chairman He Lifeng.  Agriculture Ministers Han Changfu and Kim Yong-rok signed a MoU on animal safety and quarantine cooperation, under which the two sides will initiate information-sharing on contagious animal disease.

Despite the effort to put Sino-ROK economic relations on track, Moon received criticism from conservative South Korean media for being too obliging toward his Chinese hosts.  Moreover, despite efforts on both sides to compartmentalize the THAAD issue, a temporary lifting of a ban on Chinese group tours to South Korea appears to have been re-imposed in the aftermath of the summit, and it is unclear whether President Xi will attend the Olympic ceremonies in Pyeongchang.

China-DPRK political and economic interactions

Chinese and DPRK leaders exchanged friendly messages following the founding anniversary of the Workers’ Party of Korea on Oct. 10 and Xi’s reelection as Communist Party of China (CPC) leader at the 19^th Party Congress.  President Xi extended his support for “sustainable and stable” ties according to the Korean Central News Agency in response to Kim Jong Un’s congratulatory message.  As Xi’s special envoy, CPC International Relations Department head Song Tao visited North Korea on Nov. 17-20 to report on the Party Congress and exchange pledges to strengthen party-party and overall bilateral ties.  Song’s visit included meetings with WPK officials Choe Ryong-hae and Ri Su-yong, and raised hopes for bringing North Korea to the negotiating table in line with Xi’s joint commitments with Trump and Moon earlier that month.  Such hopes were soon deflated by Song’s apparent failure to meet Kim Jong Un and Pyongyang’s declarations that it will not change course in nuclear development unless Washington abandons its “hostile policy.”  China’s Global Times expressed skepticism from the onset, arguing on Nov. 17 that “the key to easing the situation on the peninsula lies in the hands of Washington and Pyongyang … even if Song opens a door for talks, the door could be closed anytime.”

Beijing’s commitment to implementing new UN sanctions in response to North Korea’s September nuclear test is an immediate point of tension in the China-DPRK relationship.  China took steps toward implementation in the weeks immediately following the Sept. 11 UNSC resolution.  Local reports suggested tightened measures against smuggling in small-scale border trade areas like Dandong and the Yanbian Korean Autonomous Prefecture following Beijing’s suspension of coal, mineral, and fishery imports from August in response to North Korea’s missile launches in July.  The Commerce Ministry on Sept. 28 ordered the closure of DPRK companies operating in China by January 2018, within 120 days of the adoption of UNSC Resolution 2375.  Beijing’s visa restrictions from Sept. 12 reportedly led to mass departures of North Korean workers including an estimated 2,600 in the northeast provinces of Liaoning, Jilin, and Heilongjiang.

While the Commerce Ministry on Sept. 23 announced restrictions on petroleum exports and textile imports in line with Resolution 2375, it also made clear that its restrictions do not apply to crude oil exports.  After Trump announced Washington’s additional sanctions on North Korea, the PRC Foreign Ministry on Sept. 22 firmly denied media reports of similar actions by China’s Central Bank to restrict local services to North Korean clients. Doubts remained over China’s approach to sanctions implementation as its imports of DPRK coal in September amounted to $44 million according to the Korea International Trade Association, despite the Commerce Ministry’s announced plan to implement import bans under the UN’s August resolution.

The limits of Chinese pressure: domestic debates

As Chinese analysts like Cheng Xiaohe of Remin University indicate, North Korea’s sixth nuclear test was a “political test” for inducing policy change in Beijing.  But many Chinese observers find it unlikely that Beijing’s growing disproval will translate into tougher action given its fundamental interest in avoiding DPRK instability leading to collapse and unification under US-ROK control.

According to Zhao Tong of the Beijing-based Carnegie-Tsinghua Center for Global Policy, cutting off Chinese crude oil supplies could undermine North Korean stability, but China’s biggest concern is the possibility of North Korean military retaliation against China.  While condemning the test as “another wrong choice” in violation of UN resolutions, the Global Times on Sept. 3 similarly warned against a full oil embargo given the likelihood of a China-DPRK confrontation, and uncertainty over whether such actions will deter Pyongyang from further tests.  This skepticism over China’s economic leverage reflects a longstanding Chinese view that “The root cause of the North Korean nuclear issue is that the military pressure of the Washington-Seoul alliance generates a sense of insecurity for Pyongyang.”  As Da Zhigang of the Heilongjiang Academy of Social Sciences argued in December, “the U.S. should not shift the responsibility of resolving the North Korean nuclear issue to China as China’s influence on North Korea is not as big as the U.S. has assumed.”  According to Zhu Feng of Nanjing University, rather than taking the unlikely strategic option of cutting off oil, “China should push the US to address North Korea’s security concerns.”

Beijing’s biggest immediate priority, however, is the human security risk raised by the prospect of nuclear contamination in China’s northeast regions, which some Chinese analysts identify as the “bottom line for China in showing restraint” toward North Korea.  The September nuclear test, from which the US Geological Survey recorded a 6.3-magnitude earthquake, ignited public protests in Harbin against the health and security implications and led to the temporary closure of the Changbai Mountain tourist site.

Conclusion: 2018 Winter Olympics

As Beijing and Seoul marked their 25^th anniversary of diplomatic ties in 2017, new ROK Ambassador to China Noh Young-min took office in October by pointing to a growing consensus on both sides on the need to avoid conflict over THAAD.  According to the Oct. 30 China Daily , renewed efforts to “normalize” ties show that “their common interests outweigh their differences” at a time when “growing tensions between Pyongyang and Washington threaten to become more than just a war of words.”  Just as commercial interests were a driver of China-ROK normalization 25 years ago, the Oct. 31 agreement set aside differences on core security priorities to advance the economic partnership.  As President Moon stated in December in his opening address at the China-ROK business forum in Beijing, partners “must first become friends before doing business together.” However, as the economic relationship has matured and Chinese and South Korean companies have become more direct competitors both in the Chinese and the global market, it is becoming increasingly difficult for Seoul and Beijing to set aside security issues in favor of joint economic gains deriving from trade and investment cooperation. This shift will likely presage a more contentious Sino-South Korean relationship.

Reiterating Beijing’s calls for “suspension for suspension,” Foreign Minister Wang Yi at an international seminar in Beijing on Dec. 9 suggested that prospects on the Korean Peninsula are “not optimistic” given the current “black hole” of confrontation.  A key test for Beijing’s Korea strategy is South Korea’s hosting of the 2018 Winter Olympics on Feb. 9-25, which has had the dual effects of catalyzing inter-Korean talks and delaying US-ROK military drills until after the Olympics.  In addition to the outcome of such talks, the longer-term prospects for addressing North Korea and peninsula security will remain dependent on the level of coordination and calibration of respective pressure and dialogue among China, South Korea, and the United States.

Chronology compilation and research assistance provided by Yichun Liu.