China consolidated relations with North Korea through a fourth summit between President Xi Jinping and North Korean leader Kim Jong Un that set the stage for a second US-DPRK summit in Hanoi. This process was further symbolized by the presence of Xi and the senior Chinese leadership at a concert by a flagship North Korean art troupe in Beijing. The no-deal Trump-Kim summit in Hanoi left Kim empty handed and caught the Chinese leadership by surprise, removing any possibility of a fifth Xi-Kim meeting during Kim’s return train ride through China from Vietnam.  It left Beijing concerned about the impasse, but hopeful that a mutual compromise might be salvaged. South Korean President Moon Jae-in’s reaction to the Hanoi summit failure had much in common with that of Beijing. But despite the visit to Beijing by Prime Minister Lee Nak-yon, smog hangs over China-ROK relations. Post-THAAD fallout and recriminations toward China resulting from worsening air pollution across the peninsula will set the diplomatic agenda for China-ROK relations through the rest of 2019.

A high-level kick-off for China-North Korea relations in 2019

After delivering a New Year’s speech with little reference to China, Kim Jong Un tried to lay the foundation for additional international diplomatic breakthroughs in 2019 with a surprise birthday visit to Beijing on Jan. 7-9.  In meetings with Kim, Xi Jinping repeated his admonition that “the two sides should maintain high-level exchanges, strengthen strategic communication, deepen friendly exchanges and cooperation, and promote the long-term, healthy and stable development of China-DPRK relations.”  Xi also sought to bind Kim to his denuclearization commitments by stating that “China supports the DPRK’s continued adherence to the direction on the peninsula, supports the continuous improvement of inter-Korean relations, supports the DPRK and the US holding summits and achieving results, and supports relevant parties resolving their respective legitimate concerns through dialogue.”  KCNA reported that Kim pledged North Korea’s support to Xi for “the goal of the denuclearization of the Korean Peninsula, the faithful implementation of the joint statement produced in its summit with the US in Singapore, and the pursuit of a peaceful resolution through dialogue.”

Prior to meeting Kim in Beijing, Xi had urged Trump and Kim to “meet each other halfway” while pledging China’s support for the achievement of peace, denuclearization, and regional stability.  Xi stated to Kim at the summit that “the fundamental issues brought up by the North Koreans are appropriate requests.  We fully agree with the need for the North Koreans’ reasonable interests to be appropriately resolved.  Paying attention to this and dealing with these issues appropriately is the right choice for the related parties.”  Zhang Liangui of China’s Central Party School stated that “before taking the next step and meeting with Trump again, [Kim] would want to consult with China on what to say and how to say it.”

Xinhua reported Kim’s positive comments on China’s economic and social development, and Rodong Sinmun reported that Kim and Xi had “reached an agreement on new plans for expanding and developing high-level mutual visits in various areas.”  Kim reinforced his emphasis on economic development through extensive North Korean media coverage of Kim’s visit to one of China’s oldest pharmaceutical companies while in Beijing.

By the end of January, following North Korea’s former spy chief Kim Yong Chol’s visit to the US to prepare for a second Trump-Kim summit, a 280-person North Korean art troupe led by Korean Workers’ Party Central Committee Vice Chairman Ri Su Yong visited Beijing.  Including the Moranbong band, the art troupe performed in Beijing Jan. 26-28 before many senior members of the Chinese Communist Party leadership, including Xi Jinping and his wife Peng Liyuan.  The Moranbong band had traveled to Beijing with a similar art troupe in December 2015 only to have the concert canceled due to signs that North Korea was preparing for its fourth nuclear test, which subsequently occurred in January 2016.  If the December 2015 concert cancelation marked a humiliating public setback for efforts to recover and stabilize the China-North Korea relationship, the attendance of Xi and many of China’s top leaders at the Jan. 27 concert provided a clear symbolic affirmation of the return to normalcy and close ties between the two leaders.

China-North Korea economic stabilization amid pressure

Chinese and North Korean coverage of the Xi-Kim summit in January did not lay out concrete economic deliverables. But the overall trend of China’s relaxation of economic pressure and reorientation of the China-North Korea economic relationship in recent months has demonstrated Chinese support for North Korean stability.  At the same time, bilateral trade growth continues to face constraints.  For example, the city of Hunchun reportedly traded 100,000 tons less coal and other freight with North Korea compared with the same period in 2018.

Several indications of the change in China’s economic approach to North Korea have emerged amid ongoing sanctions.  First, at the United Nations and in public remarks, China has actively advocated for relaxing sanctions in tandem with North Korean cooperation on denuclearization rather than adhering to the “maximum pressure” approach the US has favored.  This approach has even involved formal expressions of support for gradual, selective lifting of UN sanctions against North Korea to accompany progress on denuclearization.

Second, China has failed to actively enforce UN sanctions measures, including an apparent failure to adequately enforce prohibitions on ship-to-ship transfers of petroleum in China’s Exclusive Economic Zone. The US has continued to exhort China to maintain economic pressure and enforce sanctions on North Korea, including through the subpoena of three Chinese banks in a US criminal investigation of a Hong Kong company for abetting North Korea’s evasion of sanctions.

Third, China opened a new bridge between Jian in China and Manpo in North Korea in April that is well-equipped to handle exchanges of individuals and goods.  This is the fourth modernized border checkpoint between the two countries.  The addition of a state-of-the-art Customs facility expands the capacity of the two countries to pursue bilateral economic exchanges in the event of relaxation of international sanctions on North Korea.

China and South Korea’s post-Hanoi hopes

Chinese and South Korean leaders began the New Year with high hopes for progress on Korean Peninsula denuclearization and peace.  South Korea’s Foreign Minister Kang Kyung-wha called 2019 “the starting year for a full-fledged Korean Peninsula peace process,” while Chinese counterpart Wang Yi projected “a substantive breakthrough on the Korean Peninsula nuclear issue” this year.  During Chinese Embassy celebrations of the 40^th anniversary of China’s reform and opening in January, Ambassador Qiu Guohong supported a “sustainable and irreversible” political solution on the peninsula, noting the increasingly regional and global significance of China-ROK relations.  Seoul welcomed the fourth Xi-Kim summit in Beijing on Jan. 7-9, which propelled the continuation of bilateral coordination among China, the two Koreas, and the United States in the run-up to Trump-Kim talks in Hanoi.  China’s nuclear envoy Kong Xuanyou met South Korean counterpart Lee Do-hoon and Vice Foreign Minister Cho Hyun in Seoul on Jan. 17-18, a day ahead of North Korea’s Vice Chairman Kim Yong Chol’s talks with US Secretary of State Mike Pompeo and Special Representative for North Korea Stephen Biegun in Washington.

The breakdown of the Trump-Kim talks a month later underscored the lack of bilateral trust that Moon has identified as a primary source of the US-DPRK deadlock over who should do what next.  It also challenged Beijing and Seoul’s preferences for incremental and reciprocal measures.  In anticipation of the summit, Foreign Minister Wang Yi on Feb. 1 expressed hopes for “parallel progress” in denuclearization and the establishment of a peace regime.  Moon similarly called for not just “practical denuclearization steps” from Pyongyang but also “corresponding measures” – what North Korea’s wish list would identify primarily as sanctions relief, but has also included an end to the Korean War, open communication channels with Washington, and adjustments to US-ROK military drills.

Although many knew that it was doomed from the start, the Hanoi summit disappointed South Korean observers who expected more concrete results after the symbolic gestures exchanged in Singapore last year.  On the other hand, optimists in Seoul point to positive signals such as the commitment to continued dialogue, mutual restraint, and exchange of clear proposals.  Days after the Trump-Kim meeting, the Chinese Foreign Ministry claimed that “the political settlement of the Korean Peninsula issue is currently at a critical state” as it welcomed a US-ROK decision to forego two annual joint military exercises in favor of smaller-scale drills.

Post-THAAD recovery in China-ROK relations

Taking up his position in Beijing in April, South Korean Ambassador to China Jang Ha-sung promised to enhance bilateral ties to fully facilitate China’s role in denuclearization and peace.  Prime Minister Lee Nak-yon’s visit to China on March 27-30 demonstrated the revival of high-level exchanges since the 2016-2017 THAAD dispute.  Lee held talks with Premier Li Keqiang for the first time since June 2016, and sought global support for President Moon’s peace initiative with North Korea at the Boao Forum in Hainan. On March 29, he oversaw a joint ceremony marking the restoration of the Korean Liberation Army’s general headquarters in Chongqing, where the Korean government in exile eventually settled after being established in Shanghai in 1919.  2019 marks the 100^th anniversary of the April 11 establishment of the Korean provisional government and March 1 independence movement against Japanese colonial rule.

South Korean Prime Minister Lee Nak-yon attends the Boao Forum for Asia in Hainan, meets China’s Premier Li Keqiang. Photo: Yonhap News

ROK Army Chief of Staff Gen. Kim Yong-woo’s visit to Beijing and Shanghai on March 20-23 affirmed the resumption of bilateral military exchanges.  Kim met People’s Liberation Army (PLA) Ground Force Commander Gen. Han Weiguo and other Chinese defense officials, and visited a memorial hall for Korean independence fighter Yun Bong-gil in Shanghai.  Working-level talks on exclusive economic zones (EEZs) in Xiamen were also held in January.  Amid ongoing clashes over EEZs, China’s incursion into South Korea’s air defense identification zone near disputed Ieo Island in February highlighted brewing tensions over overlapping air defense identification zones between China, South Korea, and Japan.  The regular appearance of Chinese vessels on the South Korean side of the designated midpoint marking the respective EEZs in recent months has stimulated a quiet South Korean consultation with its US ally on counterstrategies for dealing with a more assertive China in the maritime sphere.

Rather than the economic repercussions demonstrated by the THAAD dispute, Seoul’s most important motivation for avoiding conflict with China is the implementation of Moon’s inter-Korean projects.  The Chinese company managing North Korea’s Rajin Port reportedly sought investment from Busan Port Authority last fall amid debate over the future of sanctions.  In April, Representative Lee In-young of South Korea’s ruling Democratic Party led the National Assembly’s Special Committee on Inter-Korean Economic Cooperation on a five-day tour of Chinese and Russian border areas with North Korea.  But the international sanctions on North Korea remain the key sticking point in Seoul’s inter-Korean and cross-border development agenda.  As Foreign Minister Kang Kyung-wha suggested at a January press conference in Seoul, prospects for the resumption of major projects like the Kaesong Industrial Complex and Mount Kumgang tour program will be decided “at the North Korea-U.S. bargaining table.”

South Korea fights fine dust “made in China”

Environmental and health challenges have emerged as a major concern in the renewed diplomatic interactions between China and South Korea.  Prime Minister Lee Nak-yon raised the fine dust problem when he met Premier Li Keqiang in Hainan on March 27, and called for regional cooperation on such issues at the Boao Forum.  Amid mounting South Korean public concerns and debate over responsibility, Beijing and Seoul took a series of mitigation and prevention steps this year.  In January, the China-ROK Joint Committee on Environmental Cooperation agreed to set up a joint early warning system on fine dust and recommended a trilateral action plan with Japan.  After talks with Chinese counterpart Li Ganjie in Beijing on Feb. 26, South Korean Environment Minister Cho Myung-rae pledged to promote information and technology exchange through the newly established China-ROK Environmental Cooperation Center in Beijing.  South Korea’s Ministry of Education and National Research Foundation on April 9 also announced plans for joint research with Chinese counterparts on the health impact of fine dust pollution.  A meeting between ROK Industry Minister Sung Yon-mo and China’s National Energy Administration Chief Zhang Jianhua in Beijing on March 28 produced additional measures for reducing emissions, including exchanges between coal-based power plants.

Beijing denies role in fine dust over Korean Peninsula. Photo: Yonhap News

Such agreements support Moon’s comprehensive directives on cooperating with China to fight fine dust air pollution, led by a new agency headed by former UN Secretary-General Ban Ki-moon.  The first meeting of the Special Committee on Tackling Fine Dust on Feb. 15 produced a decision to propose a trilateral agreement on fine dust reduction with Beijing and Tokyo.  South Korea’s National Information Resources Service of the Ministry of the Interior and Safety on Jan. 28 confirmed research findings on China’s responsibility for fine dust over Korea, based on data from the Ministry of Environment and the US National Aeronautics and Space Administration.  Seoul Mayor Park Won-soon in an MBC radio interview earlier that month similarly challenged Beijing’s denial of China’s role in fine dust over the Korean Peninsula.  According to the Seoul Research Institute of Public Health and Environment, pollutants from China are responsible for 50 to 70% of fine dust pollution over the Seoul region.  The Ministry of Environment’s National Institute of Environmental Research claimed that 75% of the country’s fine dust pollution in January was from external sources, mostly China.

Protectionist pressures challenge China-South Korea trade

South Korean exports to China grew by 14.2% to $162.2 billion in 2017-2018, contributing to a 5.5% increase in exports, according to the ROK Ministry of Trade, Industry and Energy.  Overseas direct investment in China also surged by 48.9% to $4.77 billion in 2018, while overseas investment grew 11.6% to $49.78 billion.  China’s increased infrastructure spending under Xi’s Belt and Road Initiative appears to be especially benefiting South Korean companies in the Chinese excavator market.  The number of China sales of South Korea’s biggest construction equipment maker Doosan Infracore jumped 44% in 2017-2018, while that of Hyundai Construction Equipment Co. tripled.

Although South Korea’s annual exports exceeded $600 billion in 2018 to make it the world’s sixth biggest exporter, Industry Minister Sung Yun-mo pointed to an unfavorable business environment of US-China trade tensions and slowing growth in major economies.  The Korea Institute for Industrial Economics and Trade forecast a 3.7% increase in South Korea’s exports in 2019, suggesting slowing export growth.  South Korea’s Industry Ministry in January revealed plans to work with local exporters to address Chinese and US trade barriers as it faced anti-dumping investigations by China in more than a dozen product categories that month.

At the regional level, China and South Korea held the 15^th round of trilateral trade talks with Japan in Tokyo on April 9-12.  Focused on advancing a free trade deal that has made limited progress since talks launched in 2012, the meeting reinforced China’s broader efforts to pursue regional trade deals amid tension with the US.  Earlier that month, the finance and central bank deputies of the ASEAN Plus Three met in Chiang Mai ahead of high-level regional financial talks in Fiji in May.   The post-THAAD recovery has also lifted clouds over China-ROK exchanges at the local level.  Guangdong Gov. Ma Xingrui led a business delegation to Seoul in April for talks with Seoul Mayor Park Won-soon on economic cooperation. Ma mistakenly presented Park a surprise gift – a portrait of Gyeonggi Province Gov. Lee Jae-myung.

Seoul Mayor Park Won-soon and Guangdong Gov. Ma Xingrui hold economic cooperation talks in Seoul. Photo: Yonhap News

Chinese views on the Post-Hanoi impasse and next steps with North Korea

The US-DPRK Hanoi summit failure was as much a surprise to China as any of the parties, particularly because China urged both sides to meet each other halfway and make a deal back in January.  The summit failure immediately produced media speculation that Kim might seek to meet Xi for a debriefing as part of his 60-hour plus return train ride to Pyongyang.  But the lack of good news made the prospect of such a meeting awkward for both sides, so Kim proceeded directly back to Pyongyang to a warm welcome and declarations of success. It took several days for the North Korean media to adjust its tone, admit the failure of Hanoi, and to lay the blame for that failure on the United States.

China’s stocktaking post-Hanoi involved hopeful encouragement for both sides to continue dialogue, alongside frustration that more was not accomplished. China’s Foreign Ministry spokesperson stated immediately following the Trump-Kim summit failure that “we hope North Korea will continue dialogue, move in the same direction, truly accommodate each other’s legitimate concern on the basis of mutual respect, and promote the political settlement process of the Korean Peninsula issue.”  The spokesperson advocated that “the two sides should consider the issues of the lifting of sanctions and non-nuclearization and resolve them at the same time” and called for a flexible UN Security Council response on relaxing sanctions for North Korea.

The United States has continued to seek China’s assistance in applying pressure on North Korea to achieve denuclearization, but the China-US tariff war negotiations limited bureaucratic efforts for both sides to treat North Korea as a rare issue of limited common interest amid rising competition in the overall relationship.

Chinese public commentary on the aftermath of the Hanoi summit appears to have been limited due to the delicacy of the diplomatic situation.  But China’s interest in playing an indispensable role in pursuing a stable pathway toward denuclearization and peace on the Korean Peninsula remains constant.  The Global Times stated that “No power should disrupt the reconciliation process on the peninsula.  China will never accept any retrogression. This is our bottom line to which we will firmly stick.  We hope South Korea will continue to cooperate with us. The United States and North Korea shouldn’t frustrate the whole region and the international community.”  There is speculation that Xi will visit Pyongyang and Seoul in conjunction with the G20 Summit to be held in Osaka in June.

Conclusion: regional and domestic factors in China-Korea relations

The failed second round of Trump-Kim talks in February raised three implications for regional diplomacy on the Korean Peninsula.  First, it suggested that there might be growing pressure on Washington for more flexibility on Pyongyang, especially given the Moon administration’s current inter-Korean initiatives in coordination with China.  South Korean officials have denied any divergence between Washington and Seoul on the preferred scope and implementation of denuclearization.  As Foreign Minister Kang indicated in January, the US-ROK alliance remains the foundation for the diplomatic drive on the Korean Peninsula.  But she also noted the need to diversify regional partners, echoing Moon’s aspirations in his March 1 address to play an autonomous role in shaping South Korea’s strategic environment.

Second, the failure in Hanoi raised concerns over the influence of domestic politics.  South Koreans hope to avoid the entanglement of nuclear talks in US domestic politics ahead of the 2020 US presidential elections, as suggested by Washington’s revived hardline stance in Hanoi.  U.S. domestic priorities already loomed over the Trump-Moon summit in April.  Domestic pressures also play a role in South Korea, where Moon is championing inter-Korean initiatives as a new engine for revitalizing the South Korean economy and overcoming falling public support.  Moreover, Moon’s outreach to North Korea is increasingly challenged by deepening domestic polarization and backlash against his domestic political reform efforts in the run-up to the April 2020 National Assembly elections.

Third, the no-deal summit outcome in Hanoi left undetermined the extent to which the Korean Peninsula’s future will be shaped by limited China-US cooperation or emerging China-US rivalry.  Both the US and North Korea will continue to rely on China’s cooperation as one of the factors likely to shape the next steps in US-North Korea negotiations on denuclearization.

Chronology compilation and research assistance provided by Michael Strickland, San Francisco State University