China’s North Korea Policy: Backtracking from Sunnylands?

In recent months, China has affected a sterner disposition toward North Korea, reflecting growing frustration with its errant neighbor. But despite Chinese President Xi Jinping’s stronger rhetoric on denuclearization during his summit discussions with US President Barack Obama at Sunnylands, Beijing’s policy is still based upon the strategic priorities of, in descending order, “no war, no instability, no nukes” (不战、不乱、无核). As soon as Xi made his statement, Chinese experts began to backpedal.[1] Chinese government analysts insist that Beijing has not changed its priorities with regard to North Korea and are surprised that outsiders believe otherwise.

To understand China’s policies towards North Korea and their potential for change, it is crucial not to mistake bolder rhetoric and the public debate—online, in the media, and in academia—for a lasting shift in state policy.[2]

Outwardly, Chinese policy towards the DPRK appears to be in a state of deepening uncertainty. Since the DPRK conducted its third nuclear test in February 2013 and issued belligerent statements throughout the spring, Beijing has used bolder rhetoric, allowed a vibrant domestic debate about North Korea, and supported a UN sanctions resolution.[3] Last week, Xi Jinping and the leader of North Korea’s archrival, South Korea, discussed the importance of denuclearizing the North.[4] Satirical jokes about Kim Jong Un abound on the Chinese Internet, uncensored. Chinese strategists have expressed the need to dilute the ideological and sentimental factors in PRC-DPRK bilateral relations to achieve “normal state-to-state relations.” Many Chinese policy experts agree that China should recalibrate its North Korea policy to better serve its own national interests. In the words of one analyst, “China should righteously say ‘no’ to North Korea’s irresponsible behavior that threatens regional peace and stability.”[5]

These developments, however, do not signal a fundamental change in China’s North Korea policy. Its primary concern on the Korean peninsula remains preventing armed conflict, with avoiding large-scale unrest and/or regime collapse as a close second. Although still nominally unacceptable, a de facto nuclear North Korea strategically aligned with China is easier for Beijing to stomach.

China’s moves have been tactical and short-term, not strategic and lasting; they have not altered that array of priorities. While a fundamental adjustment of Chinese policy on North Korea remains possible in the long term, such a shift is not likely in the near future. Although North Korea’s nuclear tests and repeated provocations have damaged Chinese national interests, Beijing still feels that it benefits by keeping the Kim regime afloat. For all its rhetoric about denuclearization, Beijing is still not willing—nor does it feel able—to implement punitive measures that might push North Korea to relinquish its nuclear weapons. The consensus view in Beijing is that even if it took punitive measures, they would not succeed in forcing North Korea to abandon its nuclear weapons.[6]

Beijing’s motive rather has been to convey disappointment with Pyongyang in order to deter provocations, which China believes could drive the US to upgrade regional missile defense deployments and step up military exercises in the region. China is also keen to deter Japan and/or South Korea from developing their own nuclear weapons capabilities. But Chinese analysts say their government wants to establish certain norms of behavior and to bring North Korea back to talks, not abandon it or precipitate a change in its regime.

These gestures of ire may be significant on their own terms, but some foreigners misinterpret Beijing’s public displays of anger towards Pyongyang as indications of policy change. This anger—while real—is qualitatively different from that of the US, ROK or Japan. Chinese analysts often refer to the DPRK as China’s unruly little communist brother. Such a metaphor captures multiple layers of Beijing’s complex attitude. First, it means Beijing still holds a certain affinity towards the DPRK. A disobedient brother is to be disciplined but not abandoned or turned over to the police. This metaphor also captures the deep-seated belief amongst Chinese policymakers that, with time and careful diplomacy, the errant brother can still be coaxed onto the correct path: a trail blazed by China’s model of ‘opening up and economic reforms’ first unveiled by Deng Xiaoping.

In order to realize this objective, Beijing believes that North Korea’s insecurity has to be alleviated, including by the US adopting a more flexible stance towards talks with Pyongyang. Even when Chinese analysts find Kim Jong Un’s actions out of line, they still empathize with North Korea’s fear for its national security and regime survival.[7] This sentiment has intensified since authoritarian regimes in Iraq and Libya have fallen. Beijing is convinced that the West ultimately seeks the same in North Korea and is determined to thwart such supposed ambitions.[8]

Yet, while Chinese policymakers and establishment commentators seem to agree that Beijing can, at most, mildly rebuke North Korea, there are uncomfortable questions about what that entails. The cost of China’s restraint may be implicitly accepting North Korea as a nuclear state, or tolerating additional war-like acts by the North, both of which would further imperil China’s priority of regional stability.

Another complicating factor for Beijing is that influence over North Korea also provides it with leverage over Seoul and Washington. Chinese analysts have openly wondered whether the US would consider trading support for regional allies embroiled with China in maritime sovereignty disputes in the East and South China Seas—which remain China’s top foreign policy challenges—in exchange for more cooperation on North Korea.[9] If the US tries to “contain China,” one analyst stated, Beijing would feel less “encouraged” to be tough with Pyongyang.

But so far China has avoided pragmatic trade-offs over North Korea. Its aversion to exerting serious pressure on the North is exemplified by Beijing’s repeated attempts to bury the latest round of provocations as soon as possible. In this regard China is following its customary post-provocation playbook for the DPRK. Following Vice Marshal Choe Ryong Hae’s visit to Beijing in May, Chinese diplomats tried to convince the US of meaningful progress when very little was made. They were also extremely encouraged about the “secret” visit to North Korea by Japanese Prime Minister Abe’s adviser, Mr. Isao Iijima, touting it as a significant step. And subsequent to DPRK Vice Foreign Minister Kim Kye Gwan’s Beijing visit last month, the Chinese Ministry of Foreign Affairs (MFA) stated that tensions had definitively eased.[10] On the same day, an MFA-affiliated think tank analyst wrote that the situation on the Korean peninsula had “turned a corner to the bright side.”[11] Another official exclaimed, “Calm has returned to the peninsula!”[12] Diplomats highlight to their US and South Korean counterparts North Korea’s announcement that it would be prepared to have talks with both countries—and are busy trying to convince the US to relax its conditions for the renewal of dialogue.[13] “You cannot open the door and then build a high threshold that still blocks them out,” said one analyst.[14] Some in Beijing believe that Washington’s rigid North Korea policy is as much to blame for heightened tensions as Pyongyang’s actions.[15]

Even though China has expressed more public support for UN sanctions—and this after negotiating to weaken them—its subsequent implementation of sanctions—while better than previous resolutions[16] —remains underwhelming. Although verbally reassuring Western diplomats that China takes sanctions very seriously, Beijing is unwilling or unable to provide any measurable evidence of implementation. At the same time, Chinese officials and experts repeatedly emphasize that sanctions implementation must be proportionate, moderate and aimed only at bringing the sides back to talks, not at undermining or weakening the regime.[17]

One recent move, which garnered significant attention, was the May 7, 2013 Bank of China’s announcement that it was closing the North Korean Foreign Trade Bank accounts. The statement set off speculation that Beijing was finally taking major steps to implement sanctions. But closer examination shows that it was overplayed and China’s actions were more symbolic than substantive. It is unclear whether there was any money in the Foreign Trade Bank’s (FTB) accounts when they were closed. For months already, North Koreans had been limiting their use of major Chinese banks to avoid scrutiny. Third countries are often used for such transactions, as well as provincial Chinese banks, which operate with considerably more autonomy than the larger state-owned banks. Furthermore, most of North Korean trade with China skirts the banking system altogether by engaging in cash transactions via trading companies in China, processing payments in the form of gold or gemstones, or even bartering. State trading company activity in particular has increased as a byproduct of sanctions.[18]

The US had long pressed China to take direct measures against the FTB. It had sought multilateral sanctions to do so, but China opposed these at the UN. So in March it unilaterally sanctioned the FTB, with an immediate chilling effect.[19] The Bank of China’s high-visibility move coincided with South Korean President Park Geun-hye’s visit to Washington, where China knew that North Korea was high on the agenda. It is certainly welcome that China’s bigger banks are showing signs of aversion to doing business with North Korea. While financial sanctions have posed additional costs and inconveniences, they have given rise to an array of mechanisms to circumvent them, many through China.

The reality is that Beijing’s lifeline to Pyongyang remains firmly in place. China is critical for North Korea’s economic survival, supplying most of its food and energy imports, with the recent nuclear test leaving trade largely unaffected. According to officials in Jilin province, for a few weeks immediately following the third nuclear test in February, there were more stringent border checks[20] and a slight decline in movement of North Korea-bound goods. Officials claimed that companies were making decisions based on perceived political risk and uncertainty as to how the central government might react. These companies sought and received assurances from Beijing that they should continue business as usual in the border provinces.[21]

Meanwhile, construction of a joint special economic zone on Hwanggumpyong Island has picked up, suggesting that the two countries are moving forward with their so-called Two Islands Economic Zone.[22] New satellite imagery shows that the majority of work in the new free trade area has been completed since the December 2012 rocket launch that led China to support UN sanctions.[23] China’s investment in infrastructure along the North Korea border also continues. In a $6.3 billion project, China is building a high-speed railway outside of Yanji; one of three such plans that aim to bring North Korea closer into China’s economic orbit.[24] Millions of dollars have also been invested in new highways and bridges in the area. In addition, China has approved a plan to build a 61-mile transmission cable connecting Rason to China’s state electricity grid in Hunchun. After Jang Song Thaek visited China last August, China established a 3 billion yuan (about $490 million) fund to invest in North Korea.

In large part due to the robust economic relationship with China, North Korea’s overall economic situation continues to improve despite drastic reductions in trade with South Korea since 2008 and a catastrophic currency reform effort in 2009.[25] Pyongyang continues to show surprising signs of prosperity, while the country posted a trade surplus in 2012.[26]

All of this indicates that Beijing remains committed to both sustaining the country and integrating it more deeply into the Chinese economy. China seeks to buttress the Kim family regime by helping to guarantee its vitality, or at least continued existence, as a buffer against perceived US encroachment in Northeast Asia. It also expects economic interdependence to increase the pressure and likelihood for North Korea to undertake economic reform, which China sees as the ultimate solution to the North Korean issue. Not only does Beijing believe that China’s own experience with “opening and reform” shows that such a process increases the likelihood of state and party survival, but it also fears that reducing economic ties with Pyongyang could lead to a regime collapse.[27] All three Kims have visited China and toured its special economic zones, though the country has nothing to show for it.[28] But China still holds out hope that the penny will drop.

And Beijing has persisted in supporting North Korea despite the strains and souring of ties since Kim Jong Un took power. Things got off to a bad start almost as soon as Kim became leader in December 2011.[29] For all the help China has extended to North Korea over the years, one Chinese strategist lamented, Pyongyang under Kim Jong Un hasn’t even bothered to give Beijing much advance notice before satellite launches or nuclear tests.[30] In addition, Beijing has had to contend with the kidnapping of its fishermen which resulted in a 10-day stand-off in May, embarrassing the leadership by raising questions about its ability to protect its citizens.[31] Some in Beijing believe that under former President Hu Jintao, China was too indulgent with Pyongyang, which led to extravagant behavior—Beijing’s concern is not in that North Korea violated international law so much as it has disregarded China. Since his arrival, Xi Jinping has shown that he has an interest in laying down some house rules with Pyongyang whereby Kim Jong Un doesn’t engage in such provocative behavior without warning and ignoring Beijing’s entreaties.

Chinese analysts point out that Xi Jinping’s father belonged to the same revolutionary generation as Kim Jong Un’s grandfather, Kim Il Sung, yet the young Kim Jong Un has shown little respect for the elder Xi. Particularly in Confucian-influenced cultures, where age and respect go together, it is an uncomfortable dynamic when the 30-year-old political neophyte from a reclusive state continues to defy the 60-year-old seasoned leader of a rising world power. Meanwhile, North Korea remains highly suspicious of Beijing, resenting its larger neighbor the more it depends on it for survival.[32] North Koreans believe Beijing has betrayed the revolutionary cause by turning to capitalism and making deals with the West. As a result of this distrust, North Korea doesn’t even allow China—a defense treaty ally—to observe its military exercises.

While the space for media and experts to argue has expanded, there are precedents—including the 2009 debate between “traditionalists” and “strategists”—which have not necessarily led to policy change.[33] Frustration with North Korea generally reflects a generational divide, with younger people taking to the Internet with stark criticism while older, more conservative citizens still dominate policy circles. Given that China’s youth overwhelmingly view their neighbor with pity and contempt, one cannot rule out how these opinions could alter policy in the longer term. But for now, there is still a disconnect between how the Chinese people feel about North Korea and what their government is prepared to do.

The Communist Party of China’s (CPC) Central Committee’s International Liaison Department, in charge of party-to-party diplomacy, plays a central role in North Korean policy-making.[34] The People’s Liberation Army (PLA) exerts strong influence in the process as well due to the two countries’ shared military history and the national security implications of North Korean policy. The more moderate Ministry of Foreign Affairs has been mostly relegated a subordinate, implementation role. While this might be evolving—witness the first strategic dialogue in June 2013 between Chinese and DPRK foreign ministries—for now, North Korea policy is still dominated by more traditionalist actors. Furthermore, these actors operate in a system characterized by consensus decision-making and overwhelming bureaucratic inertia.[35] China’s recently appointed Foreign Minister has voiced frustration and disdain for North Korea in the past, but his ability to act on those views will be constrained by the weakness of the Foreign Ministry and by his subordination to officials who have a stake going back longer in established policy.

Some Chinese analysts have gone so far as to argue that China’s own identity is tied up in North Korea’s survival. As Beijing works to rebuild the CPC’s legitimacy, it in no way desires a global spotlight—or worse, Chinese public attention—on the failure of a communist regime next door. Alongside the leadership’s own plans for economic reform in China, liberal intellectuals have called for political reform. The CPC fears that a revolution or collapse across the border might cause the Chinese public to further probe its own government. This alarm is compounded by two factors: the growing acceptance by Asian coastal states of the US, primarily due to Chinese assertiveness in maritime disputes,[36] and the perceived “fall” of Myanmar—which not long ago counted China as one of its only friends—to Western political values. China does not want to be surrounded by countries that have transitioned into Western-friendly regimes. So while the absolute value of North Korea as a buffer against the US and its allies—in the age of long-range missiles and US naval dominance—is under debate, North Korea’s viability is still politically important to Beijing.

Beijing still ultimately holds the view that the US and its allies pose a larger challenge to China’s regional strategic interests than North Korea.[37] Chinese analysts are convinced that the US-led bloc is using North Korea as an excuse to deepen its Asia pivot, strengthen regional alliances, expand military exercises and move missile defense and military assets to the region.[38] Chinese officials have told their US counterparts that missile defense deployments in the region are perceived as targets not only against the DPRK but also China. “The Korean Peninsula problem has always been an important tool in the long-term Asia-Pacific strategy of the U.S.,” argued a Chinese analyst. By pegging China as “the main global strategic rival after the old Cold War had ended,” he argues that the US continues to use the North Korea problem as a cover to “wage a new Cold War against China.”[39]

So it is hardly surprising that the primary motivator for adjustments in Chinese rhetoric and messaging towards North Korea has been Beijing’s concerns about US “shows of force” and missile defense measures. But Chinese analysts say these steps—let alone anything more severe—all come with the risk that North Korea feels that it is losing face and retaliates against China or just continues its current provocative path in order to show that it is not a Chinese client. Strategists argue that particularly when PRC-DPRK relations are so weak, applying pressure too heavily could backfire. Some go so far as to say that Beijing will lose all leverage over North Korea the moment it is applied.[40] The Chinese challenge is that the more it tries to extend influence, the more North Korea is at pains to show its independence. It will therefore be many more years before we might see China’s much-anticipated policy shift. Until then, the most we can expect from Beijing is to try to persuade North Korea to control its temper and halt its provocations, if not give up its nuclear program.


[1] Statements by analysts following the Sunnylands summit: “Denuclearization is a long-term objective: getting North Koreans to agree to a renouncement would be a better solution”; “Can the U.S. be more flexible on denuclearization? Can it focus on nonproliferation first, then move towards denuclearization?”; “China doesn’t want to see a nuclear DPRK but does not feel the same urgency as the U.S.”; “While denuclearization is a goal, it will be long-term, and cannot come at the price of stability”; “We need to work on a large package, a macro solution. We should use security guarantees to exchange for abandoning the nuclear program. In the process, we cannot easily persuade the DPRK to abandon weapons grade materials but at least we can ask it to freeze its nuclear programs and activities”; and, “We endorse the goal of eventual denuclearization of peninsula, but frankly in the last seven years the DPRK has come long way in pursuing its nuclear capability.” Author interviews, June 2013.

[2] Claims of a Chinese policy shift have been made by numerous Western journalists, analysts and officials over the last few months. “Former top U.S. official: China getting fed up with North Korea,” Foreign Policy, April 5, 2013; Mark Landler, “Detecting Shift, U.S. Makes Case to China on North Korea,” New York Times, April 5, 2013; “China says ‘very firm’ with North Korea on nuclear program: Kerry,” Reuters, July 1, 2013; “Obama says China getting tougher on North Korea,” AFP, June 18, 2013; Sangwon Yoon and Henry Sanderson, “Chinese and South Korean Leaders in Accord on North Korea,” Bloomberg, June 27, 2013.

[3]By contrast, following the attacks against the Republic of Korea’s Cheonan and Yeonpyeong Island in 2010, China took a lone stance supporting the DPRK and criticizing the US and its East Asian allies for increasing their regional military presence. “China and Inter-Korean Clashes in the Yellow Sea,” Brussels: International Crisis Group Report N°200, January 2011, http://www.crisisgroup.org/en/regions/asia/north-east-asia/north-korea/200-china-and-inter-korean-clashes-in-the-yellow-sea.aspx.

[4] The Xi-Park joint statement didn’t actually mention North Korea: “both sides agree that the development of nuclear weapons by related parties is a serious threat to the peace and stability of Northeast Asia, including the Korean peninsula.” Because the Blue House had initially claimed that Xi had opposed North Korea’s possession of nuclear weapons, it later issued a clarification: “Not included in the joint statement, the two leaders arrived at a mutual understanding that North Korea’s possession of nuclear weapons should not be recognized, and that they should pursue denuclearization of North Korea.” “Government twists language after summit with China,” The National, July 2, 2013.

[5] 陈向阳,“中国应掌握半岛问题战略主动权”,中国现代国际关系研究院 [Chen Xiangyang, “China should control the strategic initiative on Peninsula issue,” China Institute of Contemporary International Relations], April 16, 201, http://www.cicir.ac.cn/chinese/newsView.aspx?nid=4697.

[6] Many Chinese analysts believe that North Korea’s nuclear program is non-negotiable and no amount of pressure could induce Pyongyang to give it up (at least without fundamental unilateral concessions by the US, which are highly unlikely). Of the (much fewer) analysts that believe that denuclearization is attainable, most feel that the amount of pressure required to achieve it would cause destabilization of the peninsula if not regime collapse, both of which are considered worse outcomes than a de facto nuclear North Korea. Author interviews, May, June 2013. Indeed, no country that has tested a nuclear weapon has ever voluntarily given up a nuclear capability absent regime change. Bonnie Glaser, Scott Snyder, See-Won Byun, and David Szerlip, “Responding to Change on the Korean Peninsula: Impediments to U.S.-South Korea-China Coordination,” A Report of the CSIS Freeman Chair in China Studies, May 2010.

[7] One analyst said that in contrast with the US which ascribes DPRK’s belligerent behavior to the “nature of the regime,” the Chinese rather believe that “it’s because of the DPRK’s very troubled external security environment.” He continued, “we think the U.S. should normalize its relations and give the DPRK security assurances.” Author interview, May 2013. Another analyst said that before forcing North Korea to give up its nuclear weapons, “we need to convince the North Koreans that they could enjoy real security without possessing nuclear weapons.” Author interview, May 2013.

[8] “According to the Western perspective, unless the regime is replaced, the nuclear issue cannot be solved.” Author interview, May 2013.

[9] According to one analyst, “If the U.S. wants China to help out on North Korea, can it sweeten the deal? Would it be willing to be more flexible on the East China Sea and South China Sea? For example, would the U.S. ease up on joint military drills with Japan, military cooperation with Japan, and military support to Japan?” Author interview, May 2013. Another was more subtle: “in order to enhance U.S.-China cooperation on the Korean peninsula, one needs to look beyond the peninsula and reassure China that it is not the main target of the rebalancing policy.” Author interview, April 2013.

[10] “Recently tensions on the peninsula have shown positive momentum towards easing. This is the result of joint efforts by all sides. It was hard to come by and should be cherished. We hope all sides cherish and seize the opportunity, insist on dialogue and engagement, increase mutual trust, improve relations, solve relevant problems through dialogue and consultation, push the situation on the peninsula further towards the direction of easing, and create conditions for the Six Party Talks to resume as soon as possible. China is willing to work with all parties to continue to realize the denuclearization of the peninsula and maintain peace and stability on the peninsula and make positive efforts.” (Mention of denuclearization comes at the very end of a long quote). “Foreign ministry spokesperson answers questions on North Korean Vice Foreign Minister Kim Kye-gwan’s visit to China and other issues,” Chinese Foreign Ministry, June 21, 2013, http://www.gov.cn/xwfb/2013-06/21/content_2431566.htm.

[11]Analyst: a Korean Peninsula Peace Mechanism Must be Established,” Xinhua News, (专家:朝鲜半岛事态“峰回路转柳暗花明”《新华社》) June 21, 2013, http://news.xinhuanet.com/world/2013-06/21/c_124887728.htm.

[12] Author interview, June 2013.

[13] Inter alia, Chinese analysts argue that since so much time has passed since the 2005 Agreed Framework, it is not reasonable to continue to insist upon agreements made in that document.

[14] Chinese strategists continue to recommend that the US focus on nonproliferation first, and then move towards denuclearization from there.

[15] According to one analyst, “China wants the U.S. to help maintain regional stability instead of adding oil to the fire. Don’t embolden South Korea and Japan and let them misjudge the situation.” Author interview, April 2013.

[16] A very public example of sanctions violation was the transporter-erector-launchers (TELs) that the DPRK displayed for its Hwasŏng-13 (KN-08) missile during the April 2012 military parade which were made in China. Then in May, 10 metric tons of graphite cylinders were seized on a Chinese ship in Pusan, South Korea when it was determined that they appeared to be missile parts bound for Syria. “Report of the Panel of Experts established pursuant to resolution 1974 (2009),” Doc. No. S/2013/337, June 11, 2013. But China’s implementation record has always been dismal. “China constitutes a large gap in the circle of countries that have approved UNSC Resolutions 1718 (2006) and 1874 (2009) and are expected to implement them.” “Report regarding North Korea Sanction Implementation-II,” Congressional Research Service, October 8, 2010. See Section II.E for information on China’s repeated failure to adequately inspect DPRK land and sea shipments through its territory.

[17] According to one analyst, “When we implement UN sanctions, we need to take into consideration the security concerns of the North Koreans as well.” Author interview, May 2013.

[18] An example from the latest report of the Sanctions Committee involved the “Jing Huan Trade Company Ltd,” based in Dandong, China (with an office in Pyongyang), which had attempted to ship 1,800 brass discs (for use in producing artillery ammunition) to Syria. It was acting as a front company for Korea Ryongbong General Corporation, an entity designated by the UN Committee in April 2009. The UN traced the shipment back to COSCO Logistics, a Chinese freight company in Dalian known to be engaged in the DPRK market. “Report of the Panel of Experts established pursuant to resolution 1974 (2009),” Doc. No. S/2013/337, June 11, 2013. For a comprehensive analysis of the operation of North Korean state trading companies based on interviews with defectors who once worked for them, see John Park, “North Korea, Inc: Gaining Insights into North Korean Regime Stability from Recent Commercial Activities,” USIP Working Paper, April 2009.

[19] The US sanctioned the FTB under Executive Order 13382: Japan and Australia were supposed to as well. US Department of the Treasury Press Center, “Treasury Sanctions Bank and Official Linked to North Korean Weapons of Mass Destruction Programs,” March 11, 2013, http://www.treasury.gov/press-center/press-releases/Pages/jl1876.aspx. Antoni Slodkowski and Warren Strobel, “Japan, Australia to sanction North Korean bank as part of U.S.-led crackdown,” Reuters, March 26, 2013, http://www.reuters.com/article/2013/03/26/us-korea-north-bank-idUSBRE92P04T20130326.

[20] There were additional reports of more stringent border checks. Ben Blanchard, “China Steps Up Customs Checks, but North Korea Trade Robust,” Reuters, April 30, 2013, http://www.reuters.com/article/2013/04/30/us-korea-north-sanctions-china-idUSBRE93T15E20130430. Author interviews, May 2013.

[21] Author interview, April 2013.

[22] China and the DPRK announced an agreement in June 2011 to establish a special economic zone on two largely undeveloped North Korean islands in the Yalu River adjacent to the Chinese border city of Dandong. Despite the fanfare of the announcement, satellite imagery revealed little or no activity at the site for more than a year. “New Construction Activity at the Hwanggumpyong Economic Zone,” 38 North, June 17, 2013, http://www.38north.org/2013/06/hgp061713/.

[23] Ibid.

[24] Jeremy Page, “China builds up its links to North Korea,” Wall Street Journal, June 8, 2013.

[25] Go Myong-Hyun, “Economic Improvement in North Korea,” Asan Institute for Policy Studies Issue Brief No. 58, June 10, 2013.

[26] Marcus Noland, “Hugely important: North Korea running a current account surplus?” North Korea: Witness to Transformation, Peterson Institute for International Economics, March 18, 2013, http://www.piie.com/blogs/nk/?p=9647.

[27] Partly as an attempt to encourage economic reform by doing Pyongyang less favors, China has been increasingly commercializing its relationship with the country by transforming assistance into transactions. For example, in recent years it has been charging market prices for food and oil. See Stephan Haggard, Euijin Jung and Alex Melton, “Is China Subsidizing the DPRK?” (Parts 1 and 2), North Korea: Witness to Transformation, May 29, 2013 and June 5, 2013, http://www.piie.com/blogs/nk/?p=10488 and http://www.piie.com/blogs/nk/?p=10533.

[28] Kim Jong Il feared that instead of leading to Chinese-style economic growth, reform in North Korea would engender an East German-style collapse. In the current political context, even if Kim Jong Un were inclined towards reform—and there are few signs that he is—he would find it almost impossible to deliver the successful economic reform-based growth necessary to compensate for the legitimacy lost by exposing the propaganda. Reforms would require him to abandon the command economy and renounce the very same state ideologies and political legacies of his father and grandfather, which form the basis of his own legitimacy. So instead of genuinely opening up its system, North Korea has engaged in “mosquito net reform,” such as that in Rason and other special economic zones, where the goal is to attract foreign investment without undertaking reform. Stephanie Kleine-Ahlbrandt, “North Korea: Open for Business?” International Peace Institute, January 13, 2012, http://theglobalobservatory.org/analysis/192-north-korea-open-for-business.html.

[29] Stephanie Kleine-Ahlbrandt, The Diminishing Returns of China’s North Korea policy,” 38 North, August 16, 2012, http://www.38north.org/2012/08/skahlbrandt081612/. To great frustration, China has been unable to engage North Korea in a party-to-party strategic dialogue, the establishment of which was intended to be one of the deliverables of the visit of Politburo Member Li Jianguo to the DPRK in November 2012. Author interview, May 2013. Li hand-carried a letter from Xi that is said to have contained a simple message: Do not launch a ballistic missile. Twelve days later, Kim Jong Un did precisely that. Choe Sang-hun and David E. Sanger, “North Koreans Launch Rocket in Defiant Act,” The New York Times, December 11, 2012, http://www.nytimes.com/2012/12/12/world/asia/north-korea-launches-rocket-defying-likely-sanctions.html?_r=2&.

[30] “The advance notice North Korea gives China before its provocations has been getting shorter and shorter.” Author interview, April 2013.

[31] These types of incidents happen often with Chinese boat owners just paying up. One of the differences in this case was the exceptionally high amount of the ransom. After more than ten days, the boat and crew were released through intervention from Beijing, but only after the boat owner took to Chinese social media. “Dandong’s fishing dictionary at gunpoint: boat-sheltering fee, boat-assistance fee, and boat-kidnapping fee,” Southern Weekend (“枪口下的丹东捕鱼词典 傍艇费 帮艇费 绑艇费,”《南方周末》) June 20, 2013, http://www.infzm.com/content/91557. At the time of the incident, the nationalist newspaper Global Times published an editorial calling on Beijing to “lay down rules to North Korea, or risk being seen as ‘a weak government.’” “If China Doesn’t Set Rules for DPRK, it will be accused as ‘Weak,’” Global Times, May 20, 2013, http://mil.huanqiu.com/paper/2013-05/3953088.html.

[32] Observation based on author conversations during five trips to North Korea over five years. Kim Jong Un in particular has been determined to set a course for greater independence from Beijing. Despite the significant economic and political support provided to him by China early in his tenure, he repeatedly rebuffed invitations to visit China, and instead sent high-ranking officials to Singapore, Indonesia, Laos, Vietnam and Myanmar to try to drum up investment. Stephanie Kleine-Ahlbrandt, “The Diminishing Returns of China’s North Korea policy,” 38 North, August 16, 2012, http://www.38north.org/2012/08/skahlbrandt081612/.

[33] “Shades of Red: China’s Debate over North Korea,” Brussels: International Crisis Group Report N°179, November 2009, http://www.crisisgroup.org/~/media/Files/asia/north-east-asia/179_shades_of_red___chinas_debate_over_north_korea.pdf.

[34] Sunny Lee, “Analyst: Who Controls China’s NK Policy?” The Korea Times, May 19, 2011, http://www.koreatimes.co.kr/www/news/nation/2011/05/120_87318.html.

[35] While bureaucratic inertia exists in every government, it is particularly problematic in China. And because China is a collective leadership, Xi Jinping must win consensus from the rest of the Politbureau for any major decisions—which would include changes to North Korea policy.

[36] See “Dangerous Waters: China-Japan Relations on the Rocks,” Brussels: International Crisis Group Report Nº 245, April 2013; “Stirring up the South China Sea (I),” Brussels: International Crisis Group Report Nº 223, April 2012.

[37] In Beijing’s eyes, the US component turns North Korea into a trilateral issue with the Sino-American relationship as the dominant axis.

[38] “The Korean peninsula problem has always been an important tool in the long-term Asia-Pacific strategy of the US,” argued one Chinese analyst. Author interview, May 2013. According to another, “Tensions in Northeast Asia help give the US an excuse to develop missile defense and strengthen its relationship with its regional allies, and contribute to a policy of containment of China.” Author interview, May 2013.

[39] Ren Shengdong, “A Korean Peninsula Peace Mechanism Must Be Established,” China Institutes on Contemporary International Relations, March 29, 2013, http://www.cicir.ac.cn/chinese/newsView.aspx?nid=4630.

[40] Author interviews, May 2013. One Chinese analyst said that the division of labor in dealing with North Korea has been China playing the “good cop” to the US “bad cop.” He said that this heightens uncertainty regarding what kind of reaction they might get from Pyongyang if China also turns to act as a bad cop. Analysts also use the analogy of a cornered animal lashing out. For example, while many argue that North Korea is not suicidal and would never launch a nuclear attack because its regime would be defeated, there is still a fear that if the regime sees itself as doomed or going down, it might want to use its weapons as a “lash of the tail.” Author interviews, June 2013.

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