(By Wang Qilong, Mao Chuan)
Before the China’s President Xi Jinping even had a chance to inspect the troops and the shiny weaponry in a military parade staged to celebrate the 90th anniversary of the inception of the People’s Liberation Army, the big canon of the White House had fired, the second time in one month.
“I am very disappointed in China”, read the tweet from the US President Donald Trump, announcing the end of the Sino-US honeymoon in a not so subtle way.
Donald Trump criticized China for doing nothing to help with the situation in North Korea but “just talk”. China, Trump claimed, “could easily solve this problem”.
North Korea’s threat has become more and more pressing. While the United States is making progress in talks with China on imposing new sanctions after the July 4th missile launch, Pyongyang tested its yet another intercontinental ballistic missile (ICBM) on July 28th.
The latest missile, according to NHK, reached an altitude of about 3,000km, which was about 200km higher than the previous ICBM, and landed about 1,000km from the launch site.
The Korean Central News Agency, quoting North Korean leader Kim Jong-un, said that the country had the ability to fire at “random regions and locations at random times” with the “entire” U.S. mainland now within range.
Donald Trump’s idea – relying on China to force North Korea to make concessions – obviously didn’t work. The Supreme Leader of the US then decided to turn to China for its economic ties with North Korea.
“Trade between China and North Korea grew almost 40% in the first quarter,” Trump tweeted after DPRK conducted the first ICBM test on July 4th.
But his data, wherever he got it, does not match with China’s own data. Statistics released by the Chinese Customs showed trade between North Korea and China rose 37.4% in the first quarter despite a 51.6% year-on-year drop of coal import.
It was not a surprising figure, but it was very embarrassing for China given its claim of fully implementing the UN Security Council’s sanctions all along and cutting off North Korea coal import since February 19th, 2017.
Coal accounts for about half of North Korea’s export earnings from China, making it an important source of foreign currency for Pyongyang. Nonetheless, the growth seems to suggest that bilateral trade between China and North Korea hasn’t lost its steam despite the coal ban.
What is the replacement product of coal that keeps North Korea export growing? The answer may be iron ore – North Korea has exported more iron ore to its neighbor under the UN sanctions.
Although China’s import of iron ore has maintained a rising trend for many years, the imports of North Korean iron ore suffered a big decline in 2015. But this year the decline dramatically improved.
In the first quarter, the number of Chinese iron ore imports from North Korea rose up sharply 231.4% with the same period in 2016 and returned to the level before the crash.
(Source: the General Administration of Customs of PRC. )
And the rising trend seems to continue. Data from the Korea International Trade Association, quoted by Bloomberg, said North Korea had exported an estimated $74 million of iron ore and concentrated to China in the first five months of 2017, 212% year-on-year increase in money terms.
Iron ore imports from North Korea represent only a tiny portion (0.2%) of China’s huge demand. China’s iron ore import dependency currently stands over 80% and the two major sources of iron ore imports are Australia (61%) and Brazil (20%).
“The sanctions imposed by the Council on North Korea’s nuclear-led activities were not a comprehensive embargo,” Huang Songping, the General Administration of Customs spokesman, insisted at the press conference on July 13, the trade with the people’s livelihood in the DPRK should not be affected by sanctions.
But the money from iron ore export to China is vital for Pyongyang as it is the main source of income after the coal ban. Trade with China accounts for 92.5% of North Korea’s total trade volume, according to the Korea Trade Promotion Corporation.
As long as trade between China and North Korea continues to grow, the latter would have little pressure to give up its nuclear program and missile tests.