China’s illegal oil trade with N. Korea fuels Kim’s missile programme

China’s illegal oil trade with N. Korea fuels Kim’s missile programme

By Monika Chansoria | 13 January, 2018
Economic assistance provided by China to N. Korea accounts for nearly half of China’s overall foreign aid. China is largest foreign direct investor in N. Korea.

As North Korean dictator Kim Jong-un continues to push Northeast Asia towards increasingly mounting strategic turmoil owing to its sequential nuclear and missile tests, the involvement of China in covert oil trade with North Korea is gaining headlines again. This only buttresses the need to push for an intently focused debate, regionally and beyond, on the long-standing clandestine oil trade existing between Beijing and Pyongyang—blatantly in violation of UN sanctions.

The reported illegal oil transfers further raise serious questions over Beijing’s laxity in enforcing latest UNSC Resolution 2375, which reduces up to 30% of oil provided to North Korea. An annual cap of 2 million barrels per year of gasoline, diesel and heavy fuel oil has been imposed on the North.

Even as ship-to-ship transfers of banned goods destined for North Korea remains banned, a highly questionable data released by Chinese Customs towards the end of 2017 showed no exports of oil products to North Korea. The Foreign Ministry of China further tried perplexing the issue by arguing, “Only ships specifically been targeted with sanctions could be construed violating… If these ships are not on the list, how can we be sure they are violating…?” Regional authorities in China are suspected of being involved in unlawful oil trade with North Korea, as Kim Jong-un frantically attempts to stockpile fuel that can be counted upon during upcoming summer and fall.

Hong Kong-registered ship Lighthouse Winmore, chartered by a Taiwanese company Billions Bunker Group Corp., which reportedly transferred oil to a North Korean vessel in international waters, underscores the larger ploy at keeping the nuclear brinkmanship strategy of Kim Jong-un thriving to suit regional geo-strategy and power-play. Investigations have revealed that a Chinese national was helped in this particular incident in the transfer of oil to “another ship”—being “unaware” that the vessel’s final destination was North Korea.

The spotlight fell further when US President Donald Trump accused China of violating sanctions meant to halt North Korea’s nuclear and missile programme. Trump stated in no uncertain terms regarding China’s illegal transfer of oil to Pyongyang. The contention put forth by many Chinese academics and analysts that Pyongyang’s nuclear ambitions cannot be stifled any longer through sanctions is a proposition fraught with danger. The regional players should take cognizance of this approach undertaken by China, since it suggests that any amount of sanctions can never be enough to stop the escalation of regional instability caused by Kim Jong-un. With North Korea’s reliance on imported fuel that is central to keep its troubled economy and livelihood running, China’s aid and role remain the spine of Kim Jong-un’s prohibited nuclear and missile activities.

China’s illegal oil transfers raise questions over Beijing’s laxity in enforcing UNSC Resolution 2375.

Fuel transfers and trade in the Yellow Sea, oil being smuggled to North Korean vessels, and China’s role as Pyongyang’s main benefactor, are facets that have been known and debated for long. Food and oil aid, along with industrial machinery being provided to Pyongyang, has been instrumental in keeping the nation and the Kim regime afloat for decades. The economic assistance provided by China to North Korea accounts for nearly half of China’s overall foreign aid, and it remains the largest foreign direct investor in North Korea, accounting for more than 90% of North Korea’s total trade.

Besides, China’s connect with the Workers’ Party of Korea needs to be critically evaluated, as details of the fuel transfers emerge and get investigated. Although the Chinese Communist Party’s international department accepts “continuing” exchanges, communication, and dialogue with the ruling Workers’ Party, it does not provide any further information on when was the last time that the department’s head, Song Tao, met with North Korean officials.

Apart from being Pyongyang’s chief patron and sponsor, the PRC is also its closest ally, with political objectives driving the relationship predominantly. The opacity of this relationship can be judged by the fact that Beijing provides all aid directly to Pyongyang by sidestepping the role of the United Nations. Understandably, Beijing would push all limits, as it has been for all these decades, to avoid a regime collapse. This would result in the potential dissolution of the buffer existing between China and South Korea, which hosts nearly 29,000 US marines. The scenario theoretically places American troops along the 880-mile border with China, which would be totally unacceptable to Beijing and the Chinese Communist Party.

Beijing’s predicament is that in case it withdraws support to Pyongyang completely, the regime’s survival is near impossible, and Beijing’s current leverage to wield influence in Pyongyang would stand at risk. China remains the pivot at which the Northeast Asian security situation hinges, and shall continue to, till the time China continues its covert support in providing aid to the Kim regime.

Dr Monika Chansoria is a Tokyo-based Senior Visiting Fellow at The Japan Institute of International Affairs (JIIA).

 

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