On U.S.-North Korea Talks, China May Hold the Cards

DANDONG, China — Along the Chinese border with North Korea, the evidence of Beijing’s leverage in the coming talks between President Donald Trump and the North Korean leader, Kim Jong Un, is everywhere.

Footage of China’s president, Xi Jinping, hosting Kim this week plays in a loop on a big outdoor screen here in the city of Dandong, and residents are eager for cross-border trade to resume as sanctions on North Korea are eased. Traders say they are putting in advance orders for coal from North Korean suppliers. Some exporters are already smuggling goods across the border.

“If you bribe the customs officials twice as much as before,” said one businessman who sells machinery for mining, “some of the smaller equipment goes through.”

At a new apartment complex where four 15-story towers are going up, sales have taken off and prices have doubled as buyers — including North Koreans carrying stacks of Chinese currency — snap up studios overlooking the Yalu River, a saleswoman said.

The Trump administration insists it will maintain its campaign of “maximum pressure” on the North until Kim has shown “substantial dismantlement” of his nuclear arsenal. But the buoyant mood in Dandong is a reminder that China, as North Korea’s main trade partner, can decide how strictly to enforce the international sanctions against it.

Beijing has already positioned itself as a critical player that can shape the outcome of the talks, which Trump said will take place June 12 in Singapore. The reclusive Kim has traveled twice in the past two months to China to consult with Xi, notably in each case just before hosting a visit by Mike Pompeo, the new U.S. secretary of state.

The message both times was clear: Kim wants China’s support for his approach to nuclear disarmament — a gradual, action-for-action process in which the North is rewarded for each move it takes toward denuclearization.

Trump’s national security team has urged a faster approach, with a timetable as quick as six months to a year, and economic benefits coming only at the end. In his meeting with Kim this week, though, Xi endorsed “phased and synchronous measures” that would “eventually achieve denuclearization and lasting peace on the peninsula.”

Even as Trump is celebrating North Korea’s release of three U.S. prisoners, China has many reasons to believe it will come out ahead in the coming talks.

For one thing, its leverage over sanctions enforcement means its view on the main issues — the method and pace of denuclearization — will carry weight with both North Korea and the United States. Beyond that, it sees the prospect of progress toward a long-standing security goal: the withdrawal of U.S. troops from the Korean Peninsula.

While he has emphasized the importance of moving quickly, President Moon Jae-in of South Korea has also endorsed an “action-for-action” approach to denuclearization, putting his position closer to that of China and North Korea than of the United States. The joint declaration issued after his summit meeting with Kim last month set no deadline for denuclearization, suggesting the diplomatic momentum is already shifting toward a phased approach.

This could make it easier for the North to reject demands to discard its weapons quickly, forcing Trump to choose between accepting a more gradual process or going home empty-handed despite the expectations he has built before the meeting.

“The obvious risk that America faces in the summit is that Trump makes a big concession to Kim, without getting anything close to full denuclearization in return,” said Hugh White, a professor of international strategic studies at the Australian National University.

If Trump cannot get the big breakthrough he wants in denuclearization, he may try instead to negotiate a treaty to establish diplomatic relations with the North and formally end the 1950-53 Korean War, which was halted by an armistice.

Trump has shown great enthusiasm for signing an official peace treaty with North Korea, a gesture that he has said would be good for everyone.

However, such an outcome might also play into China’s hands by calling into question the need for the nearly 30,000 U.S. troops now stationed in South Korea and the annual joint military exercises that involve even more U.S. forces, which are intended to serve as a deterrent against the heavily armed North.

“An agreement with North Korea which reduced tension, while clearly welcome in itself, could well mark the beginning of the end for America’s long-standing preponderance in Asia,” White said. “And that would be a big win for China.” Already China, which has long propped up the North Korean economy, has shown interest in reviving trading ties with the North.

Chinese experts said Beijing did not plan to flout the sanctions openly at this point. However, China only reluctantly signed onto the sanctions last year and largely at the behest of Trump, who frequently praised it for punishing the North.

Under the sanctions, China has cut exports to the North of refined energy products and stopped importing seafood and coal as well as North Korean laborers, all important sources of foreign exchange for the Kim regime.

Now that North Korea is in play in a larger strategic contest of wills between Beijing and Washington, China is no longer so interested in squeezing the North.

“China has no incentive to punish North Korea anymore,” said Cheng Xiaohe, a professor at Renmin University in Beijing. “Its relations with South Korea have soured. A few months ago, China had a good relationship with President Trump, but now there is a trade war with the United States.”

For its part, South Korea is also keen to prevent the North from slipping too far under Chinese control, even while its current support of a gradualist approach to denuclearization is in line with China’s view. In the joint communiqué released after Kim’s meeting with Moon last month, the South pledged to help the North modernize its railroads and highways.

The recent diplomatic developments have given both China and South Korea “every reason to oppose and disregard new sanctions if the U.S. tries to impose them,” said Bilahari Kausikan, the former head of the Foreign Affairs Ministry in Singapore. Cheng, the professor, said that once sanctions were eased, China could even help rebuild North Korea’s roads and ports as part of its Belt and Road Initiative, Beijing’s signature effort to extend its influence by helping other countries finance large-scale infrastructure projects.

During the Dalian meeting this week between Xi and Kim, the Chinese heaped praise on Kim for declaring that North Korea would now concentrate on developing its economy, where an income of $200 a month is considered upper middle class and a Japanese bicycle is regarded as a luxury item.

Increasing numbers of North Korean businessmen have begun returning to Dandong in the last few weeks, since Kim’s first visit to China at the end of March.

A saleswoman for CNC, a Chinese real estate developer, said North Koreans were lifting the local property market. She said desirable studios with a view of the Yalu River, fitted with imported kitchen equipment, were selling for about $100,000, twice what they fetched when they went on the market two weeks ago.