China has more leverage on North Korea than it lets on

Gordon Chang:
... the Chinese have a stranglehold over the North Korean economy. China accounts for more than 90 percent of the North’s external trade. It provides more than 90 percent of North Korea’s oil, much of it on concessionary terms. Some years, China is the source of 100 percent of the North’s aviation fuel.

China supplies at least a third of the North’s foodstuffs.

Investment from China, from both government and private sources, accounts for at least half of total foreign investment in the North.

Chinese leaders “could stop North Korea’s economy in a week,” Senator John McCain told MSNBC’s Greta Van Susteren last March. “China is the one, the only one, that can control Kim Jong-un, this crazy fat kid that’s running North Korea.”

Insults aside, McCain is right. By shutting off the oil, closing the border, and prohibiting all investment, China could bring the North to its knees in months, maybe weeks.

And there is something else Beijing can do. Over time, the renminbi, or yuan as the Chinese currency is informally known, has become the currency of choice in unofficial markets throughout the North and in the areas bordering China.

This “yuanization” creates a vulnerability for the Kim regime. Beijing could collapse the North’s economy if it took its existing notes out of circulation and replaced them with new ones, exchangeable only in China. By doing so—demonetizing—Beijing would instantly destroy much of the wealth in North Korea’s most productive sector.

China’s power over North Korea is not limited to economics, of course. Beijing is Pyongyang’s primary backer in diplomatic councils, particularly the U.N.

Moreover, the Chinese supply equipment to the Korean People’s Army and components for its nuclear weapons and ballistic missile programs. North Korea’s solid-fuel missiles—the ones tested on August 24, February 12, and May 21—appear to be based on China’s designs. Chinese enterprises supply the mobile launchers that make Kim’s missiles a real threat.
There is more.

I think Chang is right.  It never made much sense to me that they could not do much more than they have.  The Chinese could also cut off the parts that North Korea uses to manufacture its missiles and nukes.  They play this weakness card because they like the fact that North Korea causes trouble for the US.  They are like Russia in that regard,  They both want to take steps to weaken the US and cause it to have to expend a greater effort to achieve its objectives.


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