By: Our Correspondent

China has been playing a careful and relatively sophisticated strategic game with its unruly ally North Korea, attempting to harness Pyongyang’s determination to expand its nuclear capability while at the same time expanding its economic relations at an unprecedented pace, according to a new analysis by the Stockholm International Peace Research Institute. The 80-page analysis, titled China’s North Korea Policy: Economic Engagement and Nuclear Disarmament, was written after a four year study of relations between the two countries by Mathieu Duchâtel, head of SIPRI’s China and Global Security Project, and Phillip Schell, a Researcher with the SIPRI Arms Control and Non-Proliferation Program. It describes a level of quiet support for western aims in North Korean than is commonly recognized in the mainstream media. What the situation is now in North Korea is unknown. Earlier this week Kim Jong-Un reportedly sacked and humiliated his uncle, Jang Song-Thaek, long regarded as Kim’s political regent. State TV showed photos of Jang being dragged out of his seat by two officers, an unheard of humiliation for a top official. There have been widespread reports of other executions of formerly high-ranked officials as well over recent weeks. Jang, along with his unnamed associates, was accused of a litany of crimes last Sunday including corruption, womanizing and selling off state assets at a knockdown price. Those events leave tea leaf readers on the North completely in the dark. It is also unknown how China is treating the latest developments. In the past, China has sought to keep some leverage over the north, supporting United Nations Security Council resolutions sanctioning Pyongyang, pushing the North to accept the Six-Party Talks and seeking to restart the denuclearization process. According to the SIPRI report, China in 2009 “returned to an approach that prioritized the bilateral relationship, with the immediate goal of stabilizing North Korea in a period of strategic uncertainties. The subsequent and unprecedented expansion of China–North Korea economic relations further influenced and complicated the strategic equation on the Korean peninsula.” Beijing’s moves over the past four years would suggest that support for the North’s economic development is a key element of its strategy, although it has never been elevated to the rank of a formal policy guideline. “On the one hand, China’s economic engagement is most probably intended to consolidate its strategic position and leverage over North Korea,” the authors note. “On the other hand, it proceeds on the assumption that economic strangulation by the international community would have no impact on North Korea’s nuclear program, which would be protected by the regime even in case of a new famine. Despite signs that the economic relationship is still developing, albeit slowly after the nuclear test earlier this year, Chinese policy priorities now appear more focused on the resumption of the Six-Party Talks and on providing assurances to the international community that progress is being achieved on better enforcement of UN Security Council sanctions. Since China’s own government transition in November 2012, the new leadership has given no public sign of high-level political support for deepening economic ties. But the development of northeastern China and, over the long term, the shaping of an environment conducive to stability and nuclear disarmament on the Korean peninsula are the two main factors underpinning China’s economic engagement with North Korea. However, the report continues, “a number of factors may converge and lead to a resumption of high-level support by China in the near future, including the stalemate on the Six-Party Talks, North Korea’s emphasis on economic growth, the interests of China’s north-eastern provinces, and the perception that targeted UN Security Council sanctions should be balanced by economic support.” One of the risks of Chinese economic engagement is that it may enable North Korea to further develop its military capabilities and increase its procurement and proliferation activities. However, most Chinese analysts on the Korean peninsula argue that greater economic exchanges can serve the dual purposes of nonproliferation and nuclear disarmament. “At the same time, China appears to be re-examining the role of sanctions and pressure in addressing North Korea. There are now signs that China’s policy—which increasingly balances elements of pressure with political and economic inducements—is becoming more integrated in a general Chinese non-proliferation strategy.” There appears to be a clear policy adjustment going on in Beijing. While they don’t necessarily presage a fundamental change, and they may be temporary and reversible, they are a basis on which China can play a greater role to address risks of nuclear proliferation emanating from North Korea’s nuclear weapons program, the authors say. While denuclearization still appears to be China’s foreign policy goal, it seems increasingly out of reach in the short term. With the nuclear status of North Korea enshrined in its constitution, “it is now evident that the nuclear program is a non-negotiable strategic goal for North Korea, rather than something that can be bargained away.” Between the North’s second and third nuclear tests, a new development took place – an unprecedented expansion of economic relations. Former Chinese Premier Wen Jiabao visited Pyongyang in October of 2009, the first visit of a Chinese prime minister in 18 years, signaling a definite policy adjustment. China returned to an approach that prioritized the bilateral relationship with the immediate aim of stabilizing the north in a period of strategic uncertainty. China had already had reports of Kim Jong Il’s poor health. Despite the North Korean leader’s death in 2011 and the power transition to Jong-un, “there has been complete continuity in the development of North Korea’s nuclear weapon program.” China, the authors write, “has played an important diplomatic role in trying to curb the North Korean nuclear program. In addition to supporting UN Security Council resolutions sanctioning North Korea, from 2003 the Chinese Government hosted the Six-Party Talks—an ambitious multilateral negotiation framework under which an agreement to dismantle the North Korean nuclear program was reached in September 2005.” Despite the North’s refusal to continue the talks, China is still trying to restart the process. It has also taken other steps to persuade the north back to the table and to refrain from proliferation, although these efforts have never been made public. Chinese officials don’t argue in public that they support Deng Xiaoping-style reforms. Nonetheless, Beijing has over the past four years taken steps suggesting that reform is now a key policy element. “The goal of this support can be debated in the light of a set of broader questions regarding Chinese policies: To what extent does China still see North Korea as a buffer against the USA and its allies? Is China merely trying to build political influence through increased and deepened economic exchanges? Or, on the contrary, is North Korea a strategic liability that would endanger many of China’s interests without Chinese economic support?” China’s economic engagement most likely mixes these approaches. On the one hand, it consolidates China’s strategic position and leverage over North Korea. However, the long-term sustainability of China’s economic engagement can be debated. First, this policy was adopted in reaction to the risks of instability during the North’s political succession. Second, the authors note, “market realities limit the amount of support that China can provide to North Korea, as there are extremely few opportunities to invest.” As a result, according to official Chinese sources, bilateral trade was only worth $6 billion in 2012 and Chinese foreign direct investment (FDI) less than $1 billion (although the reliability of these figures is uncertain and some exchanges might be unreported). “Finally, despite signs that the economic relationship has still been developing, albeit slowly, since the 2013 nuclear test, Chinese policy priorities have focused more on the resumption of the Six-Party Talks and on providing assurances to the international community that progress is being achieved on better enforcement of UN Security Council sanctions.”