SMITH BRAIN TRUST – It may be reassuring to think that China, with sheer economic might, could turn some screws on North Korea, bring that country to heel and protect the world from potential aggression. Reassuring, yes, but it's also unrealistic, says Gary Cohen, clinical professor of logistics, business and public policy at the University of Maryland's Robert H. Smith School of Business.
China's economy is important to North Korea. But for China, the issues at play are more political than economic. "China is reluctant to go deeper into sanctions against North Korea for two reasons," says Cohen, a China expert and an associate dean of the Smith School's Office of Executive Programs. The first reason, he says, is that so far sanctions have proved to be of little use.
"Kim Jong-un has demonstrated that he has more concern for himself and his dictatorship than for the people of North Korea," Cohen says. "I don't believe his primary concerns are for the people of North Korea."
The second reason resides along its northeast border. China has concerns about a flood of migrants crossing its border with North Korea, similar to what's been seen with Syrian immigrants fleeing their country, if the economic sanctions become too great and North Koreans become desperate for a better life. "China may have humanitarian concerns about what happens in North Korea," Cohen says. "But also, this is really just something that China doesn't want to have to deal with at their border."
North Korea has been under wide-ranging UN Security Council sanctions for more than a decade, since testing its first nuclear missile in 2006. Steeper sanctions were adopted after a missile launch last year, this time targeting some economic activity not even related to nuclear proliferation. While sanctions may have strained the country's economy and its people, the measures haven't ended North Korea's nuclear program. At most, they may have delayed it.
The latest sanctions were approved last week by the UN Security Council, a fresh effort to starve North Korea of fuel and revenue for its nuclear program. Pyongyang responded days later, firing a missile over Japan. It said this week that the rising international pressure will only serve to accelerate North Korea's nuclear program. It called the new UN sanctions an effort to "physically exterminate" the country's people, system and government.
North Korea has been "incredibly cut off" from the global economy for years, Cohen says, with few trading partners in the developed world. It's hobbled and stunted the North Korean economy, and has left the developed nations with limited leverage.
"It's difficult to use leverage with a leader who just doesn't put his citizens first, isn't it?" Cohen says. "I think China could have a lot of leverage if Kim Jong-un truly cared about the wellbeing of the people of North Korea."
China is North Korea's No. 1 trading partner. China buys coal, iron, seafood and clothes from North Korea. North Korea buys fuel from China. Trade between the two countries peaked in 2014, hitting $6.86 billion. It's a substantial sum for North Korea, but for China, the total represents just a sliver of China's overall trade – less than 0.2 percent.
"Tiny," Cohen says. "But the geopolitical considerations and the humanitarian considerations are huge."
For Chinese President Xi Jinping, it's those considerations that have helped keep trade rolling between the two countries.
"China has to ask itself, 'How much leverage do you have? How much good are you doing? Are you doing more good than harm?' " says Cohen. "I honestly don't know the answer."
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About the University of Maryland's Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.