Washington — Some Asia experts are calling for tough new economic sanctions on China, arguing that the nation’s economic downturn makes it particularly vulnerable to pressure to crack down on North Korea’s ability to make and launder money for its nuclear weapons and missile programs.
Other analysts argue the opposite, saying new sanctions now would make Beijing less receptive to U.S. efforts to get it to help curb Pyongyang’s weapons programs.
“Beijing is worried that a long or deep recession would lead to political unrest,” and “that worry gives Washington greater leverage over Beijing — leverage that it didn’t have during the period of strong Chinese economic growth,” said Joshua Stanton, an attorney based in Washington, D.C., who helped draft the Sanctions and Policy Enforcement Act in 2016.
The International Monetary Fund (IMF) predicted in a report last month that China’s economy will slow from 5.2% GDP growth in 2023 to 4.6% this year, further declining into 4.1% in 2025.
China’s manufacturing activities contracted for the fourth consecutive month in January and the country is further troubled by soaring debt in the property market and local governments.
In an email to VOA last Friday, Stanton said the Biden administration should “increase pressure on a central government that fears any regional recession” and “designate canneries and sweatshops that employ North Korean labor.”
Chinese factories are known to employ North Korean laborers and label products they manufactured as made in China. Approximately 3,000 North Koreans working illegally in China staged a violent protest in January over unpaid wages, according to Reuters, citing South Korea’s intelligence agency.
In 2017, the U.N. Security Council passed a resolution urging countries to repatriate all North Korean workers by December 2019 to curb Pyongyang’s ability to make income abroad that supports its weapons programs. North Korean workers remit most of their overseas earnings to the regime.
Stanton argued that Washington should also “apply enhanced scrutiny to local bank branches in Chinese cities” that launder money for North Korea. “China always promises to cooperate if we don’t sanction its banks, but it always breaks those promises,” he said.
China been tightening regulations on its banks that deal with Russia recently in response to strengthened U.S. sanctions on financial institutions that work with the Russian military.
Anthony Ruggiero, a senior fellow at the Foundation for Defense of Democracies, dismissed the Biden administration’s current North Korea sanctions as “weak and ineffective.”
“The administration should target North Korea’s revenue generation and Russian and Chinese banks, entities, and individuals aiding Pyongyang’s sanctions evasion,” he said.
David Asher, a senior fellow at the Hudson Institute, said North Korea still works “largely via China” to finance and acquire high-technology products for its military and weapons of mass destruction (WMD) programs.
Asher, who oversaw the disruption of North Korea’s illegal trading and WMD networks during the George W. Bush administration, said last Saturday via email that there is a “robust” criminal sector in China, “especially Macao and Hong Kong, where North Korean elites continue to launder money including billions of dollars generated via cybercrime.”
But other experts are warning against sanctioning China, especially when its economy is slowing, and the U.S. is trying to get Beijing’s help to curb to North Korea’s missile launches.
“You can twist the knob on China and try to enforce more pain in return for its support on North Korea,” said Ken Gause, senior adversary analytics specialist at the Center for Naval Analyses, in a telephone interview on Friday.
“But that will blow up in your face because then, China would see us actively trying to harm China to get it to do something on North Korea.”
He continued, “China will not react very well to that, and we could actually make the situation much worse.”
He added that “the only way sanctions would work” is when there are “overlapping U.S. and Chinese strategic equities.”
Gary Samore, former White House coordinator for arms control and WMD during the Obama administration, agreed during a telephone interview on Monday that the Biden administration may be concerned that sanctioning Chinese entities would make Beijing “less likely to cooperate on diplomatic efforts.”
Samore, who is currently professor of the practice of politics at Brandeis University, added that even if some Chinese entities stopped doing business with North Korea because of sanctions, there could be other Chinese entities that would be willing to work with North Korea.
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