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Friday, March 3, 2017

An alternative look at China/North Korea

Last week I posted a STRATFOR article on China moving to "put North Korea in its place." The regular readers and my friends know I've been intersted in North Korea for decades and their ability to survive in spite of incredible isolation. Also, if ever there was a 1984 nation on earth, this is it. I remember reading an interview with Europeans who visited the nation and the population is unaware that man arrived on the moon. One doctor who spent a year there determined the average North Korean was three inches shorter than the average South Korean because of malnutrition.

Now this is interesting. I remember writing a paper on North Korean cyber-warfare and how their facilities are housed in China. China is very interested in keeping the West, particular the United States, off balance and NK cyber attacks help in that effort. And obviously China will allow North Korea to keep operating in China, as long as they serve a purpose.

From Foreign Policy, an interesting article:
Confidential U.N. Report Details North Korea’s Front Companies in China

A maze of shadowy businesses allows Kim Jong-un to evade sanctions and experts say there's no way Beijing doesn't know.

When China announced last week plans to cut off imports of coal from North Korea, a vital source of revenue for the cash-starved Hermit Kingdom, it fueled optimism that Beijing may be getting serious about reining in its erratic neighbor.

But an unpublished U.N. report obtained by Foreign Policy that documents sophisticated North Korean efforts to evade sanctions shows that China has proved a fickle partner at best in Washington’s effort to stymie Pyongyang’s nuclear ambitions...

...North Korea “is flouting sanctions through trade in prohibited goods, with evasion techniques that are increasing in scale, scope and sophistication,” according to the report compiled by an eight-member panel, which is chaired by a British national and includes experts from China, Russia, and the United States. The North Korean schemes are “combining to significantly negate the impact” of international sanctions.

China, despite its apparent cooperation of late with international efforts to sanction North Korea, has instead served as Pyongyang’s economic lifeline, purchasing the vast majority of its coal, gold, and iron ore and serving as the primary hub for illicit trade that undermines a raft of U.N. sanctions that China nominally supports, the report’s findings suggest.

As early as December 2016, China had blown past a U.N.-imposed ceiling of 1 million metric tons on coal imports, purchasing twice that amount. China then shrugged off a requirement to report its North Korean coal imports to the U.N. Security Council sanctions committee. When U.S. and Japanese diplomats pressed their Chinese counterpart for an explanation in a closed-door meeting this month, the Chinese diplomat said nothing, according to a U.N.-based official.

North Korean banks and firms, meanwhile, have maintained access to international financial markets through a vast network of Chinese-based front companies, enabling Pyongyang to evade sanctions. That includes trades in cash and gold bullion and concealing financial transactions behind a network of foreign countries and individuals, allowing North Korea to gain ready access to the international financial system, as well as to banks in China and New York. North Korea’s business “networks are adapting by using greater ingenuity in accessing formal banking channels as well as bulk cash and gold transfers,” the report found.

There is no direct evidence that the Chinese government is actively supporting North Korea’s sanctions busters.

But William Newcomb, a former member of the U.N. sanctions panel on North Korea, said it is hard to believe China is unaware of the illicit trade.

“You have designated entities that have continued to operate in China,” he told FP. “It’s not an accident. China’s security services are good enough to know who is doing what” inside their country...

Interesting read all in all. Open source I've read is that the Chinese leadership told the South Korean government, indirectly, that when North Korea collapses they will huff and puff, but they will not invade again if the Americans stay on the south side of the peninsula. We'll see how that works out as North Korea is dying. And it will be a great day when the Kims are hanged from the capital in Pyongyang.

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