New Leaders Forum

China’s Awkward Neighbour

There are plenty of things that frustrate China about North Korean behaviour. But don’t expect Beijing to cast it aside.

As with any bilateral relationship, China and North Korea have good reasons to cooperate, but also potential sources of conflict. Conventional wisdom suggests that although China has many issues with North Korea, it still has greater incentives to ensure the survival of the regime. But to get a better understanding of the situation, perhaps it would be better to turn that logic on its head: despite there being an array of reasons for China to support North Korea, what potential problems are there that could deepen the political gap between the two countries?

The potential sources of conflict can be explored on two levels. At the purely bilateral level, China has experienced numerous problems along its border with North Korea. Economic relations, often taken as evidence of China’s vigorous support of North Korea, are also a growing source of friction due to the significant trade imbalance between the two countries. At the international level, meanwhile, North Korea’s increasingly bold military provocations, and its continuing nuclear programme, have adversely affected China’s own reputation. In addition, US alliances with South Korea and Japan have been strengthened as a result of the Kim Jong-il regime’s provocations. China is no doubt extremely frustrated with such developments.

Of course, the border issues between China and North Korea are at times no less messy than those with the 14 other countries that abut China. Still, there are two reasons why the North Korean border sometimes proves particularly tricky.

The first reason is illegal activity involving North Korean government agents. Among other illicit activities, Office 39 of the Korean Workers’ Party is believed to be involved in illegal weapons trading through foreign trading companies, gold smuggling, drug trafficking, and the distribution of so-called super dollars – nearly perfect forgeries of US banknotes. Second, these illegal activities are closely intertwined with one another. For example, massive human trafficking is linked with illegal border crossings by North Korean defectors. The smuggling of contraband, meanwhile, has caused serious corruption problems as it involves officials who are in charge of border management on both sides. In addition, drug trafficking from North Korea is closely connected with China’s criminal organizations not only along the border, but across the entire country.

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The economic dimensions of bilateral relations are also less rosy than they look from the outside. China, which has been North Korea’s chief supplier of aid, trade, and investment, has tried since the early 1990s to lessen the burden of its unconditional assistance by promoting a bigger market-based economy. Yet China’s efforts to turn its ‘special’ relationship with North Korea into a ‘normal’ relationship have been thwarted by North Korea’s dramatic economic decline and its inability to implement meaningful reforms. Also, many Chinese firms that have conducted trade with North Korea have suffered from the unwillingness, or simple inability, of their North Korean counterparts to pay for their goods. On top of this, there’s clearly concern among Chinese scholars that the massive investment that has been made in North Korea just won’t generate the expected returns. After all, any Chinese entity trying to do business with North Korea, whether it’s a state-owned enterprise or private firm, is taking significant risks due to the unpredictability of North Korea’s economy policies. Indeed, North Korea’s currency reforms in 2009 not only brought internal social chaos, but also disrupted its trade with China by causing fluctuations in the exchange rate, further damaging the credibility of the North Korean currency. It’s clear, then, that although China is willing to support North Korea, it remains irritated by the regime’s inefficiency, and is unconvinced of its ability to conduct reforms in the near future.

At the international level, although China tends to defend North Korea from international accusations, this shouldn’t be taken as meaning that China hasn’t grown frustrated with the regime’s reckless behaviour. China has tried to counterbalance South Korean and US hostility toward North Korea in part because it doesn’t want North Korea to feel cornered, or the regime brought to the point of it being at risk from a sudden collapse, which would cause serious instability along China’s border.

However, as North Korea’s provocations have become increasingly bold, the US alliance system in Northeast Asia has also been bolstered. As highlighted by North Korea’s shelling of Yeonpyeong Island last year, North Korean provocations led to stronger military cooperation between the United States, South Korea, and Japan. This trend has certainly had an adverse impact on China’s security environment, a fact that will have forced serious consideration in Beijing over its balancing act of protecting North Korea while maintaining regional stability. Beijing may well feel motivated to pressure North Korea not to engage in another provocation. The question is whether China will do so—or has done so already—openly or secretly.

Pyongyang will, for its part, be aware of all this, and so knows it can’t merely trust in Beijing’s unconditional goodwill. The North Korean leadership felt betrayed when China normalized diplomatic relations with South Korea in 1992, while Beijing’s response to the defection of high-ranking North Korean official Hwang Jang-yop at the South Korean embassy in Beijing in 1997 was an early indicator of how China recognised that the future of the Korean peninsula likely depends more on Seoul than Pyongyang.

Of course, tensions between North Korea and China go back decades. Back in August 1956, North Korea seemed determined to try to escape China’s influence, with Kim Il-sung moving against the Yanan faction – the pro-China dissidents – in an effort to consolidate his power and root out any potential rivals’ ties with Beijing. Decades later, Pyongyang demonstrated its independent streak by conducting a nuclear test without closely consulting Beijing. The Chinese leadership was frustrated by the last-minute notice it received of the 2006 test, and openly criticized Pyongyang’s ‘flagrant’ move, a word normally reserved for adversaries.

So, what are the strategic implications of these sources of conflict? Certainly for now, these ongoing problems likely won’t prompt a short-term deepening of any rift. As long as there’s even greater mutual distrust between China and the United States, which in turn leads Beijing to be suspicious of its strategic intentions with South Korea, it will continue to defend North Korea.

The upshot of this is that the more the United States and South Korea criticize North Korea, and the more they demand that China put pressure on it, the more China feels it must support North Korea and put aside any sources of potential conflict. Conversely, the friendlier the approach adopted by the United States and South Korea, the likelier it is that the latent sources of conflict between China and North Korea will rise to the surface. 

Sungmin Cho is a is a James Kelly Korean Studies Fellow at Pacific Forum CSIS. He earned his BA at Korea University and an MA in International Relations at Peking University.