“North Korea Factor”in the U.S.-China Trade Negotiation

No.2019-3(January 11, 2019)

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In the wake of Kim Jong-un’s fourth visit to China, another interesting debate has been underway among experts whether China used the "North Korea card" against Washington in their trade negotiation, capitalizing on Kim Jong-un’s visit. The two international headline-grabbing events happened the same week in Beijing.  

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Interestingly, both Beijing and Washington flatly deny the link. However, analysts are divided. It therefore warrants a discussion, as it would offer an valuable insight into how the two superpowers strategize the North Korean issue in their each other’s dealings.  

Trump has already openly complained, at least three times, that "China was behind" North Korea's defiant attitude that led to the negotiations being stalled last year. A second summit meeting between Trump and Kim is expected to be held soon. As such, Chinese leader Xi Jinping’s meeting with Kim made Washington anxious. 

In theory, the North Korean nuclear issue and the U.S.-China trade war should be separate issues. But the idea that China may use “North Korea” as leverage in the trade war keeps popping up.  

When the question was raised to U.S. Secretary of State Mike Pompeo on Jan. 6, Pompeo said: “The Chinese have been very clear to us that these are separate issues,” labeling China “a good partner” in Pyongyang’s nuclear disarmament.  

In China, in the afternoon of Jan. 8, at the Chinese foreign ministry's briefing, reporters repeatedly questioned whether it would be possible for China to use North Korea as a card in trade negotiations with the United States, pointing out that Kim Jong-un's visit was taking place while the U.S.-China trade negotiations are underway in the same week, in the same city. Chinese foreign ministry spokesmen Lu Kang brushed the view aside, saying, “China doesn’t need any ‘ji qiao (technique)’ to send a signal to the United States.”

In fact, some analysts in Washington also agree. They view that the trade war in itself is so complex and intricate that there is no room for the North Korean issue to be involved. They also contend that the U.S. government also treats them as separate matters.

But others think that it makes sense for China to use “Kim’s visit” to leverage against Washington. China is seen as the country that wields the largest clout over Pyongyang. Over 90% of North Korea’s economy depends on China. With Kim’s four visits in less than one year, China seems confident that Washington alone cannot solve the North Korean issue; it needs China’s help.

Aware of the debate, China’s Global Times argued in an editorial: "Hardly any serious Chinese strategist would consider this way,” as if it would be beneath the dignity of a rising superpower to mix the two; one is a trade issue, the other is a security issue. One is an apple, the other an orange. In a gentlemen’s world, one is not supposed to mix the two.

When the THAAD dispute erupted between China and South Korea, there was also a strong expectation in South Korea that China would not engage in economic retaliation because they are separate issues. Even then a South Korean cabinet minister, who was in charge of nation’s economy, famously advocated this view, rationalizing that doing so would also hurt the Chinese economy, given how the two countries’ economies are interdependent.

However, China took economic revenge to send a political signal – not just to Seoul but also to other neighboring countries: when you side with Washington in U.S.-China disputes, you will pay the price dearly.

Trump is also well-known for mixing apples and oranges. He publicly said China's stance on North Korea influences his trade policy. Specially, he suggested he'd go softer on trade if China was being helpful on North Korea. It is safe to assume that Beijing knows how to play that game too.

After Kim arrived in Beijing, China's media outlets suddenly switched gear from a celebratory mode to a low-key mode. There was no immediate TV footage about Xi’s meeting with Kim, including the much-anticipated Kim’s “birthday cake” scene. Kim had his 35th birthday during his visit to Beijing. This came as a great contrast to Kim’s previous visits when the Chinese media made big headlines about Kim’s activities, accentuating the “friendship” between the two nations.

When the Chinese foreign ministry spokesman Lu Kang was inundated with repeated questions from journalists regarding Kim’s meetings and itineraries in Beijing, he assured them: “I will let you know immediately.”

He didn’t.

The media blackout heightened curiosity, if anxiety, in Washington, regarding what Xi and Kim talked about. Interestingly, it occasioned with the time when the U.S. and China decided to extend their trade negotiation in Beijing one more day.

China continued to keep mum about Kim’s activities in Beijing. Only when the U.S. trade negotiators left, China aired footages of Kim’s meeting with Xi. 
 

Why would China initially trumpet Kim's visit, but then once he was in Beijing, it kept mum, keeping Washington in an anxious guessing game?

Even if “North Korea” may have not been part of the calculus among the U.S. trade negotiators in Beijing, North Korean leader’s presence in the same city was keenly watched by those decision-makers in Washington. It’s reasonable to think that it served as an “unspoken” psychological factor.

It’s similar to the arrest of Huawei CFO Meng Wanzhou, who is the daughter of the founder of Chinese telecoms giant. The U.S. maintained that her arrest and the U.S.-China trade war were unrelated. But it made China quite anxious.

Taken together, it can be argued that China’s withholding information about Kim’s visit by selective media blackout, while trade negotiation with America was being underway, was a premediated act. It was a “measured” display of China’s influence over North Korea without overplaying it. It was meant to serve as a leverage in the trade negotiation without derailing it.

 

This article is based on the author’s personal opinion and does not reflect the views of the Sejong Institute.