A boy takes photographs of the North Korea Pavilion at the 2010 World Expo in Shanghai, China (Photographer: Qilai Shen/Bloomberg)  

China Worries Over North Korea Collapse Muddle Nuke Response

(Bloomberg) -- As global powers condemn North Korea’s latest step up the nuclear ladder, the one nation that can actually stop Kim Jong Un is unlikely to do much.

All eyes are again on China after Pyongyang conducted its second nuclear test this year -- its fifth since 2006 -- after a surge in ballistic missile launches. China, as North Korea’s sole major ally, accounts for about 76 percent of its neighbor’s trade, 90 percent of its energy, and almost half of its food.

While the United Nations Security Council is expected to go into its usual cycle of meetings about potentially tougher sanctions, a process that can take weeks if not months, China may show limited appetite for a further tightening. That reticence allows Kim to exploit disagreements China has with the U.S., South Korea and Japan over how to rein in both him and his nuclear ambitions.

“We’re in no position to control North Korea until the Chinese make it clear they’re ready to allow North Korea to fail," said Ralph Cossa, president of the Pacific Forum CSIS policy research group in Honolulu. “The Chinese still haven’t been willing to do that."

China Worries Over North Korea Collapse Muddle Nuke Response

China fears that stricter measures against North Korea, such as cutting off provisions of oil and food, would lead to a humanitarian disaster with millions of refugees flocking across the border. The collapse of Kim’s government could also put soldiers from South Korea and its U.S. ally right on China’s border, a scenario Beijing’s leaders want to avoid.

That lifeline is at the root of escalating tensions. The U.S. has long pressed China to take a harder line as Kim presses ahead with making not just more bombs, but also more sophisticated ones. The test on Friday was the first of a miniaturized warhead, according to Pyongyang’s state media, and would render it better able to target the continental U.S.

To counter that threat, the U.S. has struck an agreement with South Korea to install a missile defense system called Thaad on its soil. That has raised the hackles of North Korea, plus China and Russia, who say the shield could also be used against them.

“It’s a vicious circle that they don’t trust each other," said Ruan Zongze, vice president of the China Institute of International Studies, which is run by China’s foreign ministry. “China has no power to change Pyongyang’s behavior under such circumstances."

China on Friday urged North Korea to stick to denuclearization. The foreign ministry said it would push for a resolution through talks with North Korea, South Korea, Japan, the U.S. and Russia -- a group that hasn’t met since 2009 after making little progress over six years.

“A swelling number of uncertainties" are fueling worries that the Korean Peninsula is “degenerating into a tinderbox that could ignite with any spark," the official Xinhua News Agency said in a commentary published on Friday afternoon.

Just hours before North Korea’s latest test, President Barack Obama said China could still “tighten up" sanctions against Kim’s regime. He also told counterpart Xi Jinping that if China is worried about defensive measures like Thaad, then “they need to work with us more effectively to change Pyongyang’s behavior."

China Worries Over North Korea Collapse Muddle Nuke Response

Yet it’s unclear how much further China will go. After the nuclear test in January, U.S. Secretary of State John Kerry pushed China to back tougher sanctions. Reports said the U.S. wanted China to stop exporting oil, halt imports of mineral resources, ban flights from national carrier Air Koryo and increase inspections of cargo headed to North Korea -- things Beijing didn’t want to agree to.

In April, China relented somewhat with a ban on imports of coal, iron ore and other commodities that it said accounted for more than 40 percent of North Korea’s overall exports in U.S. dollar terms. But it’s unlikely to go beyond existing sanctions, according to Shi Yongming, an associate research fellow who specializes in Korean studies at CIIS in Beijing.

“The ultimate motive behind North Korea’s nuclear project is the threat it perceives from the U.S. strategic goal in the Korean peninsula: toppling the North Korean communist regime and unifying with the South," Shi said. “China cannot do anything to assuage this sense of threat."

The global reaction is only likely to add to Kim’s sense of paranoia. The U.S., France, Japan and South Korea all condemned the test, with President Park Geun Hye saying it showed North Korea’s “maniacal recklessness."

‘Hapless Response’

Still, another condemnation by the Security Council and more resolutions against North Korea would amount to a “hapless response," said Victor Cha, who was deputy head of delegation for the U.S. at the six-party talks from 2004 to 2007. To make a real impact, he said, the U.S. should focus on pressing China to cut off North Korea’s airspace and ports, and ban transactions in yuan.

“I just don’t know if China is willing to take the plunge," said Cha, now Korea chair at the Center for Strategic and International Studies in Washington.

North Korea has served as a buffer state between China and South Korea since the U.S. and Pyongyang agreed to a UN-backed armistice in 1953 that halted the Korean War. China still values that strategic element more than it fears a nuclear-armed North Korea, according to Euan Graham, who served as Charge d’Affaires at the British Embassy in Pyongyang and is now a director at Sydney-based Lowy Institute for International Policy.

“China is the key country," Graham said from a security conference in Seoul. “China sees North Korea as better the devil you know, rather than a state which is pushed to the point of economic collapse and brings South Korean and U.S. intervention.”