From THE WALL STREET JOURNAL:
State-Owned Lender Halts Dealings With Pyongyang Institution; U.S. Applauds Move as Important Containment Step
By Lingling Wei in Beijing and Jay Solomon in Washington
Bank of China Ltd. said it cut off dealings with North Korea’s primary foreign-exchange bank in the first publicly announced move by a Chinese state-owned company to distance itself from Pyongyang and its young leader Kim Jong Eun.
The Obama administration quickly praised Bank of China’s action Tuesday as an important step in attempting to contain North Korea’s growing nuclear-weapons and ballistic-missile programs.
The U.S. has accused the Foreign Trade Bank of North Korea, which performs many functions of a central bank, of facilitating millions of dollars of transactions on behalf of North Korean arms companies and entities involved in Pyongyang’s nuclear program.
Treasury Secretary Jacob Lew specifically raised the issue of the Foreign Trade Bank during his meetings with senior Chinese officials last month in Beijing, according to senior U.S. officials.
More at the link.
The Bank of China takes its political direction from the government, and the probability that it took such a decision without the consent of, if not the direct instruction from, the government is vanishingly small. And this move seriously impedes North Korea’s ability to engage in international trade.
The Chinese Communists have been North Korea’s strongest — and virtually only — supporter, and this move by Beijing sends a message a lot more clearly and strongly that China is getting just plain fed up with Kim Jong-un’s policies of brinksmanship. Mao Tse-tung would never recognize the current Chinese government — his ghost would probably purge them all and send them to re-education camps in the countryside in another Cultural Revolution — which currently values stability rather than conflicts it cannot control, because the Chinese are profiting from capitalism these days, profiting handsomely, and they would like to see that continue. For Beijing, there is nothing to gain, and possibly a lot to lose, due to President Kim’s gamesmanship.
For Kim Jong-un, there is a real need to not only show that he is in charge, but to consolidate his authority. He has been, in effect, keeping the North Korean military busy: the more that they have to do to keep up with Mr Kim’s gamesmanship, the less time that any of them have to plot to rein in or overthrow him. The less time that they have for conspiracy means the less time that they have to guard their own backs, which means that any moves which could be seen as leading to a challenge to President Kim bear greater risk of not remaining secret, which would have lethal consequences.
But the leadership of Kim Jong-un is starting to have very serious consequences. The closing of the North-South joint venture Kaesong plant has cost 53,000 North Korean workers their jobs — and $90,000,000 in annual wages from an external source — and this action by the Bank of China just makes things worse. The people of the Democratic People’s Republic of Korea were already generally malnourished, and this just makes even the buying of food from abroad more difficult. President Kim’s policies, in the early years of his reign, have had detrimental effects on the country. And if the military leadership now sees the People’s Republic of China, their sole benefactor, as withdrawing their toleration1 of President Kim, he may not be able to retain power.
Predicting what will happen in the government of the DPRK is often an exercise in pure speculation, which makes your Editor cautious here, but this seems to me to be a very big deal: President Kim will have to temper his brinksmanship policies, or he risks holding his office for a lot shorter time than did his father and grandfather.
- I had originally used the word “support” here, but toleration is a more accurate description. ↩