BEIJING – The state-owned Bank of China has shut the account of a North Korean bank accused by the United States of supporting Pyongyang’s nuclear development, Dow Jones Newswires reported Tuesday.
The closure would be the first openly acknowledged move by an institution in China — the North’s key backer — against the isolated regime’s interests in the current standoff with the U.S., which escalated in February with Pyongyang’s third atomic test.
But the details of the move were not revealed, and an analyst warned it would not likely contravene China’s long-standing approach of supporting its unruly neighbor to avoid regional instability.
“The Foreign Trade Bank of North Korea, the country’s main foreign-exchange bank, has been told its account has been closed,” Dow Jones reported, citing a statement from the Chinese institution.
The Bank of China is one of the country’s biggest state-owned lenders and is subject to political directives from Chinese authorities.
Washington imposed sanctions on the North Korean entity, Pyongyang’s primary foreign-exchange bank, after the latest nuclear detonation. It has urged Beijing, the North’s largest trade partner and biggest food and energy supplier, to do more to contain the regime of Kim Jong Un.
When U.S. Secretary of State John Kerry visited Beijing last month, the two countries vowed to work together to try to ease tensions on the Korean Peninsula, but gave no details. Kerry said there would be “very focused continued high-level discussions about the ways to fill in any blanks,” and that he wanted to ensure pledges were “not just rhetoric.”
U.S. Treasury Undersecretary David Cohen also visited the Chinese capital in March, soon after the new U.S. sanctions on North Korea were announced to discuss how they might be implemented.
China has supported separate United Nations sanctions on the North that were also expanded after the February test. But it has also said sanctions are not the “fundamental way” to resolve the crisis, and has tended to avoid antagonizing Pyongyang for fear of provoking an overreaction and destabilising the region.
Beijing’s overarching aim with Pyongyang is to avoid provoking instability that could see hundreds of thousands of North Korean refugees flooding across their shared border, as well as an enhanced U.S. military presence in the region or, ultimately, even a united, pro-U.S., Korean Peninsula.
That calculus was unlikely to change even if China took some steps in support of Western-backed sanctions, said Stephanie Kleine-Ahlbrandt, the Beijing-based director of Northeast Asia for the International Crisis Group.
“I think that this is a highly visible thing that will get them a lot of points with the Americans, with the international community,” she said. “But I think it’s impossible to judge its significance until we understand what it actually entails. China is simply not going to go very far because it prizes stability over denuclearization, and it has different aims on the peninsula than the U.S. does.”
In one indication of China’s support for North Korea, trade between the two nearly tripled in the five years through 2011 to $5.6 billion, figures compiled by Seoul showed last December. China accounted for 70.1 percent of the North’s entire external trade of $8.0 billion, up from 41.7 percent in 2007.
U.S. sanctions ban any American individual, business or organization from conducting transactions with a number of named entities, in an effort to cut off North Korea’s regime from international trade.