Asia Pacific

China imposes limit on oil supply to North Korea

AP, Reuters

China announced Saturday that it will limit energy supplies to North Korea and stop buying its textiles under U.N. sanctions imposed over its nuclear and missile development, further reducing support from Pyongyang’s last ally.

Exports of refined petroleum to the North will be limited to 2 million barrels per year, effective Jan. 1, the Commerce Ministry said. Sales of liquefied natural gas are banned outright.

North Korea depends on China for almost all its oil and gas but estimates of its consumption are low, leaving it unclear how Beijing’s new limit will affect them. The restrictions announced Saturday do not apply to crude oil, which makes up the biggest share of energy exports to the North.

China also will ban textile imports from the North, the ministry said. Textiles are believed to be the North’s biggest source of foreign revenue following rounds of U.N. sanctions under which Beijing cut off purchases of coal, iron ore, seafood and other goods.

China accounts for some 90 percent of the North’s trade, making its cooperation critical to efforts to derail Pyongyang’s nuclear and missile development.

Chinese leaders were long the North’s diplomatic protectors but express increasing frustration with the government of Kim Jong Un. They support the latest U.N. Security Council sanctions but are reluctant to push Pyongyang too hard for fear Kim’s government might collapse. They also argue against doing anything that might hurt ordinary North Koreans.

Chinese officials complain their country bears the cost of enforcing sanctions, which have hurt businesses in its northeast that trade with the North.

The U.N. Security Council voted Sept. 11 to limit fuel supplies and ban the North’s textile exports. China, one of five permanent council members with power to veto U.N. action, agreed to the measure after the United States toned down a proposal for a complete oil embargo.

Petroleum exports for use in the North’s ballistic missile program or other activities banned by U.N. sanctions also are prohibited, the Commerce Ministry said.

The U.S. government’s Energy Information Agency estimates the North’s 2016 daily imports from China at 15,000 barrels of crude oil and 6,000 barrels of refined products. That would be the equivalent of almost 5.5 million barrels of crude and 2.2 million barrels of refined products for the full year.

North Korea has abundant coal but depends almost entirely on imports for oil and gas.

North Korean textile exports in 2016 totaled $750 million, according to South Korea’s Korea Trade-Investment Promotion Agency. It said nearly 80 percent went to China.

The announcement from Beijing came at the end of a week that saw tensions ratchet up between the United States and North Korea, with the leaders of both countries trading insults.

Russia urged calm on Friday after U.S. President Donald Trump called North Korean leader Kim Jong Un a “madman.” Kim had called Trump a “mentally deranged U.S. dotard” a day earlier after Trump said Washington would “totally destroy” North Korea if it threatened the United States or its allies.

Trump announced new U.S. sanctions on Thursday that he said allows the targeting of companies and institutions that finance and facilitate trade with North Korea. U.S. Treasury Secretary Steven Mnuchin also said banks doing business in North Korea would not be allowed to operate in the United States.

China has also urged calm, with Foreign Minister Wang Yi telling his Japanese counterpart that Tokyo should not abandon dialogue over North Korea.

North Korea has launched dozens of missiles this year, several of them flying over Japan, as it accelerates a weapons program aimed at enabling it to target the United States with a nuclear-tipped missile.

U.S. Secretary of State Rex Tillerson expressed hope in an interview with ABC that sanctions and “voices from every corner of the world” could lead North Korea back to talks, but admitted intensifying rhetoric had left Washington “quite challenged.”

North Korea’s Foreign Minister Ri Yong Ho, warned on Thursday that Kim could consider a hydrogen bomb test of an unprecedented scale over the Pacific. Ri, who is due to speak to the United Nations on Saturday, added that he did not know Kim’s exact thoughts.

In response, Tillerson said U.S. diplomatic efforts would continue but all military options were still on the table.

North Korea’s six nuclear tests to date have all been underground, and experts say an atmospheric test, which would be the first since one by China in 1980, would be proof of the success of its weapons program.

A senior U.S. official, speaking on condition of anonymity, said Washington was taking Kim’s threat seriously and added that any atmospheric test would be a “game-changer.”

But he said there were questions about North Korea’s technical capabilities and Washington did not give “too much credence” to Pyongyang taking such action. “There’s a certain amount of bluster that’s taken for granted when you’re dealing with North Korea,” the official said.

The United States and South Korea are technically still at war with North Korea because the 1950-53 Korean conflict ended with a truce and not a peace treaty.

The North accuses the United States, which has 28,500 troops in South Korea, of planning to invade and regularly threatens to destroy it and its Asian allies.

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