September 4, 2006

China reconsiders frayed ties with North Korea

By Chris Buckley

BEIJING (Reuters) - Chinese policy makers are debating how
far their country should prop up or pressure North Korea as
fraying economic ties compound political distrust.

According to South Korean news reports, China may invite
secretive North Korean leader Kim Jong-il for a visit to heal
rifts over Pyongyang's July 5 missile tests and Beijing's vote
for a U.N. Security Council resolution condemning them.

U.S. Assistant Secretary of State Christopher Hill visits
Beijing on Tuesday, seeking fresh pressure on North Korea to
rejoin six-party talks on ending its nuclear arms program.

Nobody expects Beijing to break with North Korea, its
neighbor, long-time Communist ally and trade partner.

But Chinese researchers close to the government told
Reuters that Kim was unlikely to visit while relations remained
strained and prospects for the disarmament talks increasingly

"I'm skeptical about the visit," said Zhang Liangui, an
expert on North Korea at the Central Party School, a key
Beijing think-tank. "The conditions aren't ripe and they won't
be till Kim Jong-il changes his stance and agrees to return to
the six-party talks. China's patience is being tested."

The talks, hosted by China -- North Korea's main benefactor
-- but stalled since November, also include the United States,
South Korea, Japan and Russia.

Behind the diplomatic maneuvers, Chinese officials and
analysts are quietly debating relations with Pyongyang, said a
senior scholar at a government think-tank.

"There are two debates going on. One about just how
strategically important North Korea is to China; the other
about whether China should maintain traditional relations in
the face of rising political costs," he said. He requested


Last month, Chinese Foreign Ministry spokesman Liu Jianchao
told a Seoul newspaper that Pyongyang "doesn't listen to
Beijing." And Chinese scholars have begun openly to wonder
whether the six-party talks are doomed.

North Korea's missile tests "have forced China into
unprecedentedly awkward circumstances," Zhu Feng, of Peking
University, wrote in the latest issue of Contemporary
International Relations, a Chinese journal.

"The multilateral dialogue mechanism is virtually incapable
of altering their security predicament of mutual distrust and
accusations," Zhu wrote of the United States and North Korea.

China has promoted trade as a catalyst for better ties with
North Korea. But there, too, recent data suggest a

In the first seven months of this year, Chinese imports
from North Korea fell by 15.9 percent compared to the same
period last year, dropping to $237 million, according to
Chinese customs figures. That follows a decline of 14.8 percent
for all 2005.

In the first seven months, North Korean metal imports,
including scrap iron and steel often stripped from moribund
state factories, fell 48.5 percent. But imports of iron ore and
other raw minerals grew 39.8 percent.

"Given North Korea's geographic location next to China, it
ought to be booming. But essentially they're exchanging raw
materials for low-price consumer goods from China," said Marcus
Noland, an expert on North Korea at the Institute for
International Economics in Washington.

China supplies the North with nearly all its oil, and in
the first seven months crude shipments reached 335,902 tonnes,
up 1.7 percent on the same time last year. But the official
value of that crude leapt 35.3 percent to $158 million.

China probably did not require impoverished Pyongyang to
actually pay for the oil, said Peter Beck, who monitors North
Korea for the International Crisis Group in Seoul.

"China's trying to strike a balance between maintaining
stability in North Korea and maintaining regional stability,"
he said.