July 26, 2006

US welcomes China’s ‘affirmative steps’ on N Korea

WASHINGTON (Reuters) - The United States is encouraged by
China's "affirmative steps" in freezing some North-Korea
related assets, White House spokesman Tony Snow said on

A U.S. official told Reuters the action was taken by the
state-owned Bank of China and pre-dated North Korea's July 4
missile tests.

"We're encouraged by the fact that the Chinese government
has taken affirmative steps," Snow told reporters.

The United States has tried to nudge China -- Pyongyang's
chief patron -- into increasing pressure on the North to return
to six-country negotiations on its nuclear programs.

News of the Chinese move was first reported by South
Korea's Yonhap news agency, which quoted a South Korean
legislator as saying suspicions Pyongyang printed fake Chinese
currency prompted the Bank of China to freeze all of its North
Korean accounts.

"As you know, one of the issues that led North Korea to
walk away from the six-party talks was a crackdown on
counterfeiting," Snow said. "We think it's a dangerous thing to
be counterfeiting currency and using that as a way to engage in
drug trade or arms trade."

Snow said both China and South Korea were starting "to
assert pressure on the government in Pyongyang because ...
they've got a real strong vested interest in making sure the
government of North Korea returns to the table so that they can
start dealing with outstanding nuclear issues."

The United States has already instituted financial
restrictions against North Korea aimed at halting what
Washington says are illicit actions by the Pyongyang government
or North Korean entities.