• World

Why Beijing is so Reluctant to Cut off Trade with North Korea

9 minute read
Simon Elegant/Dandong

At first glance, the city of Dandong seems a peaceful, bustling symbol of Chinese prosperity. Brightly dressed townspeople stroll along the tree-lined promenade near the Yalu River, teenagers mixing with office workers and young families, many of them fresh from nearby malls, shopping bags at their sides. As the light fades, neon signs illuminate the city’s numerous hotels and karaoke bars. Smaller lights also begin to blink on in the rows of brand-new apartment buildings that line the riverbank for miles. Behind one of the buildings, a fountain of noise and color erupts as firecrackers and exploding rockets mark a wedding banquet.

• A Nuclear Nightmare Comes True
With North Korea claiming a successful nuclear weapons test, its neighbors and the U.S. must figure out how to respond

• When Outlaws Get The Bomb
Kim Jong Il’s crude blast punctuates a scary reality: the law of the jungle now governs the race for nuclear arms

• Sanctions Don’t Bite on the North Korea Border
On Scene: It’s business as usual on the Chinese border town of Dandong, which continues to trade briskly with ‘those stupid bastards’ across the Yalu

Viewpoints

• Let’s Make a Deal…
We can’t invade. Sanctions won’t work. The only option left is to talk

• Staring At North Korea
The survival of Kim Jong Il’s regime depends on cross-border trade. Here’s why China is so reluctant to cut it off

• North Korea Raises the Stakes
Analysis: More tough talk, another provocation. What’s behind Pyongyang’s threat to test a nuclear weapon?

• Postapocalypse Now
Pop culture’s latest visions of mass destruction feel eerily intimate

• Rice’s North Korea Sanctions Mission Is No Slam-Dunk
Analysis: Sure, China has agreed to block any trade with its neighbor’s weapons programs. But its priorities are to engage Pyongyang and restart nuclear diplomacy — not necessarily the same as those of the U.S.

Photo Essays

• The Most Militarized Border
Tension between the two Koreas escalates after the North tests a nuclear weapon. Here’s a look at life in the Korean DMZ

• Exposing North Korea
Daily life in a country caught between the whims of a tyrannical regime and the call of the modern world

Web Guide

• Dr. Strangelove Visits North Korea
A selection of some of the most interesting items on North Korean president Kim Jong Il and his testing of a nuclear weapon

• When Outlaws Get The Bomb
Kim Jong Il’s crude blast punctuates a scary reality: the law of the jungle now governs the race for nuclear arms

• Sanctions Don’t Bite on the North Korea Border
On Scene: It’s business as usual on the Chinese border town of Dandong, which continues to trade briskly with ‘those stupid bastards’ across the Yalu

Viewpoints

• Let’s Make a Deal…
We can’t invade. Sanctions won’t work. The only option left is to talk

• Staring At North Korea
The survival of Kim Jong Il’s regime depends on cross-border trade. Here’s why China is so reluctant to cut it off

• North Korea Raises the Stakes
Analysis: More tough talk, another provocation. What’s behind Pyongyang’s threat to test a nuclear weapon?

• Postapocalypse Now
Pop culture’s latest visions of mass destruction feel eerily intimate

• Rice’s North Korea Sanctions Mission Is No Slam-Dunk
Analysis: Sure, China has agreed to block any trade with its neighbor’s weapons programs. But its priorities are to engage Pyongyang and restart nuclear diplomacy — not necessarily the same as those of the U.S.

Photo Essays

• The Most Militarized Border
Tension between the two Koreas escalates after the North tests a nuclear weapon. Here’s a look at life in the Korean DMZ

• Exposing North Korea
Daily life in a country caught between the whims of a tyrannical regime and the call of the modern world

Web Guide

• Dr. Strangelove Visits North Korea
A selection of some of the most interesting items on North Korean president Kim Jong Il and his testing of a nuclear weapon

Look a little closer, however, and it becomes evident why Dandong (pop. 2.4 million) is anything but a normal Chinese city–and why it’s a crucial front in the world’s struggle to contain a nuclear North Korea. A few hundred yards across the river lie the dilapidated low-rise buildings of the North Korean city of Sinuiju, many of which seem deserted, their window frames empty of glass, their doors agape. A few peasants dressed in blue jackets and trousers can be seen laboring in the fields in front of the town, but otherwise an eerie stillness pervades. As evening advances, only a few feeble lights come on in Sinuiju, and the town’s forlorn structures are soon swallowed up by the darkness. Only the incongruous shape of a long-unused Ferris wheel is visible in the dying light.

The proximity of such desolation goes to the heart of China’s quandary about how to deal with North Korea and its leader, Kim Jong Il. Dandong is the main crossing point on China’s 880-mile border with North Korea, making it the most active hub for the $1.6 billion in annual trade between the two countries. That trade is critical to the survival of Kim’s regime: some 90% of Pyongyang’s daily oil supply and just under half its food imports come from China. Although the U.S. believes that tightening the financial squeeze on Pyongyang is necessary to persuade Kim to abandon his newly tested nuclear arsenal, Beijing fears that a cutoff in aid would bring about the collapse of the North’s economy, touch off civil unrest and lead to an influx of millions of poor, hungry refugees on its borders. In response to Kim’s test on Oct. 9, the U.N. Security Council demanded that North Korea eliminate all its nuclear weapons and other weapons of mass destruction, as well as ballistic missiles. The U.N. also authorized inspection of cargo to and from North Korea.

Making those sanctions meaningful depends on China. China said last week that the country’s four main banks will cease handling transactions from North Korea. It also says it had increased inspections of goods passing from China to North Korea by land, although there will be no inspections of seaborne cargo. Chinese newspapers reported last week that authorities had closed all border crossings with North Korea except for the most heavily trafficked one, at Dandong.

And so if China really intends to exert pressure on Pyongyang, Dandong will be the place where the hammer will drop. But there’s reason to doubt China’s readiness to take further steps toward squeezing North Korea. One reason is self-interest. Trade with the North is vital to border cities like Dandong, which has registered double-digit growth in recent years, according to local government statistics. Much of that is due to its trade with North Korea, which has more than quadrupled since 1999. Others have benefited from doing business with the North: energy and fuels constitute the bulk of China’s exports to the North, accounting for nearly $300 million last year. Significantly, food was the second largest product, at about $150 million, followed by electrical and other machinery and plastics.

The importance of the North Korean market to the Chinese helps to explain why officials have been relatively slow to enforce the U.N. sanctions. At Dandong’s three-story customs compound, a plump, middle-aged man who calls himself Li and says he is a truck driver gestures toward the 15 or so vehicles waiting to be inspected before driving onto the bridge over the Yalu. “The inspections are a little stricter, but it’s really just for show. They poke around a bit and then let you go.”

What scares Beijing most about sanctions is less what they would mean to China’s economy than what damage they could do to North Korea’s. In the mid-1990s, North Korea suffered a severe famine that lasted for several years and left perhaps hundreds of thousands dead. Although increased trade and relatively good harvests in the past couple of years mean the current situation is fairly stable (Pyongyang doesn’t publish reliable economic statistics, but most estimates put GDP growth in recent years in the 1%-to-2% range), the North remains dependent on outside food aid. According to the Brussels-based International Crisis Group, conditions could deteriorate quickly. A forthcoming report warns that “a perfect storm may be brewing for a return of the famine.” The report notes that Pyongyang last year reintroduced the same public food-distribution system that had collapsed in the 1990s, and rejected assistance from international aid groups. Those problems have been further exacerbated by summer floods that damaged crops and infrastructure.

The prospect of a humanitarian crisis is not lost on Chinese officials, who find themselves trying to engage North Korea while at the same time walling it off. Above Dandong sits a watchtower whose stone battlements are silhouetted by the dying rays. The tower is one of the first outposts of China’s Great Wall, remnants of which wind up and down the hills leading to Dandong. Now China is building another wall, a fence along its entire border with North Korea. But even when that structure is complete, it seems unlikely that Beijing will pay much more than lip service to imposing the kind of severe sanctions that, while they would teach North Korea a lesson for its nuclear adventures, could also bring about renewed famine and the prospect of hundreds of thousands of refugees.

It’s revealing that even in the wake of Kim’s nuclear detonation, most Chinese in places like Dandong regard their neighbor with pity more than fear. On the highway leading out of the city, a farmer sits astride a brand-new bright blue motorbike and waits as a fruit seller packs up three large bundles of apples and pears. “I’ll take this down to the river tonight, and the North Koreans will be there to trade as usual,” he says. He says he swaps the fruit for sheets of copper, most probably stolen, usually one piece of fruit at a time because his buyers can’t afford more. “These are the people who are allowed to live near the border. They have to pass loyalty tests,” he says, shaking his head. “And still they are smuggling and crossing into China. Imagine what the rest of the country is like.”

More Must-Reads from TIME

Contact us at letters@time.com