China shores up North Korea with backdoor trade deals

China is shoring up the North Korean regime with billions of dollars in backdoor trade deals that threaten to undermine UN sanctions imposed after the country's illegal missile and nuclear tests.

China shores up North Korea with backdoor trade deals
Kim Jong Il (front left) and his son Kim Jong Un (front right) receive gifts from Chinese Minister of Public Security Meng Jianzhu (centre) in Pyongyang Credit: Photo: AP

North Korea's exports to China soared by 51 per cent to $1.2 billion (£740m) last year, according to Chinese government data published by Bloomberg, while Chinese sales to the North rose 21 per cent.

Analysts said Chinese sales of wheat and fuel oil was helping to keep the regime alive in the face of crippling UN sanctions, a withdrawal of South Korea aid and a succession of poor harvests that the UN estimates will leave five million North Koreans short of food this year.

"Even if North Korea's front door is firmly locked, there is every reason to think the regime can gain what it needs to survive with impunity as long as the back door is open to China," said Scott Snyder, a Korea specialist at the US Council on Foreign Relations, adding that China's trade risked making sanctions "ineffective."

Despite being angered by Pyongyang's two nuclear tests, China has continued to support its old ally, fearing that a collapse in the regime would cause a refugee crisis on its northern border and create a reunified Korean peninsula that leant towards America.

China refused to condemn Pyongyang last November after it shelled a South Korean island on the Korea's disputed Yellow Sea border – openly straining relations between Beijing and Washington which wants a tough line against the North.

South Korea, which in the past has given millions of tons of aid to the North, is now refusing to give the North any food or fuel until it shows it is sincere about nuclear disarmament.

Earlier this month, military-to-military talks between the two Koreas collapsed acrimoniously as Seoul stuck to its line, infuriating Pyongyang which analysts said had hoped to use the talks to restart the aid process.

Facing a united front from Washington and Seoul, North Korea has had no choice but to turn towards its old ally, Beijing, for support, analysts said.

"North Korea has made a series of moves to enhance its relationship with China, aiming to pacify the people and find political support since the tensions between the two Koreas have continued to escalate," Jeung Young-tae, director of the Seoul based North Korean Institute for national Unification, told China's state-backed Global Times newspaper.

"North Korea is essentially looking to shore up long term economic assistance since the nation is suffering from insufficient food supplies."

However analysts added that the North's two-way trade of $3.5 billion – dwarfed by China's $207.2 billion commerce with South Korea – would still give the regime little more than life support.

"China can help North Korea meet its immediate needs," said Cho Bong Hyun, a research fellow at the Seoul-based IBK Economic Research Institute. "But that support will still fall far short of what North Korea needs to boost its economy."