China shuts all North Korea businesses

North Korean restaurants were a key target of the Beijing order for Pyongyang to shutter all businesses in China. Chinese and North Korean flags claim friendship on this wall outside a North Korean restaurant in Ningbo, Zhejiang province of China. (Reuters file photo)

BEIJING: China has ordered North Korean-owned businesses in China to close by January, cutting foreign revenue for Pyongyang under United Nations sanctions imposed over its nuclear and missile programmes.

China’s commerce ministry said on Thursday that companies, including joint ventures with Chinese firms, have 120 days to close from the date the UN resolution was adopted, Sept 11.

North Korean businesses, mostly in the restaurant industry would be affected. There are an estimated 100 restaurants run by North Koreans, including 26 in the capital Beijing.

There are a number of North Korean restaurants in Bangkok, although the exact number and their financing are unknown.

China’s sanction orders followed an order by Malaysia on Thursday that bans its citizens from travelling to North Korea.

“This decision is taken in view of the escalation of tensions in the Korean peninsula and related developments arising from missile tests. The travel ban will be reviewed once the situation has returned to normal,” the Foreign Ministry said in a statement.

The Asian Football Confederation later Thursday said the Malaysia travel ban has led it to postpone the AFC Asian Cup UAE 2019 Final Qualifying Round Group B match between Malaysia and North Korea that was scheduled on Oct 5 in Pyongyang following two previous postponements.

The sudden move by Beijing came directly on the heels of US State Department praise for Chinese enforcement of sanctions, as officials urged Congress not to add more just yet.

“We are working closely with China to execute this strategy and are clear-eyed in viewing the progress – growing, if uneven – that China has made on this front,” Susan Thornton, acting assistant secretary at the State Department’s Bureau of East Asian and Pacific Affairs, told a Senate hearing.

“We do see Chinese policy shifting,” she said.

When Thornton spoke, the Chinese had not yet announced their decision to shutter all North Korean businesses in the country.

The Beijing sanctions spare, on a case by case basis, authorised “entities” involved in non-commercial activities or public utility infrastructure projects that do not generate profits.

China has long been North Korea’s diplomatic protector, but has gone along with the latest penalties out of growing frustration with leader Kim Jong Un government.

The latest round of sanctions approved by the UN Security Council ban member countries from operating joint ventures with North Korea.

The sanctions also ban sales of natural gas to North Korea and purchases of the North’s textile exports, another key revenue source. They order other nations to limit fuel supplies to the North.

China, which provides the bulk of North Korea’s energy supplies, announced on Saturday that it would cut off gas and limit shipments of refined petroleum products, effective Jan 1.

It made no mention of crude, which makes up the bulk of Chinese energy supplies to North Korea and is not covered by the UN sanctions.

The sanctions could cost North Korea up to $800m a year from textile exports, and another $500 million a year from its overseas workers, according to estimates by Hong Kong’s South China Morning Post.

In Washington members of the Senate Banking Committee told Thornton they back tougher action to clamp down on Pyongyang’s nuclear and missile development.

Tensions have been rising on the Korean Peninsula as North Korean leader Kim Jong Un and US President Donald Trump exchange war-like threats and insults over Pyongyang’s nuclear and missile programs.

Also Thursday, South Korea said it expects more provocative acts by North Korea next month to coincide with the founding of its Workers Party, the official name of the communist party.

Thornton and the other witness, Sigal Mandelker, Treasury Department under secretary for terrorism and financial crimes, said Congress should not do anything that could interfere with administration efforts to find a diplomatic solution.

“When our hands are tied in different ways, it keeps us from being agile in the way that you would want us to be agile,” Mandelker said.

“… It inadvertently could decrease our ability to exert maximum economic pressure,” she said.

The exchange reflected continuing conflict between lawmakers and the Trump administration over foreign policy. Many members of Congress, including some of Trump’s fellow Republicans, back policies to give lawmakers more control including over his ability to lift or impose sanctions.

On North Korea, several have questioned the wisdom of Trump’s use of the Twitter social network to threaten the country, saying bellicose messages undercut efforts toward a diplomatic solutions.

Several committee members noted that North Korea’s economy has grown in recent months, and said China must do more.

“The consensus in Washington is that China is a partner in this issue. I do not think that that is the case,” Republican Senator Tom Cotton said.

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