Before getting to the heart of the latest announcement it is important to note there is a great deal of rapid economic action taking shape in China ahead of Secretary Rex Tillerson’s arrival. ¹China has stopped the import of recyclables. ²Chinese manufacturing is slowing. ³Comac (chinese aerospace) has successfully tested their latest airliner.
#1 is important because it reflects the opinion of the central economic planners in Beijing that #2 is more severe than currently publicized. #3 is important because Canada’s plan in the Boeing -vs- Bombardier trade dispute was to look toward China to purchase Canadian subsidized aerospace products. Purchases won’t happen because China is creating it’s own airline manufacturing industry with Comac (a Beijing subsidized industry). However, China is more than willing to give the illusion of trade in order to steal Bombardier technology.
However, today the bigger economic story is an outcome of President Trump and Treasury Mnuchin outlining specific sanctions against any entity that engages in economic activity with North Korea.
Beijing understands the consequences to the Trump/Mnuchin sanctions and finds themselves in a tight position where allowing DPRK business interests to operate within China violates the intended purpose to cut off North Korea from it’s economic enablers.
(Via Daily Mail) China has ordered North Korean companies in the country to shut down by January as it applies UN sanctions imposed following Pyongyang’s sixth nuclear test.
The commerce ministry in Beijing said today the companies, including joint ventures with Chinese firms, have 120 days to close from the date the United Nations resolution was adopted on September 12.
The UN Security Council voted unanimously to boost sanctions on North Korea, banning its textile exports and capping fuel supplies.
The announcement comes days after China confirmed that it will apply another major part of the sanctions – a limit on exports of refined petroleum products to North Korea starting October 1 and a ban on textiles from its neighbour.
China’s application of UN sanctions is particularly biting for North Korea.
Beijing is Pyongyang’s main ally and trading partner, responsible for around 90 percent of the hermit nation’s commerce.
The United States has pressed China to use its economic leverage to strongarm North Korea into giving up its nuclear ambitions.
US Secretary of State Rex Tillerson will visit Beijing this weekend for talks with China’s top diplomat, Yang Jiechi, and Foreign Minister Wang Yi. (read more)