President Trump has been leaning on China to bring North Korea under control in the wake of numerous missile and nuclear weapons tests.
It seems that China might be starting to respond to Trump’s demands, according to Yahoo News. Some of the larger Chinese banks have stopped opening accounts for North Korean citizens, cutting them off financially.
According to an anonymous staff member working for Bank of China, the reason they’re no longer opening new accounts is that North Korea is under US sanctions: “all bank activities related to North Korea are suspended now because it is a sanctioned country.”
Bank of China isn’t the only one. Workers at Industrial and Commercial Bank of China have also followed suit and stopped opening new accounts. Some claim it was because of new orders from China’s central bank, People’s Bank of China.
Chinese banks have long been under fire for supporting North Korea missile programs through their banking services. According to The Independent, the Trump administration even went so far as to blacklist a small Chinese bank in June.
The US Treasury stated the blacklist was because the bank gave North Korea global access to finances and acted as a financial middleman in weapons deals. “The Bank of Dandong acts as a conduit for North Korea to access the US and international financial systems, including by facilitating millions of dollars of transactions for companies involved in North Korea’s WMD and ballistic missiles programs,” a Treasury spokesman said.
The blacklist against Bank of Dandong prevents the financial institution from accessing the US financial system and prevents Americans from doing business with them.
According to Anthony Ruggiero, a former Treasury Department Official, the blacklist against the Bank of Dandong was a warning to the larger institutions of China “This is a strong message to Chinese leaders that the Trump administration will act against North Korea’s sanctions evasion in China,” Ruggiero said.
Given that many of the world’s largest banks reside in China, a blacklist against any of the major financial institutions would undoubtedly complicate both China’s and the global economy. Yet blacklisting the small bank likely did more to harm China’s economy than anyone else’s and may have convinced the bigger banks to reconsider working with North Korea.
This isn’t the first time the US has considered financial pressure to influence China. Earlier this month President Trump sent out a tweet about possibly stopping trade with China, “The United States is considering, in addition to other options, stopping all trade with any country doing business with North Korea.”
This was no small threat for China, considering they are the largest trade partner with the US and the US government estimates total trade last year was $648.2 billion. Stopping all trade with China would deal a devastating blow to their economy.
Chinese banks have stopped opening accounts for North Korean citizens, cutting them off financially. Are these sanctions a good idea?
According to Daily Express, China didn’t take kindly to the threat. Geng Shuang, Chinese Foreign Ministry Spokesman, said the threat was “unacceptable a situation in which on the one hand we work to resolve this issue peacefully but on the other hand our own interests are subject to sanctions and jeopardized.”
Considering China buys 83 percent of North Korea’s export and sells 85 percent of its imports, it’s no wonder the US sees China as a strong leverage against North Korea. Given the tense climate between the US and North Korea that has already seen nuclear threats, the US is no doubt willing to risk upsetting China financially to avoid a larger problem.
Hopefully, with Chinese banks starting to cut off Korea’s access to the global financial markets, the hostile nation will consider behaving or risk financial ruin.