U.S., China to step up cooperation on
North Korea
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[September 20, 2016]
NEW YORK (Reuters) - U.S. President
Barack Obama and Chinese Premier Li Keqiang agreed on Monday to step up
cooperation in the United Nations Security Council and in
law-enforcement channels after North Korea's fifth nuclear test, the
White House said.
China and the United States are also targeting the finances of Liaoning
Hongxiang Industrial, a Chinese conglomerate headed by a Communist Party
cadre, that the Obama administration thinks has a role in assisting
North Korea's nuclear program, the Wall Street Journal reported on
Monday.
U.N. diplomats say the two countries have started discussions on a
possible U.N. sanctions resolution in response to the nuclear test
earlier this month, but Beijing has not said directly whether it will
support tougher steps against North Korea.
Obama met Li on the sidelines of the annual United Nations General
Assembly session in New York.
"Both leaders condemned North Korea’s September 9 nuclear test and
resolved to strengthen coordination in achieving the denuclearization of
the Korean Peninsula, including by invigorating cooperation in the
United Nations Security Council and in law enforcement channels on North
Korea," a White House statement said.
China is isolated North Korea's most important diplomatic backer and its
biggest trading partner.
It has been angered by Pyongyang's repeated nuclear and missile tests
and signed on to increasingly tough U.N. sanctions, but it has said it
believes such steps are not the ultimate answer and called for a return
to talks with North Korea.
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Chinese Foreign Minister Wang Yi told his Japanese counterpart last week
China opposes "unhelpful" unilateral sanctions on North Korea but will
work within the United Nations to formulate a response.
Washington has pressed Beijing to do more to rein in North Korea. The
United States has said it is willing to negotiate with the North if the
country commits to get rid of its nuclear weapons, which Pyongyang has
refused to do.
HONGXIANG PROBE
The U.S. Department of Justice (DoJ) is preparing as early as this week
to announce legal action against Chinese firms suspected of providing
financial assistance to Pyongyang, the Journal reported, citing
officials familiar with the matter.
It said DoJ prosecutors visited Beijing twice last month to make their
Chinese counterparts aware of alleged criminal activities being
committed by Liaoning Hongxiang Industrial.
A social media post last week from the police in Liaoning, the
northeastern border province of China, said they were investigating the
firm's alleged long-term involvement in "serious economic crimes" and
that relevant suspects were cooperating.
A report by Asan Institute for Policy Studies in Seoul and C4ADS in
Washington says it identified more than $500 million in trade from
January 2011 to September 2015 between the North and the Liaoning
Hongxiang Group, which states on its website that it trades heavily with
the North.
The figure includes more than $360 million in imports from North Korea
by one group company, Dandong Hongxiang Industrial Development Co., an
industrial machinery and equipment wholesaler.
“While no judgment is being made on the final use of these funds, trade
at this volume is of particular note. By one estimate, this amount would
have been almost enough to both fund North Korea’s uranium enrichment
facilities, and to design, make and test its nuclear weapons,” the
report said.
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![](../images/092016pics/news_v37.jpg)
President Barack Obama (L) shakes hands with Chinese Premier Li
Keqiang during their meeting in the Great Hall of the People in
Beijing November 12, 2014. REUTERS/Kevin Lamarque
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Certain assets related to the company, its founder and top executive
Ma Xiaohong, and some of her relatives and associates, have been
frozen by Chinese authorities in recent weeks, according to
government and corporate filings cited by the Journal.
The Asan report said its trading of goods that could qualify as
potential military and nuclear dual-use products under U.S. export
restrictions were of particular concern.
The companies identified have had dealings with sanctioned North
Korean entities, the report said.
Chang Yong-seok, senior researcher at the Institute for Peace and
Unification Studies, Seoul National University, said this case was
symbolic and could have real practical impact.
"This was the U.S. taking China into consideration and working with
China. More such cases may follow if the U.S. or South Korea have
firm evidence ... Chinese companies that have capacity for producing
or securing goods for North Korea may be worried now,” he said.
China's Foreign Ministry said relevant departments were
investigating Liaoning Hongxiang Group and were following the
provisions of U.N. resolution 2270, which imposed tighter sanctions
on North Korea in March in response to its fourth nuclear test in
January and the launch of a long-range missile a month later.
Representatives of the U.S. Department of Justice and Hongxiang
Industrial were unavailable for comment.
The Liaoning Hongxiang Group is also heavily involved in North
Korea-related shipping, with Ma and other people associated with the
group owning and operating a combined fleet of 10 ships that
regularly sail between the North and China.
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Ma, who served on Liaoning's People's Congress before resigning at
the weekend, is described by Chinese media as the most successful
businessperson in Dandong involved in cross-border trade with North
Korea.
Government records say Ma's investment in Hongxiang was frozen on
Sept. 2.
(Reporting by Jeff Mason, David Brunnstrom, Michelle Nichols and
Arshad Mohammed; Additional reporting by Sue-Lin Wong in BEIJING and
Ju-min Park and Jack Kim in SEOUL; Editing by Bill Rigby and Will
Waterman)
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