LDN - Business

At Chinese border with North Korea, trade cools but few signs of strain

[April 13, 2017] By Philip Wen and Joseph Campbell

DANDONG, China (Reuters) - Despite heightened tension on the Korean peninsula and North Korea warning of a nuclear strike against any sign of U.S. aggression, there were few signs of strain on Thursday on the main border post between China and the reclusive nation.

In Dandong, through which about three-quarters of China's trade with North Korea flows, long queues of trucks heading in both directions formed across the Friendship Bridge, despite what locals said was a relative lull due to the North's most important national holiday on Saturday marking the birth of founder president Kim Il Sung.

China has signed up to wide-ranging United Nations sanctions designed at halting Pyongyang's nuclear and ballistic missile programs, and local traders told Reuters that blanket bans on key North Korean commodities exports like coal, iron ore powder and precious metals have dealt a blow to business.

Trade across the border is now mainly food, textiles, plastic goods, other household items and some commodities, the traders said.

Dandong residents said they were well aware of the mounting tension on the Korean peninsula, fueled by Pyongyang's repeated ballistic missile and nuclear tests, South Korea's installation of the THAAD anti-missile system in response, and a U.S. aircraft carrier group heading to the region in a show of force.

Most expressed a little anxiety, but were largely confident the situation would not flare out of control.

"If a war starts, then the situation on the peninsula will completely get chaotic," said 66-year-old retiree Cai Zhengsun, who was strolling along the Yalu River, which marks the border between the two countries.

"When Xi Jinping spoke with the U.S. president, he mentioned maintaining the peace on the peninsula," Cai said, referring to Wednesday's telephone conversation between the leaders of the China and the United States.

"(Xi) won't allow any attacks. Although the U.S. is the world's hegemonic power, it wouldn't dare to take actions."

China, which shares a long land border with North Korea, is the reclusive state's sole major ally and main trading partner.

At their Florida summit meeting last week, U.S. President Donald Trump pressed Xi to do more to curb North Korea's nuclear program. Trump said on Tuesday that North Korea was "looking for trouble" and Washington would "solve the problem" with or without China's help.

The worry is that the reclusive North could hold its sixth nuclear test or more missile launches in defiance of United Nations sanctions around the time of its founder's birth anniversary. Trump has put North Korea on notice that he will not tolerate provocative actions.

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North Korean soldiers plow the land with an ox from the North Korean side of the Yalu River, as a Chinese boat sails by with tourists, near Sinuiju in North Korea and Dandong in China's Liaoning Province, April 13, 2017. REUTERS/Aly Song

TRADE SLOWED

Trade has slowed at the border, Chinese transport workers said.

At one logistics center for metal shipments visited by Reuters, workers were busy unloading North Korean trucks arriving from across the border. They said flows of North Korean trucks had slowed to a trickle of three or four a day since February, down from the usual 20.

"Only shipments of lead are being allowed through," said the center's foreman, who asked to be identified only by his last name, Zhang. "We used to trade all metals here, gold, silver, iron ore powder from North Korea – just not copper, they keep it there for military use."

China has long been wary of cutting off trade completely for fear that it could trigger a regime collapse that would send millions of North Koreans surging across the border seeking refuge.

China and North Korea enjoy "normal trade activities", Chinese Foreign Ministry spokesman Lu Kang told reporters in Beijing.

"It is beyond dispute for us to maintain normal trade relations with North Korea while observing our obligations to the Security Council resolutions," Lu said.

However, away from official channels, unregulated gray market trade continues to flourish. At Dandong's Yicuomao port, a stream of Chinese fishing vessels carries grains and potatoes, besides alcohol, candy and cooking gas, for barter with North Korean fishermen.

The vessels return from one-day round trips to North Korean waters full of fresh seafood. The Chinese fishermen who work the boats say they are often shocked by the apparent poverty of their North Korean counterparts who look "close to starvation".

"What happens to the food we bring when it gets there, I don't know," one said.

(Additional reporting by Christian Shepherd in Beijing; Editing by Raju Gopalakrishnan)

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