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Tillerson in China as U.S. presses North Korean economic squeeze

[September 30, 2017] By Phil Stewart and Ben Blanchard

BEIJING (Reuters) - U.S. Secretary of State Rex Tillerson will hold top-level talks in China on Saturday as the United States looks to tighten an economic squeeze aimed at persuading North Korea to retreat from its nuclear arms and missile programs.

The United States sees China as critical to averting a military confrontation with Pyongyang, which is fast advancing toward its goal of developing a nuclear-tipped missile capable of reaching the United States.

U.S. officials say Beijing appears increasingly willing to cut ties to North Korea's economy by adopting U.N. sanctions, after long accounting for some 90 percent of its neighbor's foreign trade.

But to succeed in reaching any kind of diplomatic solution, Tillerson would need to overcome some basic U.S. assumptions about North Korea and China.

The first would be getting North Korean leader Kim Jong Un to view nuclear weapons as a liability, not a strength. The U.S. intelligence community does not believe Kim is likely to willingly give up his weapons program.

"(Tillerson's) working against the unified view of our intelligence agencies, which say there's no amount of pressure that can be put on them to stop," Senator Bob Corker told a Senate hearing on Thursday.

Kim, Corker said, saw nuclear-tipped intercontinental ballistic missiles as "his ticket to survival."

The second big challenge for Tillerson would be getting China to impose economic sanctions on North Korea so harsh that Kim might question his future if they persisted.

U.S. officials, speaking on condition of anonymity, say they believe China's priority is stability on the Korean peninsula, since a political collapse would almost certainly push destabilizing waves of refugees into northeastern China.

China says it will strictly and fully enforce U.N. resolutions against North Korea and its Commerce Ministry on Thursday said North Korean firms in China and joint ventures in China and overseas would be shut down by January, in line with the latest UN resolution.

But the latest sanctions need time before they begin to bite, the official China Daily cautioned in an editorial on Friday.

U.S. President Donald Trump, who is due to visit China in November, has called for it to do more on North Korea and has promised to take steps to rebalance a trade relationship that his administration says puts U.S. businesses at a disadvantage.

Tillerson, whose arrival in Beijing was delayed due to mechanical problems with his aircraft, told Chinese Foreign Minister Wang Yi that Trump was looking forward to his China visit.

Tillerson will also hold talks with President Xi Jinping, and China's top diplomat State Councillor Yang Jiechi, who outranks the foreign minister.

The U.S. State Department did not suggest any major announcements would be made on Tillerson's trip but the China Daily said it needed to be more than a "routine show of mutual goodwill" ahead of Trump's visit.

"The guest and his hosts must ... straighten at least one thing out - what each can expect from the other to ensure the situation on the Korean peninsula does not deteriorate and spiral out of control," it said.

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U.S. Secretary of State Rex Tillerson (L) shakes hands with Chinese President Xi Jinping (R) before their meeting at the Great Hall of the People on September 30, 2017 in Beijing, China. REUTERS/Lintao Zhang/Pool

UNACCEPTABLE OPTIONS

Senator John McCain, who heads the Senate Armed Services Committee, said this week he was skeptical.

"The ideal, we all know, is China. China has not done anything for the last three presidents. I'm not sure that they're going to do anything with this one," McCain told a security conference in Washington hosted by the Institute for the Study of War.

McCain has repeatedly warned that the United States, which neither wants to live with a nuclear-armed North Korea nor go to war with it, may be faced with "unacceptable options."

U.S. officials have declined to discuss operational plans, but acknowledge that no existing plan for a preemptive strike could promise to prevent a brutal counterattack by North Korea, which has thousands of artillery pieces and rockets trained on Seoul.

White House National Security Adviser H.R. McMaster said on Monday that even military options short of a preventative strike, such as a naval blockade meant to enforce sanctions, carried risks of military escalation.

Tillerson has in the past expressed hope for dialogue with North Korea. U.S. diplomats have also sought to assure Pyongyang that Washington is not seeking to oust Kim, even as Trump and Kim exchange insults and threats of war.

"We are not seeking regime change or collapse," State Department Assistant Secretary Susan Thornton, who is traveling with Tillerson, told a Senate hearing on Thursday.

Thornton's remarks were welcomed in Beijing, which is calling for a peaceful solution to the crisis.

Chinese Foreign Ministry spokesman Lu Kang said the United States had issued many "positive signals" that the North Korean nuclear issue should be resolved via talks.

Still, it is unclear how and when negotiations with Pyongyang might be possible.

McMaster said there was no set list of preconditions for talks but added Pyongyang's capabilities had advanced too far to simply freeze its program in return for concessions.

He cited academic reports about actions North Korea could take to suggest it was serious about talks, such as allowing International Atomic Energy Agency inspectors access to key sites and stating that Pyongyang was willing to denuclearize.

"What we want to see is negotiations that begin under fundamentally different conditions" than in the past, McMaster said.

(Reporting by Phil Stewart, Ben Blanchard and Michael Martina in Beijing; Editing by Simon Cameron-Moore)

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