China Eases NK Sanctions
In a move that may give a boost to Kim Jong Il’s increasingly desperate regime, Chinese authorities announced the easing of trade restrictions between the North and Chinese border provinces. Daily NK reports that North Korean citizens are now able to open bank accounts in China and to settle transactions in Yuan. Daily NK reports on the ramifications of this move:
With the adoption of the system, North Korean people and companies can open Yuan bank accounts within China after some formalities and use the accounts for trade settlement with their Chinese business partners. Accordingly, North Korea is now able to buy foreign currencies such as dollars and euros with its Yuan income from trade. In addition, North Korea can legally bring in foreign currencies or send them to third countries
North Korean companies used to have difficulties of making a trade settlement with China in cash or by barter since the U.S. enacted financial sanctions on North Korea and China imposed economic sanctions regarding remittance and bank accounts after North Korea’s nuclear tests. However, China too suffered from the sanctions as the amount of Yuan smuggled into North Korea has skyrocketed proportional to the increasing volume of trade between North Korea and China.
By taking such measures, China is allowing North Koreans to help themselves through increasing trade and by giving them the opportunity to earn foreign currency. The results may help to ease some of the problems associated with the ongoing famine and thus help strengthen Kim’s grip on power.
UPDATE: Bloomberg reports that Japan will extend its sanctions on North Korea for lack of cooperation on denuclearization and other outstanding issues:
Japan will extend sanctions against North Korea for six months after the communist country failed to make progress on returning abducted citizens and dismantling its nuclear program, the government’s top spokesman said.
The government will announce details of the extension tomorrow following cabinet approval, Chief Cabinet Secretary Nobutaka Machimura said during a press conference in Tokyo. Japan banned imports from North Korea and barred its ships from calling on Japanese ports after North Korea test-fired missiles and a nuclear device in 2006.
The timing of this announcement is interesting, seeing as how it comes just one day after the North unilaterally announced the Six-Party Talks stalement had been solved. This lends creedence to the position that nothing has really changed–at least as far as Japan’s conditions are concerned. Japan may be trying to signal its dissapointment that the abductee issue wasn’t mentioned in the latest meeting between Hill and Kim. Economically, the sanctions won’t affect North Korea much as they’ve already been in place. All that is happening is the period the sanctions are effective is being extended.