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U.S. sanctions as leverage against China over N. Korean threats

U.S. sanctions as leverage against China over N. Korean threats

Posted March. 10, 2017 07:15,   

Updated March. 10, 2017 07:19

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The United States has slapped ZTE Corp., China’s biggest telecom equipment maker, with a fine of nearly 1.2 billion U.S. dollars, the largest amount ever levied on a foreign company, for having violated the U.S. sanctions on North Korea and Iran. A U.S. investigation found ZTE exported 320 million dollars’ worth of U.S. mobile phone networking devices to Iran for six years from 2010 and shipped mobile phones to North Korea on 283 occasions knowing that the transactions would violate the sanctions. The Trump administration’s lashing out at ZTE, which is virtually controlled by the Chinese government, was a message that it would mind having frictions with Beijing to resolve the North Korean nuclear issue. “Those who flout our economic sanctions, export control laws, and any other trade regimes, will not go unpunished,” warned U.S. Secretary of Commerce Wilbur Ross.

Although Chinese Foreign Minister Wang Yi said Beijing opposed unilateral sanctions against Chinese companies, he also said that the U.S. and China could become “excellent partners.” He noted, “China believes in the equality of all countries, large and small. We don't believe some countries should lead other countries.” It appears that he toned down his rhetoric a bit ahead of the U.S.-China summit to be held in Washington next month. However, it is outrageous for China to talk about “equality of all countries” at a time when Beijing is implementing cowardly retaliations against South Korea and the South Korean conglomerate Lotte over the deployment of the Terminal High Altitude Area Defense (THAAD) system. It is questionable whether China, which keeps a low profile before the U.S. while threatening South Korea with its power, deserves a seat as a permanent member of the United Nations Security Council, which is responsible for keeping world peace.

It is possible that the U.S. will put further pressure on China as the U.S. administration is investigating Huawei’s transactions with North Korea. Huawei is a much larger electronics and telecommunications equipment maker than ZTE. In September last year, the Obama administration imposed sanctions on China’s Liaoning Hongxiang Industrial, including a freeze on its assets in the U.S., for providing the North with nuclear weapons and missile materials. However, the administration did not in earnest impose “secondary boycott” sanctions targeting Chinese companies transacting with North Korea. Washington used secondary boycott sanctions against Iran in 2010, prompting Tehran to sign the Iran nuclear agreement. If the Trump administration applies them to China, it will be able to prompt Beijing to take more active actions on the North Korean nuclear issue.

U.S. Secretary of State Rex Tillerson will visit Japan, South Korea and China next week to discuss regional issues including Pyongyang’s nuclear weapons development. The visit, which comes at a time when Washington is reviewing all options including a pre-emptive strike, a regime change and re-listing of North Korea as a State Sponsor of Terrorism, is an opportunity for South Korea to discuss toughened U.S. policies toward China and North Korea. At this opportunity, Seoul and Washington should have in-depth discussions about ways to put pressure on China, rather than simply calling for Beijing’s cooperation. To change North Korea, China has to change first.