China to Back Fresh UN Sanctions on North Korea Fuel

  • Petroleum product sales may be cut by 90 percent: proposal
  • Move would come in retaliation for late-November missile test
In this Bloomberg Profiles, we look at the third ruling autocrat in North Korea’s "Kim Dynasty." 

China has signaled it’s ready to back another round of United Nations sanctions that will slash exports of fuel to North Korea, according to people familiar with the matter.

The UN Security Council is set to vote on Friday at 1 p.m. in New York on the fourth resolution against North Korea in 13 months. It comes in response to a Nov. 28 missile test that leader Kim Jong Un said proved he could deliver a nuclear bomb to the U.S.

If approved, the resolution would cut deliveries of petroleum products, including diesel and kerosene, by almost 90 percent, to the equivalent of 500,000 barrels. That’s a further reduction from a September resolution that reduced petroleum product sales to 2 million barrels annually starting Oct. 1, down from 4.5 million barrels. The new resolution would also cap crude imports at current levels of about 4 million barrels annually.

China, North Korea’s largest trading partner and a veto-wielding member of the Security Council, has said it will support the resolution, according to a Security Council diplomat. An EU ambassador to the Security Council also said he was “confident” China would vote in favor. Both asked not to be identified because the discussions are private.

China’s foreign ministry didn’t immediately respond to faxed questions.

Haley Warning

North Korea last month declared its nuclear program complete after firing a missile that it said could deliver a nuclear warhead anywhere on U.S. territory. The U.S. has repeatedly pushed China to curb oil sales to North Korea, with Ambassador Nikki Haley last month warning that “we can take the oil situation into our own hands” if China doesn’t act.

The resolution would require for the first time that all nations declare the total amount of refined products shipped to North Korea. China, which the U.S. says supplies most of North Korea’s crude, hasn’t reported any volumes in its published customs data since 2013. The U.S. in September said the shipments are sent via the Dandong-Sinuiju pipeline.

North Korea uses refined oil products for taxis, generators and local heating, according to William Brown, an economist at Georgetown University who studies North Korea. The crude oil can still be refined in North Korea and used by the military, he said.

‘Better Than Nothing’

“This is better than nothing,” Brown said in an email of the resolution.

The resolution caters to China’s concern that if all crude oil were cut off it could prompt Kim to lash out at the U.S., sparking a conflict or setting off internal dissent that precipitates the collapse of his regime. Either outcome could mean a humanitarian disaster, a flood of refugees and possibly U.S. troops on China’s border.

China’s representative to the UN has repeatedly called on the U.S. to adhere to four conditions regarding North Korea: no regime change, no regime collapse, no accelerated reunification and no military deployment north of the 38th parallel dividing the Korean Peninsula.

The UN proposal would also curtail exports of food products, machinery and electrical equipment, and authorize countries to inspect and impound ships suspected of carrying illegal cargo to and from North Korea.

— With assistance by Ramsey Al-Rikabi

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