China Will Give Kim Jong Il $10 Billion, Violating the Spirit and Letter of U.N. Security Council Resolutions It Voted For

[Update: More here, at the Daily NK]

Consistent with reports I’d linked previously, China is now offering a financially beleaguered Kim Jong Il a massive bailout, in obvious retaliation for America’s assistance in helping Taiwan to defend itself against the Chicom missiles aimed at its cities, and likely also as a way to bail Kim Jong Il out after the self-inflicted catastrophe of The Great Confiscation.

China’s decision factors in the assumption that America lacks the spine to respond by escalating our military assistance to Taiwan and helping it to develop an indigenous nuclear ICBM capability:

Beijing will invest billions of dollars in North Korea as an incentive to bring the communist leadership to the table of six-party nuclear negotiations. This was revealed by a source inside North Korea, the decision is linked to the meeting last week between Kim Jong-il and a high profile Chinese diplomat.

The day after the face to face with Wang Jiarui – Head of International Department of the Chinese Communist Party – and the “Dear Leader”, took place the chief North Korean nuclear negotiator visited Beijing. Pyongyang claims that before the resumption of six-party talks – involving North and South Korea, China, Japan, Russia and the United States -, international sanctions are removed and a peace agreement is signed with Seoul. It would replace the armistice that ended the Korean War of 1950/53.

Many Chinese state-owned banks and other multinational companies have entered into an investment plan in North Korea amounting to 10 billion dollars to build roads, ports and houses. Over 60% of the sum, reports the South Korean Yonhap News Agency, comes from the Bank of China and the agreement should be signed in mid-March. []

As the Korea Times asks, $10 billion for what, exactly? There’s absolutely nothing in North Korea’s recent behavior that justifies any sort of reward. North Korea is still balking at returning to six-party talks, it has been caught red-handed violating U.N. weapons trade sanctions (also with China’s involvement), and its behavior toward the South has been belligerent to say the least.

The move is just the latest example of Chinese duplicity in undermining U.N. Security Council resolutions it voted for, just months after their passage. Here is what UNSCR 1874 says about financial aid to North Korea:

18. Calls upon Member States, in addition to implementing their obligations pursuant to paragraphs 8 (d) and (e) of resolution 1718 (2006), to prevent the provision of financial services or the transfer to, through, or from their territory, or to or by their nationals or entities organized under their laws (including branches abroad), or persons or financial institutions in their territory, of any financial or other assets or resources that could contribute to the DPRK’s nuclear-related, ballistic missile-related, or other weapons of mass destruction-related programs or activities, including by freezing any financial or other assets or resources on their territories or that hereafter come within their territories, or that are subject to their jurisdiction or that hereafter become subject to their jurisdiction, that are associated with such programs or activities and applying enhanced monitoring to prevent all such transactions in accordance with their national authorities and legislation;

19. Calls upon all Member States and international financial and credit institutions not to enter into new commitments for grants, financial assistance, or concessional loans to the DPRK, except for humanitarian and developmental purposes directly addressing the needs of the civilian population, or the promotion of denuclearization, and also calls upon States to exercise enhanced vigilance with a view to reducing current commitments;

20. Calls upon all Member States not to provide public financial support for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade) where such financial support could contribute to the DPRK’s nuclear-related or ballistic missile-related or other WMD-related programs or activities; [UNSCR 1874]

This is why the U.S. Congress should add a provision to its money laundering statutes to help enforce UNSCR 1874. This does not mean we have no capacity to respond to this double-dealing, of course. Unless China can demonstrate to the Treasury Department in detail how it will meet the accounting requirements of these resolutions, Treasury should assume that those funds will be used in part for North Korea’s banned WMD programs and impose sanctions under Executive Order 13,382 against the “state-owned banks and multinational corporations” that help funnel this aid.


  1. Can we be sure that this isn’t the PRC’s standard maintenance policy to keep the DPRK from complete collapse and being absorbed into a pro-US ROK? If this is in any way related to our Taiwan policy, then we are creeping back towards 1950 in a variety of ways. The difference being in 1950 the PRC held none of our debt.


  2. Your link to the Daily NK shows this is not yet a concluded deal — so the leak itself suggests a trial balloon. Either China wants to disarm opposition in the UN, or there is disquiet even in China or the DPRK. I think you’ve hit it — this is an attempt to disarm opposition.

    The proposal as reported by Daily NK suggests investment by China primarily in the north of the country — where are China’s strategic interests, the mines, the nuclear plant and storage facilities, and the missile sites — while keeping a buffer zone below Pyongyang to the South where a “unified” state could be created if everything went really bad. The proposal for a main line and road from Tumen to Rason gives China military access, a means to interfere with Vladivostok, a secondary threat area against Japan, and a quick exit route for the North’s nukes if there were ever a need to steal them away.

    This is obviously advantageous to China: it’s unlikely to produce food or fuel in the immediate future for the starving people of the DPRK. It looks to me to be a “military-industrial complex” loan, with a small payoff to the Party in the promise to build more housing in Pyongyang. I bet the housing will only be scheduled for Stage III, after the mines are reopened, and the invasion road (or flight path) from Sinuiju to Pyongyang is built.


  3. Looks like all the reports of impending collapse were wrong.

    China will never allow its puppet state North Korea to collapse.


  4. 10 billion is a perfect gift for the man who has everything. Another year older, another year closer to the grave.

    白頭山줄기 내려 錦繡江山 三千里
    將軍님 높이 모신 歡呼聲 울려 가네
    太陽의 偉業 빛내신 人民의 領導者
    萬歲 萬歲 金正日將軍

    大地의 千萬 꽃도 그 사랑을 傳하고
    東西海 푸른 물도 그 業績 노래하네
    主體의 樂園 가꾸신 幸福의 創造者
    萬歲 萬歲 金正日將軍

    鋼鐵의 膽力으로 社會主義 지키여
    내 나라 내 祖國을 世上에 떨치시네
    自主의 旗幟 높이 든 正義의 守護者
    萬歲 萬歲 金正日將軍

    We’ll see. I think David’s take is probably mostly correct. China is not giving up much here. Too many dollars sloshing around Beijing.


  5. Start investing in “Welcome to the Inner Cháoxiān Autonomous Region” signs today!

    Joshua wrote:

    in obvious retaliation for America’s assistance in helping Taiwan to defend itself against the Chicom missiles aimed at its cities, and likely also as a way to bail Kim Jong Il out after the self-inflicted catastrophe of The Great Confiscation.

    I think it’s more the latter, as it would have happened with or without help to Taiwan. No matter how much hard currency Pyongyang gets from tourists, progressive South Korean governments, ethnic Koreans in Japan trying to rescue their relatives in North Korea from starvation, etc., China will be there in the end to bail them out because they don’t want a US-friendly state right on their border.

    That doesn’t mean it’s a done deal, of course, as the North Korean people themselves may not tolerate Beijing meddling in their future.

    Anyway, I’m glad to read your take on this.


  6. What’s the point of your mixed script praise of Kim Jong-il? North Koreans ditched Chinese characters a long time ago. How long did it take you to rewrite that song in mixed script and post it here to impress us? I’ll be impressed when you figure out how to use a proxy to view websites zf doesn’t want you to see.


  7. Sonagi:

    I find it to be ridiculous. Sorry if you were offended. It was not meant as genuine praise for KJI. By the way, the version with Hanja is freely available online. Have a look.

    I have an office filled with Chinese who don’t know how to set up a proxy. I got some software forwarded to me once, which I wasn’t able to install. I can use a proxy website, but it’s incredibly slow. I noted that the site was blocked partly to make a point. Yes, I can confirm that is not blocked here (yet).