China Cuts Cash Flow to North Korea

As North Korea sticks its finger at the international community through grandiose demonstrations of military might, its largest economic backer is finally cutting off its cash flow.

Chinese banks have frozen the assets of all North Korean depositors, and they have halted all cash transfers to Kim Jung-Un’s regime.

The move is almost unprecedented as China has fed and powered the isolated nation even in times of strained relations.

According to the Council on Foreign Relations, China accounts for 70 percent of North Korean trade and support.

“China is currently North Korea’s only economic backer of any importance,” writes Nicholas Eberstadt, senior fellow at the American Enterprise Institute.

However, Beijing’s move may indicate Xi Jinping’s government has finally had enough of Kim’s blatant disregard for sound foreign policy. China may no longer be willing to keep the regime on its feet at the risk of regional warfare – something North Korea often risks.

Among the financial institutions severing the cash flow to North Korea is a branch of China’s largest bank, the Industrial and Commercial Bank of China.

“(The bank) had never told me why it was taking such measures, but it seems that they are related with the strained relations between North Korea and China,” said an anonymous ICBC employee to South Korean newspaper the Dong-A Ilbo.

The bank began suspending deposits and transfers of foreign currencies in and out of accounts with North Korean names in December.

Still, it’s unclear whether China is ready to charge at its ally with full-speed. Historically, it’s even been slow to back sanctions proposed by the international community against North Korea.

It’s also unclear whether China’s move would be enough to deter Kim Jung-Un’s ambitions.

“Until the sanctions and hard times begin to hit the leadership in Pyongyang personally, the madman may simply stick to his guns,” writes Hot Air’s Jazz Shaw.

Cutting its cash flow to the regime, however, may eventually lead to the rude awakening North Korea has feared.

 

 

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