In its first openly acknowledged sanction against their ally, the Bank of China has shut down the account of North Korea’s Foreign Trade Bank and stopped all transactions with the lender. The North Korean bank has been accused by the United States of supporting Pyongyang’s nuclear development program.
Even though no details have been released about the move, this is perceived by many observers as a sanction against the reclusive state for refusing to stop their nuclear tests, despite the additional sanctions imposed by the United Nations and other countries led by the United States and Japan. China is North Korea’s key backer and the Bank of China is the country’s biggest state-owned lender, subject to instructions from the government. However, an analyst said that this doesn’t mean that China will back-off on their stance of supporting Pyongyang in order to maintain regional stability.
China has supported the UN sanctions but has also said that they are not the “fundamental way” to fix the situation. Observers say that Beijing’s main reason for not wanting to aggravate the situation is for fear of hundreds of thousands of North Korean refugees crossing over Chinese borders should there be highly combustible moves by any of the involved countries. Stephanie Kleine-Ahlbrandt, the Beijing-based director of Northeast Asia for the International Crisis Group said that cutting off ties with the bank will earn China some points with the international community. But it’s still too early to judge the effect this will have on Pyongyang until it is understood what this sanction entails.
Meanwhile, in a change of pace from the usual rhetoric between the two countries, Japan praised China’s move, with Chief Cabinet Secretary Yoshihide Suga saying this will definitely affect North Korea. “We hail such a response made by China,” Suga said.