China is frequently viewed through a myopic lens when it comes to North Korea. It is technically committed to the country’s defense under the 1961 Sino-North Korean Mutual Aid and Cooperation Friendship Treaty and is a lifeline to the Hermit Kingdom that undermines efforts to sanction the regime over its continued nuclear weapons and ballistic missile tests. China comprises roughly three-quarters of North Korea’s imports and exports and even after the 2016 nuclear test, China emphasized that sanctions should not harm “normal trade”. However, oversimplifying China-North Korea relations creates a convenient scapegoat for Western observers frustrated over the lack of progress on rein in Pyongyang. This overlooks long-standing tensions between the two countries and risks overestimating China’s influence over its neighbor. At the same time, Chinese influence encourages domestic reforms in North Korea and although piecemeal, these reforms suggest ways to constrain North Korean belligerence.

China’s strategic interests in preventing a North Korean collapse are well noted. Beijing fears a greater flood of refugees into the northeast provinces and the potential of a unified Korea with thousands of American troops on their border. This in part justifies Chinese aid packages and toleration of Pyongyang’s brinkmanship and unpredictable behavior in order that the country’s position as a buffer state be maintained. However, China has not provided North Korea carte blanche and is increasingly willing to back United Nations resolutions and harsher sanctions while warming relations with South Korea in part to signal its displeasure. Chinese support for additional sanctions in December suggested to some the country’s willingness to push North Korea towards bankruptcy, although such claims not only overestimate North Korea’s vulnerability to sanctions but China’s goals. More broadly, despite having the greatest influence of any country over North Korea, China appears reluctant to change the status quo, balancing the role of reluctant partner with expectations that a rising China should play a greater role in restraining the aggressive behavior of its neighbor.

Meanwhile, North Korean leaders remain cautious of Chinese influence at the same time encouraging at the very least the appearance of close relations. Distrust dates back to Kim Il Sung shortly after the Korean War and both successor Kims have demonstrated their willingness to take action testing relations. For example, Pyongyang gave its neighbor only a twenty-minute warning of its nuclear test in 2006. Pyongyang continues to act in defiance of Chinese warnings, in effect calling China’s bluffs on enforcing stricter sanctions and drawing attention both to the limits of Beijing’s influence and to Pyongyang’s commitment to assert its sovereignty. Nor has there been an official meeting between China’s Xi Jinping and Kim Jong Un despite interest from Beijing.

China’s strategic interests necessitate a more economically viable North Korea. Decreasing North Korea’s aid dependency through mutually beneficial trade is consistent with this goal and similar claims made about China-Africa engagement. North Korea has long benefited from foreign aid, especially after the famine of the 1990s, with international humanitarian assistance in part freeing up the limited domestic resources for maintaining support among the elite and enhancing the military. North Korean foreign trade overall doubled between 2009 and 2014, before declining in 2015 due to sanctions. China comprised just under fifty percent of North Korea’s trade in 2004, but by 2011 this grew to roughly ninety percent. Trade with China increased by twenty percent in early 2016 alone compared to the previous year, but sanctions largely cut into Chinese imports in the second half of the year. Yet economic interdependence rather than Chinese handouts does little to eliminate the contradictions with North Korea’s Juche (self-reliance) ideology or Pyongyang’s concerns that trade will weaken the regime’s bargaining position vis-à-vis Beijing.

State-to-state economic relations are only one facet of this relationship and belies the fact that non-state actors have already encouraged domestic reforms in North Korea. Increasingly, private entrepreneurs on both sides of the Yalu River find means to trade; officials appear unwilling or unable to stop this. According to my work with Heon Joo Jung, Chinese investors in North Korea increasingly focus on the probability of profit generation, rather than ideological considerations. Investors furthermore require a guarantee of property rights and North Korea has enacted reforms precisely to assuage investor concerns of appropriation. These reforms contrast with previous and often half-hearted efforts to entice foreign investment through economic zones like the Rason Economic Zone and Sinuiju Special Administrative Region. Despite North Korea’s reluctance to acknowledge their domestic private economy, reforms in part instigated by a desire for Chinese investment are reshaping the country. These reforms may also generate demands among North Korea’s citizenry, identifying economic restructuring first-hand, for additional reforms.

Admittedly these are small steps towards enhancing trade and with North Korea’s history of rescinding reforms or enacting countermeasures to undermine private markets such progress may be short-lived. However, an economically more secure North Korea has more to lose through a brinkmanship policy and may feel more willing to return to the Six Party Talks framework. China also benefits from an economically more stable neighbor and thus may support additional sanctions in the short-term, while still emphasizing investment and trade opportunities in the long-term.

This article was originally published in CPI Analysis. The News Lens has been authorized to republish this article.

TNL Editor: Edward White