Xi, Putin, Trump, and North Korea: Are we back to square one?

The honeymoon between President Trump and Chinese President Xi Jinping, cemented over that famous “lovely piece of chocolate cake” in Florida, is seemingly coming to a sticky end.

The stated purpose of the two-day summit in Moscow that concluded on July 3 and 4 between China’s President Xi Jinping and Russia’s President Vladimir Putin was to foster the solid and strengthening economic and political bilateral relations between Moscow and Beijing at the expense of the USA, ahead of the G20 Summit.

The Trump Administration has expressed mounting frustration with Beijing’s efforts to rein in North Korea’s Supreme Leader Kim Jong-Un, with more tweets unleashed by President Rump exhorting China to rein in North Korea, with an implied threat of an ‘or else’ Syria style tomahawk cruise missile strike being contemplated, similar to the one which was launched during the now famous chocolate cake dessert serving between the Chinese and American leaders.

Chinese officials warn neither Xi nor Putin will tolerate a retaliatory military strike on North Korea. Chinese officials in turn are getting frustrated at US naval encroachments, around the disputed Pacific Ocean Chinese built-islands, and continue to indicate Beijing’s intention to maintain normal economic and trade relations with North Korea, including the continuation of exports of crude oil and refined oil as needed to ensure the North Korean people’s basic needs are met.

That full commitment has shifted however on the heels of the provocative ballistic missile test just conducted by Pyongyang over the US July 4 holiday, with the US now calling for a special meeting of the United Nations Security Council to focus on the growing threat from Pyongyang.

Double suspension

China’s Foreign Minister Wang Yi and his Russian counterpart, Sergei Lavrov, have issued a joint statement in response to North Korea’s launch of an Intercontinental Ballistic Missile that is being pointedly referred to in Beijing as a reiteration of China’s previous demands for a “double suspension” – meaning it is directed jointly at both Pyongyang to suspend its missile and nuclear test programs and at the US and South Korea to refrain from large scale military exercises.

Furthermore, the joint statement did not just condemn North Korea, it also strongly opposed the US installation of the THAAD missile defence system in South Korea. Despite this concerted, lukewarm response from Beijing and Moscow in light of the unprecedented nature of the North Korean missile launch, it is believed that China wants to flex its own muscles and ramp in North Korea by taking some limited action and that Beijing will support a UN Security Council statement of condemnation against Pyongyang.

The limited range of actions might includes a withdrawal of about 20 Chinese information engineering experts working in Pyongyang and a temporary reduction in trade volume by Chinese State Owned Enterprises with North Korea or the continued suspension of coal imports from North Korea by Chinese SOEs, and a temporary halt to crude oil exports to North Korea, before winter sets in.

On the last point, that even while China suspends oil exports to North Korea, Russia has committed exports of crude, as well as refined, oil to the regime of Kim Jong-Un leaving the door open for some strongman horse trading between Presidents Trump and Putin, which apparently took place at the marathon first face to face Putin –Trump meeting at the G20 Summit.

Chinese officials believe the ICBM launch was timed by Kim Jong-Un for the G20 summit in Hamburg, in order to attract worldwide attention and recognition of North Korea’s missile technology and deterrence, to force the US to engage in direct dialogue with North Korea, and to enlist Beijing and Moscow to press Washington to refrain from large scale military exercises on the Korean peninsula.

Those goals, to some extent, have been achieved already. While the launch has, and will, once again escalate tensions on the Korean peninsula, Chinese officials believe the possibility of direct military conflict between the US-Republic of Korea and the DPRK, North Korea, is still very slim.

Frosty relations

But relations between the US and China are nevertheless frosty, and among other issues, Xi will specifically draw a “red line” to Trump over the United States’ mounting overtures toward Taiwan, adding to yet more “red lines” being drawn by countries around the world especially on Syria, whether it is Turkish, French, British, US, Iranian, Syrian or even Syrian Kurdish “red lines”.

From the face-to-face meetings, Xi will demand that Trump reject a US Congressional amendment to the National Defence Authorization Act that would “re-establish regular ports of call by the US Navy at Kaohsiung or any other suitable ports in Taiwan.”

If Washington were to allow US Navy vessels to make port calls in any port in Taiwan, it would be seen as a major provocation, and Chinese officials warn Beijing would begin by suspending normal bilateral relations with the US in response.

Meanwhile, Xi will recommit to Putin China’s readiness to work with Russia towards building the western route Sino-Russian natural gas pipeline (the Power of Siberia -2) and the Sakhalin-Khabarovsk-Northeast China pipelines, despite construction on both pipelines not beginning for 18 months.

China will also flex its muscles on trade policy with Europe, where the National Development and Reform Commission and Ministry of Commerce will take the lead through the second half of 2017 to support imports from countries that are more supportive of China’s gaining of Market Economy Status – especially Germany and the UK – while deliberately limiting imports from those that are less supportive – including France and Spain. Lets hope for the sake of a troubled world on many fronts that these initiatives on open trade turn into “green lines”.
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Dr. Mohamed Ramady is an energy economist and geo political expert on the GCC and former Professor at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia.