End of a special relationship? China looks at North Korea with frustration and even fear

As recently as a few months ago, when Pyongyang was planning to launch a missile or carry out a nuclear test, it would send an envoy to Beijing or notify it in advance through other channels. Not so anymore, it seems.

Observers here say there was no warning delivered before Friday's missile went up from North Korea and set the region on edge.

No courtesy note was sent before the ground shook in northeast China from the massive underground nuclear blast next door earlier this month. It left many in China angry and exasperated.

"Many here now see North Korea as a major liability," says Zhao Tong, North Korea expert at Beijing's Carnegie-Tsinghua Centre for Global Policy. "And it appears North Korea doesn't mind annoying Beijing."

Relationship sours

"The situation is degenerating all the time," he says.

The relationship between the two historical allies and ideological soulmates has gone from special to strained.

China bristles every time the United States says it could rein in North Korea if it wanted.

"China is not the focus," said Chinese Foreign Ministry spokesperson Hua Chunying on Friday. "China is not the driving force behind the escalating situation. And China is not the key to resolving the issue."

Making sacrifices

Indeed, she said, Beijing has made "enormous sacrifices" in an effort to force Pyongyang to abandon its weapons program.

• 'We're scared, obviously': Japanese worry over growing North Korean nuclear threats
• North Korean leader vows to complete nuclear weapons program

Last week at the United Nations Security Council, China agreed on a package of tough new sanctions that includes a cap on oil exports to North Korea resulting in 30 per cent less fuel for Pyongyang. Washington had lobbied hard for a total embargo, but China and Russia refused.

The UN package also bans the export of North Korean textile products and freezes the employment of workers from the country abroad. In all, the sanctions could cost Pyongyang $1.3 billion US in lost revenues.

Beijing's official position has long supported a gradual increase in sanctions, but a year ago something this severe would have been unthinkable.

Fifteen missile tests this year and one huge nuclear explosion jolted China into taking a tougher line.

It has resisted out of fear of what could happen in North Korea if sanctions really bit. The economy could collapse in chaos, maybe even the regime itself.

North Korea seen as a buffer zone

North Korean leader Kim Jong-un could be swept from power and China's fickle, but tolerable buffer zone with more hostile U.S. forces in South Korea would disappear. Millions of refugees could stream across the border.

For years, that has prompted officials in China to turn a blind eye to companies who do bustling business with North Korea and banks some state owned that allowed Pyongyang to evade international restrictions on financial transactions. China still accounts for 85-90 per cent of North Korea's trade.

And despite China's decision to ban coal imports from North Korea earlier this year potentially denying Pyongyang income from its most lucrative export "the regime's nested trading infrastructure remains largely in place (in China)," according to a recent studyby non-profit research group C4ADS.

This past week China's biggest banks announced they are cracking down, refusing to accept any new transactions from North Korean individuals or companies. Some banks say they are also starting to clear out existing accounts.

This would be especially significant in China's border city of Dandong, through which three quarters of trade with North Korea flows. But there are still ways to circumvent the ban because Chinese citizens living in North Korea can continue to do business.

Still, the mood has shifted in Beijing, according to experts like Cheng Xiaohe, deputy director of Renmin University's Centre for China's International Strategic Studies.

"China could impose a total oil embargo against North Korea. That's becoming increasingly possible if North Korea does not stop making provocations," he says.

Some even say this isn't just rooted in frustration, but also in fear.

Hostility toward China

"As China imposes tougher sanctions," says Carnegie-Tsinghua's Zhao Tong, "North Korea has started to threaten China. The elements of hostility in the bilateral relationship arebecoming greater."

Days after North Korea tested its most powerful nuclear device yet, China's military staged a mock exercise pretending there was a surprise attack from the Korean Peninsula. That's new, and telling.

Many experts now see North Korea as a major liability for Beijing.

"China is running the risk of adding another nuclear-armed enemy in its own neighbourhood," says Zhao.

• Why North Korea's latest nuclear test is likely to trigger a tougher response - but not military action
• China says it's OK with 'paying the price' for North Korea sanctions

Now Beijing says it's up to the two countries at the centre of this dispute North Korea and the United States to sit down and work things out.

It says direct negotiations are the only viable approach, after North Korea agrees to stop its tests and the U.S. and South Korea agree to stop their joint military exercises.

So far, neither side has agreed to comply.