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China to Limit Oil Supply to North Korea -- Update

23 Sep 2017 5:43 am
By Josh Chin 

BEIJING--China said it will reduce oil exports to North Korea in accordance with United Nations sanctions, squeezing an important source of economic support as Pyongyang pushes to build up its nuclear arsenal.

Starting Jan. 1, exports of refined petroleum to North Korea will be limited to 2 million barrels a year, while exports of natural gas will be banned entirely, the Commerce Ministry said in a statement posted on its website late Friday.

China will also ban textile imports from North Korea, the ministry said, cutting off another key source of revenue for Pyongyang after Beijing banned imports of North Korean coal earlier this year.

U.S. officials say North Korea earned $760 million last year by exporting textiles, the last major economic sector that hadn't yet been targeted by U.N. sanctions.

As North Korea's chief trading partner and energy supplier, China sits at the center of international efforts to exert economic pressure to end--or at least slow--Pyongyang's aggressive pursuit of nuclear-tipped long-range missiles. The relationship between Beijing and Pyongyang, officially described as "close as lips and teeth," has been strained by North Korea's nuclear ambitions.

At the same time, China has resisted measures it fears could cause the collapse of the North Korean regime, which could send a flood of refugees into northern China and upset the balance of power in the region.

China pushed back against U.S. demands for a complete oil embargo in the latest sanctions package, approved by the U.N. Security Council earlier this month after North Korea tested what it claimed was a hydrogen bomb. Instead, the sanctions called for a 30% reduction in North Korean oil imports, nearly all of which come from China.

The Commerce Ministry statement didn't provide comparable data, and it wasn't clear how much of a reduction the 2 million barrels represented in China's oil exports to Pyongyang.

Critics of the sanctions say North Korea's economy is built to withstand scarce fuel supplies, and that such pressure is unlikely to convince its leader, Kim Jong Un, to give up his nuclear program.

President Donald Trump has repeatedly criticized China for not using its full leverage in dealing with North Korea. China argues that sanctions alone won't work, and that the U.S. needs to sit down with Mr. Kim to negotiate a solution.

Write to Josh Chin at josh.chin@wsj.com

(END) Dow Jones Newswires

September 23, 2017 01:43 ET (05:43 GMT)

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