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Why China Can't Cut Off North Korea

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North Korea's latest threats of a rocket test beg the question of why China does not do more to stop its little communist brother from acting so rancorously. After all, there is no other country in the world that provides as much food and fuel to the regime. Without this sustenance, North Korea would perish. So why doesn't China just cut them off?

China would certainly have a lot to gain by taking a harder line. It could end the black hole of Chinese economic assistance for the past half-century that has been North Korea. It could relieve itself of the frustration of three decades of preaching reform on its neighbor. Beijing has used every visit since 1980 by North Korean leaders to tour them around Chinese cell phone, fiber optics, and car factories, but to no avail. China could help its own reputation as a regional leader by putting pressure on Pyongyang to stop the provocations, which would seem to be important as China prepares for its transition of leadership to Xi Jinping next year. Indeed, the last thing Xi needs is for the world to blame him for all of North Korea's truculence, yet Beijing is always stuck cleaning up after North Korea's mess and acting as its defense lawyer in the court of public opinion. This is hardly the best way for a new leader to come to power in China. Using its economic leverage to tame North Korea would also help immensely to build some bona fides in the U.S.-China relationship, which is otherwise growing more tense and antagonistic.

Why doesn't China bite the bullet? Contrary to what you might expect, the answer has little to do with communist ideological allegiance than with grand strategy, local politics, and economics. In terms of strategy, the policymakers in Beijing do not see a tough line, which could lead ultimately to a North Korean collapse, as being in China's strategic interests. This is because the decision makers on North Korea are not in the foreign ministry in China, they are in the party and in the military. And for both groups, a collapse of North Korea would leave a united Korea, that is a military ally of the United States, directly on its border. Such an outcome would only reinforce in Chinese minds an important lesson of history - instability on the Korean peninsula has never redounded to Chinese interests. The last two times this occurred, the result was war with Japan (1895) and the U.S. (1950), which cost China dearly.

What China loses in economic handouts to the North, it is rapidly making back in a series of lucrative mining contracts. According to Goldman Sachs, the North's relatively well-endowed mineral deposits are worth 140 times the country's GDP, including deposits of some rare earth minerals. Starting from about 2007, China has been undertaking a strategy of economic predation investing heavily in copper, coal, iron, gold, zinc, and nickel mines to feed its growing economy. Moreover, it can operate in the North on its own terms without concerns for compliance with international labor standards or precautions.

The late House Speaker and iconic American politician Tip O'Neill reminded us that all politics is local. That is certainly the case for China when it comes to North Korea. The country sits adjacent to Jilin and Liaoning provinces in China. These two inland provinces do not do nearly as well as the booming coastal provinces. Beijing cannot afford instability in the North that could lead to a potential flow of hordes of refugees into these provinces. Moreover, stability allows for the mineral resources to flow from North Korea into these two provinces, and also allows for Chinese use of the only year-round ice-free port in the area for the landlocked provinces.

For all of these reasons, China has worked itself into an uncomfortable corner when it comes to North Korea. It can't stand the way Pyongyang drags China's name through the mud with every provocation. At the same time, it cannot turn the screws for fear of causing the regime to unravel. For North Korea's part, it does not like the way China mistreats it like a poor province, and sucks it dry of resources, but has little choice in the matter if it wants to survive. Does the Chinese leadership like this mutual-hostage situation? Absolutely not. Is Beijing more comfortable with a friendly yet weak and sometimes embarrassing North Korea on its southern flank than they would be with a rich, powerful, democratic, US-aligned, unified Korea? You bet.

Victor Cha is professor at Georgetown and former director of Asian affairs on the National Security Council (2004-7). He is the author of The Impossible State: North Korea, Past and Future [Ecco, $29.99].