July 13, 2017 10:00 am JST

G-20's failure over North Korea bodes ill for the future

US, allies split with China, Russia over how to deal with Pyongyang's provocations

HIROSHI MINEGISHI, Nikkei staff writer and TETSUSHI TAKAHASHI, Head of Nikkei's China Headquarters

U.S. President Donald Trump talks to China's President Xi Jinping during the G-20 summit in Hamburg, Germany, on July 7. © Reuters

HAMBURG/BEIJING Member countries left the Group of 20 summit in Hamburg, Germany on July 8 after blowing an opportunity to help defuse the dangerous situation brewing on the Korean Peninsula.

While North Korea crowed about its July 4 test-firing of an intercontinental ballistic missile, the nations most concerned with the issue met on the sidelines and came away largely split about what to do. One side favored talks rather than increasing pressure on the rogue state, and the other wanted just the opposite.

North Korea, seen as a growing threat to neighboring countries with its nuclear and missile programs, gained most from the divide, which may embolden it to take more bullish and provocative actions.

Before attending the summit, Chinese President Xi Jinping had a major worry: a possible launch of another ICBM by North Korea during the two-day event.

His concern was not unfounded. North Korea had humiliated China before with a missile launch on May 14 during an international meeting on the Belt and Road Initiative -- Beijing's ambitious plan to create a massive economic zone -- and immediately before bilateral talks between Xi and Russian President Vladimir Putin.

XI SPARED If North Korea had test-fired another missile during the G-20 summit, the U.S. and other countries would have certainly urged Beijing to ramp up pressure against Pyongyang. But Xi was spared further embarrassment, allowing China, crucial to reining in North Korea, to continue going its own way.

This could be seen in the July 8 U.S.-China meeting on the summit sidelines. U.S. President Donald Trump said politely that the situation remained a major problem requiring action and thanked Xi for all he had done, acknowledging Beijing's halting of North Korean coal imports in accordance with U.N. Security Council resolutions.

But Trump was believed to be less than happy. Many experts think that he stressed during the meeting the need to increase pressure on the North.

Still, Xi seemed unconcerned. According to China's state news agency Xinhua, the president said that nations needed to respond to North Korean acts that contravene U.N. Security Council resolutions. However, they must also step up efforts to promote talks to manage and control the situation, the president stated, reiterating his position.

After the meeting, Trump appeared to have had no choice but to admit that the North Korean problem would not go away soon. "It may take longer than I'd like ... But there will be success in the end, one way or the other," Trump said.

China also responded bluntly to Japan when the key U.S. ally urged it to take a harder stance on North Korea. In the Japan-China sideline the same day, Japanese Prime Minister Shinzo Abe stressed the need for additional sanctions by the U.N. Security Council to prompt China to play a more constructive role. Xi, however, brushed off Japan-U.S. concerns, stating that sanctions were necessary but that China placed greater importance on dialogue. He also said that he is opposed to sanctions by individual countries.

Given the upcoming National Congress of the Communist Party in the fall -- held every five years to reshuffle party leadership -- Xi is concerned that an oil embargo and other tough sanctions would throw North Korea into chaos, unleashing hordes of refugees to its border. Furthermore, the country serves as a strategic buffer between China and U.S.-backed South Korean forces. Taking a tough stance on North Korea, therefore, is not an option for Xi.

TRUMP'S MOVE The question of Washington's patience now remains. With military intervention far from practical, the U.S. seems to be at a loss for a solution. There is real possibility of the U.S. leaning hard on China to take stronger action against the North. Trump is already sanctioning a Chinese bank that does business with Pyongyang and has approved weapons sales to Taiwan.

The U.S. and China will hold bilateral economic talks on July 19 to check the progress of the 100-day plan they agreed on in April to correct trade imbalances. Until now, Trump has shelved issues other than North Korea -- such as Chinese currency manipulation -- in exchange for Beijing's cooperation.

But the U.S. trade deficit with China for the January-May period rose 4% on the year to about $93 billion. If the U.S. strategy that links diplomacy, security and economy gets full play, it remains unclear how much pressure China could withstand.

While his relationship with Trump cools, Xi is warming to Putin. In lockstep with the Russian president, who stresses dialogue with Pyongyang, Xi has made it clear that they are against any get-tough measures.

After the China-Russia summit on July 4 in Moscow, Putin said that the North Korean crisis is an important diplomatic issue common to both countries. The joint statement affirmed that China and Russia were opposed to armed forces entering Northeast Asia from outside the region under the pretext of an increasing threat from the North -- an apparent reference to the U.S. -- and that a peaceful solution should be found through dialogue.

In the statement, they also urged the U.S. to immediately rescind deployment of the Terminal High Altitude Area Defense (THAAD) anti-missile system in South Korea, calling it a grave infringement of strategic security interests of countries in the region, including Russia and China, and claiming it is not helpful at denuclearizing the Korean Peninsula.

Xi made sure to reward Putin for his efforts. On July 4, the China Development Bank and the Russian Direct Investment Fund agreed to set up a 68 billion yuan ($10 billion) investment fund. It will be used to invest in projects related to the Belt and Road Initiative and the Eurasian Economic Union formed by Russia and former Soviet countries.

ALLIES DIVIDED Meanwhile, South Korea, the U.S. and Japan are not in complete agreement on how to deal with the North. In a sideline between Abe and South Korean President Moon Jae-in, the two officially confirmed that they would work together on the North Korean issue bilaterally, and trilaterally with the U.S.

But the approach urged by the two leaders differed substantially, with Abe saying: "It is necessary to put maximum pressure on North Korea now, and it is not the time for talks. To put the stop to the nuclear and missile development, cutting off the sources to obtain foreign currencies is needed." In contrast, the South Korean president's executive office said it is necessary to reopen talks between South and North Korea to reunify the Korean Peninsula, citing Moon's remarks.

The day before, during a pre-summit sideline between the U.S., Japan and South Korea, Moon expressed his view that talks will help achieve the ultimate goal, which is denuclearization of the Korean Peninsula. After the three-nation confab, Trump offered an untypically muted Twitter statement, saying that it was a good meeting. The low-key tweet was understandable, given that North Korea would likely try to take advantage of any cracks in the alliance.

MERKEL MUTE Debate about North Korea failed to gain much traction among the other G-20 members.

After talks on the first day, German Chancellor Angela Merkel was about to leave a news conference when she turned back, saying that she forgot to address the North Korean issue. She went on to state merely that the G-20 leaders shared major concerns and hoped the U.N. Security Council would find an adequate solution.

This seemingly staged oversight demonstrated that Merkel, who chaired the summit, was not as concerned about the North Korean issue as others.

During the first day of talks, Moon and others called for joint action on North Korea, describing the situation as a threat to global peace. Merkel's response was blunt, stating that the G-20 was a forum that should focus on the global economy and financial markets rather than diplomacy. The chancellor clearly revealed her intent not to involve Germany too deeply in the complicated matter.

According to the North's state-run Korean Central News Agency, North Korean leader Kim Jong Un visited the mausoleum of his grandfather and country's founding figure, Kim Il Sung, on July 8 to mark the 23rd anniversary of the elder Kim's death.

Although not present at the G-20 summit, Kim Jong Un's presence loomed large, with the shock waves of his July 4 test-launch still reverberating around the world. While superpowers struggled to find consensus on how to deal with the unruly nation, one can only wonder what secret ambitions Kim shared in his prayers to his deceased grandfather.

Nikkei staff writers Issaku Harada and Koya Jibiki in Hamburg contributed to this article.

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