A pick up in bilateral trade

China appears to be increasing its cross-border trade with North Korea, despite United Nations sanctions imposed in March in response to Pyongyang's fifth underground nuclear test, in January, and the subsequent test launch of a rocket.

Instead of demonstrating a new-found fondness for the regime of Kim Jong Un, however, analysts believe Beijing's decision to relax its sanctions is more of a warning to Seoul and Washington.

"China is sending a clear message that if other countries want its cooperation in ensuring that North Korea scales back its nuclear weapons and missile programs, then those nations will have to accommodate China's interests," said Jeff Kingston, director of Asian Studies at the Japan campus of Temple University.

Uppermost in the minds of the politburo in Beijing, he told DW, will be the planned deployment of the US military's Terminal High-Altitude Area Defense (THAAD) system in South Korea to counter the estimated 1,000 missiles that North Korea is capable of launching.

THAAD is a long-range theater defense system that acts as the upper tier of a two-tiered defense against ballistic missiles. With an extremely fast operational speed, THAAD missiles are designed to engage targets at a range of up to 200 kilometers and at altitudes of 150,000 meters.

Beijing opposition

Beijing has expressed its strong opposition to the system being deployed so close to its own borders and is apparently concerned that its advanced radar and targeting capabilities could be turned against China.

"Seoul's decision to deploy THAAD has pushed Beijing to loosen whatever trade sanctions it had imposed on the North and to show to the world that it still intends to put its own best interests first," Kingston said.

Sanctions agreed under Resolution 2270 by the UN Security Council on March 2 initially appeared to be working.

Satellite images taken of the Chinese border city of Dandong and Sinuiju, on the North Korean bank of the Yalu River, have showed fewer trains, trucks and ships loading up on the Chinese side of the frontier. And reports of North Korean agents passing counterfeit currency in China and Hong Kong, as well as Pyongyang selling fishing rights off the west coast of the peninsula to Chinese fishing fleets for a paltry $30 million, have also hinted at the regime's financial crisis.

However, official customs data released by China showed that trade with the North stood at around $505 million in June, up 9.4 percent on the same period last year.

Media and anecdotal reports from the border also suggest that more trucks and trains are once again crossing the frontier.

"I recently read a report that mining products are now going across the border, and those products are explicitly banned by the UN sanctions," said Stephen Nagy, an associate professor of politics at Tokyo's International Christian University.

Neither weak nor strong

Nagy said it is "quite clear" that China wants neither a strong and belligerent North Korea nor a weak regime that teeters on the brink of collapse, with all the uncertainties that entails. "Beijing wants a stable government in North Korea, but the Chinese also want other countries with a voice in the region to understand and respect their own security concerns," he added.

A second demonstration of China apparently siding with North Korea took place in the UN Security Council after its members were not able to reach a unanimous decision on condemning Pyongyang for firing a series of Rodong medium-range ballistic missiles into the Sea of Japan earlier this month.

The launches violated UN sanctions and China had supported strongly worded criticisms of the North in the aftermath of similar launches earlier, but declined to do so on this occasion.

The diplomatic impasse evolved after China demanded that criticism of the deployment of THAAD be included in the statement on the North Korean launches. "Serious alarm has been raised over the Security Council, which has become dysfunctional," the Yomiuri newspaper wrote in an editorial. "If its failure to issue a statement of condemnation sends North Korea the wrong message, the country could conduct further provocations.

"China's stance, of placing higher priority on opposing the THAAD deployment than on deterring North Korea's provocations, is alarming," it added.

'No good options'

Unfortunately, , there are "no good options" for getting out of the situation that each of the participants have painted themselves into, said Temple University's Kingston.

"South Korea feels deeply threatened by the North and sees THAAD as one way that it can provide an effective defense," he said. "And that leaves it boxed in between its most important trading partner, China, and its security partner, the US.

"And, given the choice it has to make between economic and strategic interests, it is going with the strategic," he said.

But Nagy is more optimistic.

"South Korea cannot back down on THAAD so I believe there will be some sort of negotiated settlement that goes some way to addressing China's concerns," he said. "For its part, China needs to get back on board with the pressure on North Korea and to show that it is playing a leadership role in the region."