President Barack Obama says the US will lead the world in taking firm action against the threat posed by North Korea's nuclear test. But Pyongyang's isolation from most of the international financial and trading system will limit the impact of sanctions unless China can be persuaded to get tougher on its longtime ally.
The underground explosion Tuesday — pointedly conducted hours before Obama's State of the Union address, one of America's top political events — was quickly condemned by Obama as a "highly provocative act" that threatens U.S. security and international peace. North Korea, which gave Washington about 24 hours' notice before conducting its third and apparently most powerful atomic test yet, described it as a response to U.S. threats.
It marks a culmination of a progressive deterioration in ties with Washington since young leader Kim Jong Un took power a year ago. His tenure began with Pyongyang negotiating then upending an agreement that would have seen it receive food aid in exchange for nuclear concessions. The impoverished, authoritarian state has since honed its missile and weapons capabilities.
Even as a leadership transition in neighboring South Korea offered some hope of improved relations across the divided Korean Peninsula, the North has closed down the space for diplomacy and left the prospects of multinational aid-for-disarmament talks — in abeyance for four years — gloomier than ever.
"The regime in North Korea must know that they will only achieve security and prosperity by meeting their international obligations," Obama said in his annual address to Congress. "Provocations of the sort we saw last night will only isolate them further, as we stand by our allies, strengthen our own missile defense and lead the world in taking firm action in response to these threats."
The test underscored North Korea's determination to develop a nuclear deterrent against what it calls the threat of an invasion by the U.S., its enemy from the 1950-53 Korean War. Pyongyang warned that unspecified "second and third measures of greater intensity" could follow if Washington maintains its hostility — apparently opening up the possibility of further tests.
As the U.N. Security Council held an emergency meeting Tuesday that strongly condemned the test, U.S. Ambassador Susan Rice said Washington would be looking for the council to tighten existing sanctions and augment them.
The backing of China, a permanent council member with veto power, not only will be required to make new measures international law but also critical for their implementation. China, North Korea's wartime ally, is its main source of aid and accounts for more than two-thirds of North Korea's foreign trade.
In the past, Beijing has been reluctant to back more severe measures that could destabilize the North's hardline regime, which serves as a buffer between China and a democratic South Korea backed by U.S. forces.
There are signs that China's patience is wearing thin. Beijing reacted in unusually strong terms to a December long-range rocket launch by the North by agreeing to tightened U.N. sanctions on the country, a move that brought criticism from Pyongyang and was welcomed in Washington.
"China is in a difficult position now," said Evans Revere, a former State Department official for East Asia. "They made very public efforts to convince North Korea not to conduct the nuclear test, and they agreed in the previous U.N. Security Council resolution to even stronger measures if it does. China will be hard-pressed not to agree to something beyond what's already in place."
But how far China and its new leader, Xi Jinping, will agree to go is unclear. It has expanded its commercial ties with North Korea in recent years and was quick to endorse Kim Jong Un as Pyongyang's new leader after the death of his father, Kim Jong Il, in December 2011.
George Lopez, a former member of a U.N. Panel of Experts for monitoring North Korea sanctions, said steps that China could take range from greater control over substantial North Korean trade that moves through the Chinese port of Dalian, to restrictions on cash transfers and the travel of scientists and engineers.
Bonnie Glaser, a China expert at the Center for Strategic and International Studies think tank, said she expected Beijing to get tough enough with North Korea to satisfy the U.S., South Korea and Japan but not so harsh as to really put in jeopardy its relationship with North Korea or cause any instability.
Glaser said a key question in the debate at the Security Council would be whether China will back restrictions in the financial sector, which the Obama administration acknowledged could be one area to expand the impact of the sanctions regime that already bars North Korea from arms trading and targets certain companies suspected of aiding its missile and nuclear programs.
China, which likely remains wary of provoking Pyongyang, is thought to have resisted U.S. pressure for financial sanctions in the resolution approved in January in response to the rocket launch.
Punishing banks that hold North Korean funds is one area in which the U.S. — which has minimal trade with the North — has some leverage in terms of imposing its own restrictions if it chooses to, although it's unlikely to pursue such a step before it has exhausted the U.N. route. Republican lawmakers have pressed the Obama administration to do so, and support for such a step is likely to gain strength now.
California Rep. Ed Royce, the chairman of the House Foreign Affairs Committee, said Tuesday that the Obama administration's North Korea policy has failed and it needs to focus on crippling the North's military capabilities "through stringent sanctions that tackle its illicit activities and cuts off its flow of hard currency."
Washington has tried it before, and with considerable impact. In 2005, the Treasury's blacklisting of a bank in the Chinese territory of Macau accused of helping North Korean money laundering and other illicit activities had a major ripple effect. Other banks worried about jeopardizing their U.S. connections voluntarily stopped dealing with the bank and the North. China, however, opposed the step and it proved troublesome to undo when the diplomatic outlook improved.
Other than its efforts to step up sanctions, Revere said the U.S. is likely to boost missile defense capabilities with its allies South Korea and Japan — neighbors of North Korea who host U.S. forces — and conduct more military exercises in the volatile region to serve as a deterrent against aggression from Pyongyang.
Victor Cha, who served as a director of Asia policy in the George W. Bush White House, said the Obama administration needed to make clear that North Korea now constitutes a top-tier security threat to the U.S. and take a strong stance that would reverberate not just in the Security Council but in Beijing.
"I don't think we can wait until they have a finished product (a nuclear weapon that can hit the U.S.) before we say, 'This is serious,'" Cha said. "It's about time that we did and take advantage of the consternation in Beijing about North Korea doing this nuclear test despite high-profile warnings not to."