China limits oil supply to North Korea and bans textile trade

235

International desk, September 23: China has moved to limit North Korea’s oil supply and will stop buying textiles from the politically isolated nation, it said on Saturday.

China is North Korea’s most important trading partner, and one of its only sources of hard currency.

The ban on textiles trade will hurt Pyongyang’s income, while China’s oil exports are the country’s main source of petroleum products.

The move follows fresh sanctions agreed at the UN earlier this month.

China, traditionally North Korea’s only ally, toughened its stance in response to North Korea’s sixth nuclear test – its largest to date.

A statement from the commerce ministry said restrictions on refined petroleum products would apply from 1 October, and on liquefied natural gas immediately.

A limited amount, allowed under the UN resolution, would still be exported to North Korea.

The current volume of trade between the two countries – and how much the new limits reduce it by – is not yet clear.

China and Russia had initially opposed a proposal from the United States to completely ban oil exports, but later agreed to the reduced measures.

The AFP news agency reports that petrol prices in Pyongyang have risen by about 20% in the past two months.

“It was $1.90 yesterday, today it is $2,” a petrol station employee told the agency. “I expect the price will go up in the future.”

North Korea has little energy production of its own, but does refine some petroleum products from crude oil it imports.

It does produce coal, some $1.2bn of which was exported to China in 2016, but China had already strictly limited its imports of North Korean coal earlier this year.

Source: Agencies