China demanded North Korea pull back from the brink in its confrontation with the US yesterday in a boost for Donald Trump as the US imposed new banking sanctions on the regime.
Meeting the leaders of South Korea and Japan, Mr Trump said he was signing an executive order that would instruct the US Treasury to target North Korean front companies and any banks that facilitated transactions for the regime.
Mr Trump praised Beijing as it emerged that China had circulated instructions to its own banks to strictly enforce UN sanctions and cut off North Korean entities.
"For much too long North Korea has been allowed to abuse the international financial system to facilitate funding for its nuclear weapons and missile programmes," he said.
Wang Yi, the Chinese foreign minister, told the UN General Assembly, that China was urging restraint on Pyongyang.
“We urge [North Korea] not to go further along a dangerous direction. We call upon all parties to play a constructive role in easing tensions. There is still hope for peace and we must not give up. Negotiation is the only way out, which deserves every effort. Parties should meet each other half way, by addressing each other’s legitimate concerns.”
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Sergei Lavrov, the Russian foreign minister, also made a plea for negotiations as he addressed the UN but was indirectly critical of Mr Trump’s warning that the US could wipe out North Korea in a confrontation.
“We are witnessing a very dangerous confrontation spiral," Mr Lavrov said, speaking in place of the Vladimir Putin. "We resolutely condemn the nuclear missile adventures of Pyongyang in violation of Security Council resolutions.
“But military hysteria is not just an impasse, it's disaster. There is no alternative to political and diplomatic ways of settling the nuclear situation on the Korean Peninsula."
North Korea's top diplomat, Foreign Minister Ri Yong-ho, yesterday likened Mr Trump's comments to "the sound of a barking dog".
Mr Trump said the new sanctions aim to cut off international trade and financing that Kim Jong Un's regime uses to support its nuclear and ballistic missile weapons programmes.
“North Korea’s nuclear programme is a grave threat to peace and security in our world, and it is unacceptable that others financially support this criminal, rogue regime," he said.
Reports from China said the central bank told banks to strictly implement United Nations sanctions against North Korea. Officials said the move would alleviate US pressure over its belief that Beijing has not been tough enough over Pyongyang’s repeated nuclear tests.
Mr Trump called the move "very bold" and "somewhat unexpected", and he praised Chinese president Xi Jinping.
Chinese banks have come under scrutiny for their role as a conduit for funds flowing to and from China’s increasingly isolated neighbour.
The sources said banks were told to stop providing financial services to new North Korean customers and to wind down loans with existing customers, following tighter sanctions against Pyongyang by the United Nations.
The sources said lenders were asked to fully implement United Nations sanctions against North Korea and were warned of the economic losses and reputational risks if they did not do so.
Tensions between the United States and North Korea have ratcheted up after the sixth and most powerful nuclear test conducted by Pyongyang on September 3 prompted the United Nations Security Council to impose further sanctions last week.
