This is huge. The government of China has cut off fund transfers to North Korea through its banks according to bank employees. This essentially cuts off virtually all hard currency flowing into the rogue state.
Chinese banks have stopped financial transfers to North Korea under government orders, bank employees said Friday. And at an appearance with Secretary of State, China's foreign minister nudged the North to resume negotiations over its nuclear program and assured Washington that China would carry out sanctions on Pyongyang.
"We hope all relevant parties will maintain coolheadedness, adopt a prudent and a responsible approach and adhere to peaceful dialogue," Li Zhaoxing said as Rice concluded crisis talks in Asia following the North's Oct. 9 nuclear test blast.
China, which is North Korea's longtime protector, has been reluctant in the past to use economic pressure for fear Kim Jung Il's government might collapse.
But Chinese leaders were stung when the North ignored their warnings not to test-fire missiles over the summer, and again when it defied Beijing by detonating the underground blast this month. China previously had reduced food aid to North Korea amid complaints that Pyongyang had ignored Chinese interests.
The move by China's banks could deal a significant blow to the already impoverished North. China is North Korea's top trading partner — accounting for more than half its total foreign trade of less than $4 billion last year — and is a key conduit for its hard currency.
China's actions are considered key to enforcing U.N. sanctions on the North over the test, and to coaxing the North to back away from the nuclear brink and rejoin talks.
This could be a death blow to Kim Jong Il's regime. It would be a very wise idea to keep a very watchful eye on Kim right now. He may get desperate for cash in a very short time.