Chinese President Xi Jinping flew down to Pyongyang on Thursday for a state visit to North Korea. It was a first by a Chinese state leader in 14 years. Experts say this move is symbolic and significant.
The visit — which comes days before Xi is set to meet with U.S. President Donald Trump at the G-20 summit — will be “big on symbolism and big on substance,” said John Park, director of the Korea Project at Harvard Kennedy School.
Washington and Beijing are currently stuck in a deadlock that started last year and apparently investors are expecting a positive response from the G-20 meeting.
Xi’s visit to Pyongyang had another being the nuclear talks between the U.S. and North Korea have reached a dead end as both the leaders walked away from the negotiation meeting in February summit in Hanoi.
Tom Rafferty from the Economist Intelligence Unit said on a phone interview that the visit shows that both China and North Korea “are engaged in a bit of messaging to the U.S.”
Nonetheless, it is important to note the significance of having such a high-level Chinese state-visit, Rafferty said, adding that it doesn’t mean there are no problems between the neighboring countries. The meeting between Xi and North Korean leader Kim Jong Un is more out of “convenience” and “pragmatism” than true comradeship, he said.
Xi’s entourage includes high-level diplomats such as Chinese Foreign Minister Wang Yi and head of the state economic planner, He Lifeng, according to Chinese state media Xinhua.
“The economic dimension is crucial and in many respects — the 1%, the elites in North Korea … (have) already migrated into the Chinese market place,” Park said on Thursday.
He brought into notice that the meeting between the two leaders was a “further elevation” and “rebuilding this party-to-party dynamic”.
Around 90% of Korea’s export-import trade is with China which also includes food and energy supplies.
Although China has been staying within the guidelines of the United Nations sanctions on North Korea, Park said that an “easing” of sanctions by Beijing toward Pyongyang can be expected. Fundamentally, he said, China is a “lifeline for Pyongyang.”
“North Korea is an issue of importance to both sides but I don’t think will play a major role on trade,” Michael Hirson, China and Northeast Asia practice head at Eurasia Group, told CNBC in an email on Wednesday.
“Xi’s trip is partly an effort to remind Trump of the key role that China plays on the North Korean nuclear issue,” he said.
However, “Trump is not so panicked over the situation in North Korea that he will feel an urgent need to pull punches on trade just to seek Beijing’s cooperation,” he added.
Harvard’s Park emphasized that this could also be an opportunity for both sides.
“There is a saying in international relations, don’t let a good crisis go to waste,” said Park.
Analysts and the media have speculated that Beijing could use its relationship with Pyongyang as leverage against Trump, but Park said he thinks that “ultimately what China is seeking to preserve” is a “dual freeze.”
He explained that Beijing will want North Korea to stop testing nuclear missile trials; while also hope the United States and South Korea will stop conducting large scale military exercises on the peninsula.
Both the United States and China are trying to gain more leverage, Sian Fenner from Oxford Economists told CNBC’s Street Signs on Thursday.
She pointed out that China’s threat to withhold rare earth metals and its warning to citizens against traveling to the U.S. were ways to tell Washington: “Look, we got more things that we can use” in this trade war.
Fenner said that though North Korean could be used by China as leverage in the trade talks with Washington, the meeting between Xi and Kim is more about China’s diplomatic role in the region.
“I don’t think that’s going to change anything economically,” she said.