China probes firm suspected of aiding North Korea nuclear project

BEIJING (AFP) - A Chinese company under investigation by local police may have aided North Korea's nuclear programme, think tanks in South Korea and the US have said, just days after Pyongyang conducted its fifth nuclear test.

Dandong Hongxiang Industrial Development logged more than US$530 million (S$722.5 million) in two-way trade with North Korea between 2011 and 2015, the Asan Institute for Policy Studies in Seoul and C4ADS in Washington said in a report released Monday (Sept 19).

Information in online advertisements and databases show that the company sold pure aluminium ingots, aluminium oxide and other products that could qualify as potential military and nuclear dual use products under US export restrictions, it said.

The company, which is based on the North Korean border in Liaoning province's Dandong city, exported around US$171 million worth of goods to the North between 2011 and 2015, the report said, adding its imports from the country totalled more than US$360 million during the same period.

"While no judgement is being made on the final use of these funds, trade at this volume is of particular note," it said.

"By one estimate, this amount would have been almost enough to both fund North Korea's uranium enrichment facilities and to design, make, and test its nuclear weapons," it said.

Also notable was the company's partnership with the Korea National Insurance Corporation, a government entity that has been described by the European Commission as generating resources that could "contribute to the DPRK's nuclear-related, ballistic missile-related or other weapons of mass destruction-related programmes".

Liaoning's public security department said in a statement last week that they have placed Dandong Hongxiang and its bosses under investigation for "serious economic crimes involved in trade activities".

The company did not respond to phone calls from AFP seeking comment.

Asked about the investigation during a regular press briefing, China's foreign ministry spokesman Lu Kang said that "relevant departments in China are handling and investigating this case", but would not confirm whether there was a connection to Pyongyang's nuclear programme.

China is North Korea's key diplomatic protector and provider of trade and aid.

But Beijing has been increasingly frustrated by Pyongyang's defiance of international sanctions to press ahead with its nuclear tests.

Chinese Premier Li Keqiang and US President Barack Obama at a Monday meeting in New York condemned the North's September 9 nuclear test and vowed to "strengthen coordination in achieving the denuclearisation of the Korean Peninsula", including in law enforcement channels on Pyongyang, the White House said in a statement.