The rhetoric is certainly flying, via the SMH:
US President Donald Trump escalated his rhetoric against North Korea on Tuesday, writing on Twitter that the country “is looking for trouble” and encouraging North Korea’s neighbour China to “solve the problem.”
In a second message, Mr Trump said he told China’s President Xi Jinping during his visit to Florida last week that China would get a better trade deal with the US if Mr Xi helped reign in North Korea’s missile program, apparently linking China’s cooperation on security issues with its economic actions.
Do-nothing Malcolm has turned marshal:
Prime Minister Malcolm Turnbull has backed US calls for China to do more to halt North Korea’s nuclear ambitions, as Beijing hardens its stance towards the hermit kingdom amid increased concern about a potential underground nuclear test this month.
Speaking to reporters in New Delhi on Tuesday, Mr Turnbull said North Korea’s conduct was “reckless” and was threatening peace and stability not just in the region but across the globe.
“We continue to call on China to exercise the undoubted influence it has over the North Korean regime to pull it back from further reckless conduct,” Mr Turnbull said.
The local population is being softened up, via The Australian:
The acting US ambassador to Australia has declared there is “extreme concern” that North Korea will be able to strike the west coast of the US and Australia with nuclear missiles within two years, as the hermit kingdom warned it was ready for “war” with America.
With tensions on the Korean peninsula growing, a US carrier strike group was yesterday steaming towards the region and there were unverified claims that China had sent 150,000 troops to its border with North Korea.
Pyongyang responded defiantly, saying it was ready to react to “any mode of war desired by the US”, amid signs Washington is planning a possible military strike if North Korea conducts another nuclear or ballistic missile test.
Chinese troops at the border reeks of fallout containment, via Rowan Callick:
A South Korean Defence Ministry spokesman said any action would be taken on the basis of “close collaboration between South Korea and the US” and said people should not be misled by online rumours of an “April crisis on the peninsula”.
The often strongly nationalist Global Times warned earlier, in an editorial in its Chinese language edition, that “North Korea should not misjudge the situation at this crucial moment; it should not venture to take more risks by thinking a sixth nuclear test will lead to nothing as did the previous five”.
“If it does so, responses from both Beijing and Washington might be unprecedented, even becoming a ‘turning point’.”
And there is this, via Reuters, further suggesting China has shifted:
A fleet of North Korean cargo ships is heading home to the port of Nampo, the majority of it fully laden, after China ordered its trading companies to return coal from the isolated country, shipping data shows.
Following repeated missile tests that drew international criticism, China banned all imports of North Korean coal on Feb. 26, cutting off the country’s most important export product.
To curb coal traffic between the two countries, China’s customs department issued an official order on April 7 telling trading companies to return their North Korean coal cargoes, said three trading sources with direct knowledge of the order.
Following the US/China summit there appears to be some Great Power co-ordination going on here. Though how much is a moot and pressing question. How it serves Chinese interests to have a US carrier group sitting off its coast is quite unclear! From late today:
Chinese President Xi Jinping has told President Donald Trump in a phone call today that Beijing is willing to work with Washington on ending North Korea’s nuclear weapons program but wants a peaceful solution.
…The call, brief details of which were released by the Chinese foreign ministry, also come as tensions have risen with the deployment of a US aircraft carrier to the area and the conducting of the biggest-ever US-South Korea military exercises.
…Mr Xi told Mr Trump that China insists on peace and stability on the Korean Peninsula and wants to find a solution to the problem through peaceful means. “China insists on realising the denuclearisation of the peninsula … and is willing to maintain communication and co-ordination with the American side over the issue on the peninsula,” Xi was quoted as saying by state broadcaster CCTV and other official media outlets.
This is extreme nuclear brinkmanship. If the US is prepared to bomb North Korean facilities, unless the regime buckles it’s next step will be to threaten to widen the conflict by raining missiles on Japan and South Korea.
Needless to say, the diplomacy here could get very ugly.
For markets, as tensions rise I would expect bonds, gold and the USD to be bid, stocks and commodities to come under increasing pressure (though iron ore might get a risk premium if things get really bad) and the Aussie dollar to tank.
