Pyongang. Photo: KIM WON-JIN/AFP/Getty Images

Chinese companies have been caught secretly selling oil to North Korea, according to a major South Korean news source and the Financial Times.

  • Why this matters: These reports could mean that China is violating UN sanctions against North Korea. UN Security Council Resolution 2375 — passed in September after yet another nuclear test by Kim Jong-Un — prohibits ship-to-ship transfers of certain goods, including oil, to North Korea.
  • Bill Bishop, author of the Axios China weekly newsletter, emails some quick analysis: "If the Chinese government ignores oil smuggling the sanctions will be less effective. And if the Trump Administration views Beijing as not faithfully implementing what it agreed to then new sanctions against more Chinese individuals and firms, including a major oil company and a large financial institution, are increasingly likely. "

The political backdrop:

  • Trump and other senior U.S. officials have been giving China credit for its "tougher" line against North Korea. Persuading President Xi to crack down on Kim Jong-Un has been the Trump Administration's main strategy for dealing with the nuclear threat from Pyongyang.
  • It was only yesterday that Reuters reported — citing Chinese customs data — that "China exported no oil products to North Korea in November."
  • But North Korea analysts who've watched Beijing's interactions with its economically-dependent neighbor over many years have remained skeptical amid these optimistic reports. (China has historically done the bare minimum to convince the U.S. that it's "getting tough" with North Korea, only to continue propping up the rogue regime.)

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