US, China To Step Up Cooperation On North Korea

U.S. President Barack Obama and Chinese Premier Li Keqiang agreed on Monday to step up cooperation in the United Nations Security Council and in law-enforcement channels after North Korea's fifth nuclear test, the White House said.

China and the United States are also targeting the finances of Hongxiang Industrial, a Chinese company headed by a Communist Party cadre, that the Obama administration thinks has a role in assisting North Korea's nuclear program, the Wall Street Journal reported on Monday.

U.N. diplomats say the two countries have started discussions on a possible U.N. sanctions resolution in response to the nuclear test earlier this month, but Beijing has not said directly whether it will support tougher steps against North Korea.

Obama met Li on the sidelines of the annual United Nations General Assembly session in New York.

"Both leaders condemned North Korea’s September 9 nuclear test and resolved to strengthen coordination in achieving the denuclearization of the Korean Peninsula, including by invigorating cooperation in the United Nations Security Council and in law enforcement channels on North Korea," a White House statement said.

China is isolated North Korea's most important diplomatic backer and its biggest trading partner.

It has been angered by Pyongyang's repeated nuclear and missile tests and signed on to increasingly tough U.N. sanctions, but it has said it believes such steps are not the ultimate answer and called for a return to talks with North Korea.

Chinese Foreign Minister Wang Yi told his Japanese counterpart last week China opposes "unhelpful" unilateral sanctions on North Korea but will work within the United Nations to formulate a response.

Washington has pressed Beijing to do more to rein in North Korea. The United States has said it is willing to negotiate with the North if the country commits to get rid of its nuclear weapons, which Pyongyang has refused to do.

Hongxiang Probe

The U.S. Department of Justice (DoJ) is preparing as early as this week to announce legal action against Chinese firms suspected of providing financial assistance to Pyongyang, the Journal reported, citing officials familiar with the matter.

The report said DoJ prosecutors visited Beijing twice last month to make their Chinese counterparts aware of alleged criminal activities being committed by Hongxiang Industrial.

It said police in Liaoning, the northeastern border province of China, had started a probe into the firm's alleged long-term involvement in "serious economic crimes". (http://on.wsj.com/2cz8iu1)

Certain assets related to the company, its founder and top executive Ma Xiaohong, and some of her relatives and associates, have been frozen by the Chinese authorities in recent weeks, according to the government and corporate filings cited in the report.

Representatives of the U.S. Department of Justice, Chinese Government and Hongxiang Industrial were unavailable for immediate comment.

The White House said Obama and Li also discussed in New York the U.S.-China economic relationship and its importance to the global economy.

"The President encouraged China to accelerate its continuing efforts to address industrial excess capacity, foster an environment conducive to innovation, and advance an orderly transition to a market-determined exchange rate," the statement said.

It said Obama also urged Beijing to establish a level playing field for all firms to compete fairly in China and that he and Li discussed the importance of achieving progress in negotiation of a U.S.-China Bilateral Investment Treaty and of a World Trade Organization Environmental Goods Agreement.

The statement added that the two leaders discussed climate issues and pledged to continue working toward bringing the Paris agreement into force as early as possible and to reach a market-based measure to reduce international aviation emissions.