By Ben Blanchard and Philip Wen
BEIJING (Reuters) - With the suspension of all North Korean coal imports, China has wielded a big stick against its reclusive neighbor, but there is no sign it will cut off all critical links and Beijing is still promoting talks to solve the dispute over Pyongyang's program to develop nuclear weapons.
China has been getting increasingly fed up with what it sees as North Korean leader Kim Jong Un's recalcitrance and unwillingness to show any sign of wanting to seek a peaceful resolution to the nuclear weapons issue, according to Chinese experts on North Korea. It has also come under increasing pressure from the United States to get tough with Pyongyang.
The Global Times, a widely-read Chinese state-run tabloid, said on Monday that the coal decision showed China's determination to work with the international community to stop North Korea's nuclear schemes but did not mean China's policy toward its neighbor had or would fundamentally change.
"Despite participating in UN sanctions, Chinese society's friendship to the North remains unchanged. Chinese sanctions only target at its nuclear weapon program, and we are firmly opposed to Seoul's political fantasy against Pyongyang," it said in an editorial.
The fantasy reference related to speculation in the South Korean media that China may have halted the coal shipments to punish North Korea for the killing of leader Kim Jong Un's half brother Kim Jong Nam last week in Malaysia. South Korean officials say they believe that Kim Jong Nam was assassinated by North Korean agents.
The economic impact of suspending coal imports would be severe and may force Pyongyang to the negotiating table, some of the Chinese experts said. China imported about $1.89 billion of coal from North Korea last year, a significant proportion of the $2.5 billion in total Chinese imports from North Korea that year.
"This is a very severe measure that has broken with previous convention, it shows just how much China has been antagonized by [Pyongyang's] recent missile tests," said Jin Qiangyi, director of the Centre for North and South Korea Studies at Yanbian University, who specializes in China's relationship with North Korea.
"The situation is such that doing nothing will only see risks exacerbate; doing this still comes with some risk but it may force North Korea to negotiate."
FEARS OF COLLAPSE
Still, Beijing will want to tread carefully to avoid upsetting Kim too much, according to a source with ties to China's military.
One concern is that Kim could even point his missiles in China's direction, the source said.
"Kim is like a dog who needs to be both loved and beaten to keep him in line," said the source, who has also visited North Korea. "But beat him too hard and he'll bite back. That's the quandary."
Among the Chinese government's other fears is the possibility of a sudden regime collapse in North Korea leading to chaos and the potential for hundreds of thousands of North Korean refugees to head across the Chinese border, diplomatic sources have said.
In that scenario, Beijing would also be concerned that U.S. and South Korean armed forces would move into North Korea and soon be on the Chinese border.
If China really wanted to throttle Pyongyang, it could simply stop all trade with the country, including oil and food, ban flights to and from North Korea, and end all financial transactions with the country.
At the same time as unveiling the coal measures, China has been promoting diplomatic efforts.
Chinese Foreign Minister Wang Yi, speaking at a high profile security summit in Munich over the weekend, said China has not given up hope for a new round of diplomacy with North Korea, even as he pledged support for UN sanctions.
Wang also took aim at the repeated calls from Washington for Beijing to step up the pressure on Pyongyang - and said the United States had its responsibilities too.
"The United States and North Korea are the parties most directly involved, and they must as soon as possible be politically decisive," Wang said, adding China would continue to play a mediating role.
Last month, before being sworn into office, U.S. President Donald Trump criticized China for benefiting from economic ties with the U.S. but not doing enough to curb North Korea's erratic behavior.
While China is frequently called North Korea's only serious remaining ally, relations have soured steadily due to Pyongyang's nuclear and missile tests and Chinese President Xi Jinping has yet to meet with his North Korean counterpart.
The killing of Kim Jong Nam has only underlined the unpredictability of the regime.
Malaysian police have detained four suspects - a Vietnamese woman, an Indonesian woman, a Malaysian man, and North Korean man - and are on the hunt for four other North Koreans who fled the country on the day of the attack.
Unlike the U.S. and South Korea, China has not pointed the finger at the North Korean leader for the killing.
Chinese experts on North Korea said the decision to suspend coal imports would only have been taken after careful deliberation, and was unlikely to be a knee-jerk reaction to Kim Jong Nam's assassination.
There is residual support for Pyongyang in the Chinese establishment, especially in the military who fought with North Korea in the 1950-53 Korean War, and some of whose officers blame the U.S. and South Korea for the problems on the Korean peninsula, said a Western diplomat, who has discussed North Korea with Chinese officials. He was speaking before the coal ban announcement.
"There is a feeling that a lot of the bad news that is blamed on North Korea is really being cooked up in Seoul and Washington," said the diplomat, speaking on condition of anonymity.
(Editing by Martin Howell)