China’s Currency Swap Deal
- A currency swap deal between China and South Korea has been left to expire amid the tension over Seoul hosting a US missile defense system. As we know there has been rising tensions over North Korea’s missile testing, with its most recent missile test fired over Japan and reaching an altitude of about 770km (478 miles), travelling 3,700km past the northernmost Island of Hokkaido before landing in the sea.
- World powers feel threatened following the continuous testing of missiles by the North Korea amid public outcry and warnings. As a result, the US has set up a missile defense system at South Korea’s capital. Due to this, it is believed that China may be delaying or refusing renewal of the agreement as it is currently North Korea’s largest trade partner and China provides about half of all North Korean imports and receives a quarter of its exports. Another reason for the delay though, may be the communist party congress set to begin next week.
- The currency swap agreement was to swap 360B yuan for 64T won for the purpose of boosting trade and enhancing financial stability by cutting reliance on dollars for settlement.
Recap of Tensions over North Korea’s Missile testing
Following from the above, i thought to give a history of North Korea’s missile testing activities. In 2017 so far, North Korea has engaged in numerous missile tests. This has created panic among neighboring countries and world powers as they have demonstrated that their missiles can travel long distances with the most recent test flying 3700km over Japan before landing into the sea. Countries like the United States are now being proactive (demonstrated by their setting up of a missile defense system in Seoul, South Korea) as they believe that North Korea may be gearing itself for a clash of the titans.
The history of North Korea’s missile test in 2017 is as follows:
- The first missile test occurred on April 4, 2017 when North Korea launched a medium range ballistic missile which reached the Sea of Japan. The test was symbolic as it came after a day of celebration for North Korea’s president, report says that 12 days after the successful test (April 16), North Korea launched another KN-15 medium range ballistic missile that failed shortly after being launched.
- A third test occurred again during the month of April as North Korea initiated another missile launch from Bukchang in the South Pyeongan province. This missile test failed shortly after launching.
- A ballistic missile test (Hwasong- 12) was carried out on May 14 2017 by North Korea and this reached distance covering 700km, and altitude of 2000km.
- Four anti-ship missiles were fired near port city of Wonsan on June 8, 2017.
- North Korea tested a ICBM on July 4, 2017. The missile covered 930km and reached an altitude of 2,802km with its destination point being the sea of Japan. The date for the missile launch is also the independence day of the US, so we are unsure if it was a warning strike or mere coincidence. Anyway, the strike sparked concerns in the United States, and it prompted an emergency debate of the United Nations Security Council.
- Another missile test occurred in July 2017, this time it was a ballistic missile from Chagang province, reaching an altitude of 3,000km.
- Three short range missiles were launched from Gangwon province on August 26, 2017. One of the three failed while the other two flew approximately 250km into the Sea of Japan.
- A second missile test occurred just 3 days later (August 29) as North Korea launched a Hwasong – 12 ballistic missile which passed over Hokkiado travelling 2700 kilometres (1700mi) at a maximum altitude of 550km.
- North Korea carried out yet another missile test flying over Hokkaido Japan with a Hwasong-12 missile. The missile travelled at an altitude of 770 kilometres and reached a distance of 3,700 kilometres.
- It is being reported that in about days time (October 14), North Korea may fire a batch of short range missiles.