North Korean leader Kim Jong Un's proposal for direct talks with Seoul in his New Year's Day address was good news. As was South Korean President Moon Jae-in's indication that he agreed to them. South Korean Defense Minister Cho Myoung Gyon said in a press conference that talks could take place as early as next week at Panmunjom in the demilitarized zone that separates the two states. He said North Korea's participation in the Winter Olympics in February might be discussed, as well as "other issues of mutual interest for the improvement of inter-Korean ties."

Beijing was pleased about this. Washington seemed less pleased. US President Donald Trump's conceded on Twitter was that talks were "a good thing," but claimed Washington's hardline stance toward Pyongyang was the only reason they were happening.

The State Department was not sure that Kim's proposal was serious, while the US envoy to the United Nations, Nikki Haley, said that Washington would not "take any of the talks seriously if they don't do something to ban all nuclear weapons in North Korea."

China's iron will

It's the same old story: President Moon will either have problems with Beijing or with Washington because of North Korea. Last year, Seoul was in Beijing's stranglehold for months after doing Washington a favor. China felt threatened by the US army's development of the THAAD anti-missile system, which is supposed to better protect South Korea in the event of a North Korean attack. It was claimed that the radar system could also be used to spy on China. The conflict between the two states showed how forceful China can be when it wants to impose its will — not with bombers and aircraft carriers, however, but with the powerful weapon of economic pressure.

In protest, Beijing banned selling organized tours to South Korea. Charter flights were canceled and even South Korean cosmetics, which are popular in China, were seized at customs, despite the free trade agreement.

The number of Chinese tourists in South Korea decreased by 61 percent to 2 million between March and August 2017. The Lotte supermarket chain came under particular pressure after daring to make available land that is part of a golf course to THAAD. Lotte ventured onto the Chinese market early on and had over 100 branches by the beginning of 2017 in China. But 80 percent of them had to close overnight after pressure from the Chinese government. As is often the case, the official justification was fire safety.

Oil embargo problems

The situation calmed down after South Korea's new president, Moon Jae-in, promised Beijing not to install any more missile defense systems. At a meeting between Chinese President Xi Jinping and his South Korean counterpart before Christmas, the two sides agreed to normalize relations and pave "a better way based on mutual respect and trust." The two also agreed to establish a hotline so that nothing went wrong in future.

However, 2018 began with a new episode in this difficult triangular relationship. Moon cannot afford to offend the US, which protects South Korea; nor can he jilt China. The recent oil embargo imposed by the US and the UN against North Korea shows how tricky the situation is. It recently came to light that South Korea's coast guard had arrested a ship registered in Hong Kong after it made a 600-ton delivery of mineral oil products to North Korea. Shortly before, Trump had accused Beijing of not keeping to the sanctions that the US and China had agreed upon together and tweeted that China had been caught "red handed," referring to satellite images showing the oil being unloaded in the high seas.

North Korea's clever embargo management

According to a report in the South Korean newspaper Chosun Ilbo, there have been around 30 such violations since October. The Chinese government rejects these allegations. It insists that China has not officially exported any oil products such as petrol or diesel to North Korea since November. Hong Kong on the other hand is a special administrative zone. "This is a typical case of North Korea circumventing the UN Security Council's sanctions by using its illegal networks," a spokesperson for the South Korean foreign ministry said. South Korea's tone was conciliatory: It admitted that there had been a delivery but Beijing didn't know anything about it. Is this even imaginable? Yes, but not very likely. One can assume that if Beijing really wants to prevent things from being delivered then they will not be delivered, not even behind its back.

On December 22, 2017, the UN Security Council tightened the sanctions against Pyongyang. The US and China agreed to ban almost 75 percent of refined oil products to North Korea.

Beijing is at least happy that representatives of the two Koreas will be meeting. Whatever President Moon Jae-in decides to do, however, he will not be able to pacify Washington and Beijing at the same time. So he would be well advised to concentrate on South Korea's interests.

Frank Sieren has lived in Beijing for over 20 years.