China's Top Diplomat Meets Trump as North Korea Worries Rise

(Bloomberg) -- China's top diplomat Yang Jiechi met U.S. President Donald Trump in the highest-level contact between the world's two biggest economies since the election as concerns over North Korea's nuclear program overshadow campaign tensions over trade.

Yang relayed greetings from President Xi Jinping in the meeting Monday with Trump, Vice President Mike Pence and senior adviser Jared Kushner at the White House, the official Xinhua News Agency reported. Yang told Trump that China and the U.S. should broaden cooperation on regional issues and respect each other's core interests, according to a Chinese foreign ministry statement.

Beijing's leaders have called for a new round of talks on North Korea as they seek to rein in Kim Jong Un and halt American plans to deploy a missile-defense system known as Thaad in South Korea, in part on concerns that it will undermine China's own security. North Korea hit out at China last week after it banned coal imports, saying it was “dancing to the tune of the U.S.”

North Korean Vice Foreign Minister Ri Kil Song arrived in Beijing on Tuesday for possible talks with Chinese officials, Japan's Kyodo News reported. It marks the first known visit to China by a high-ranking North Korean official since around June last year.

The Global Times, a Communist Party-affiliated newspaper, on Tuesday called for China to take action against South Korea's Lotte Group after it agreed to provide land for the Terminal High-Altitude Area Defense system. U.S. allies South Korea and Japan both rely on the U.S. to provide a “nuclear umbrella” to deter threats from North Korea and China.

“It is acting willfully in deploying Thaad on its soil, betraying the cooperative logic in Northeast Asia, tying itself to the U.S. chariot and turning into an arrogant pawn of Washington in the latter's military containment against China,” the editorial said of Lotte. “From any perspective, adopting counterattacks toward Seoul is a must for Beijing.”

South Korea and the U.S. will start their annual Foal Eagle military drills on Wednesday and Key Resolve exercises on March 13, Yonhap News said Tuesday. The report also said that the U.S. may deploy B-1B, B-52 bombers and F-22, F-35B stealth jet fighters. The exercises usually are met with thundering condemnation by North Korea.

McMaster, Bannon

During the White House visit, Yang separately held talks with U.S. officials including H.R. McMaster, the new national security chief, and chief strategist Steve Bannon, Xinhua reported.

After those meetings, Yang had a chance to “say hi” to the president before he left, White House spokesman Sean Spicer said at a White House briefing. “This is an opportunity to begin that conversation and talk to them on shared interest of national security,” he said.

The White House meeting follows a call between Yang and Secretary of State Rex Tillerson last week during which they discussed trade, counterterrorism and pledged to “address the threat that North Korea poses to regional stability.” Yang and Tillerson met again on Tuesday morning at the State Department.

Tensions between the U.S. and China on how to handle North Korea have escalated since Trump accused Beijing of not doing enough to curb Kim's nuclear ambitions. North Korea has accelerated its development of nuclear bombs and ballistic missiles since 2009, when it walked away from six-party talks involving China, Japan, Russia, South Korea and the U.S.

The U.S. is considering branding North Korea as state sponsor of terrorism, Yonhap reported Tuesday, citing a high-level South Korean government official. Representatives of the U.S., Japan and South Korea met in Washington to discuss the situation Monday.

Putting North Korea on the terrorism sponsor list is “mostly symbolic,” said Robert Kelly, a political science associate professor at South Korea's Pusan National University. “It might tell China that the U.S. is running out of patience, but the U.S. has signaled that before.”

China Talks

Yang's meeting with Trump signals progress in China's efforts to open lines of communications with the White House in an effort to avoid a trade war or military confrontation. Before taking office, Trump had repeatedly signaled a willingness to challenge China on issues from North Korea to its relations with Taiwan.

Earlier this month, Trump told Xi that he would respect the One-China policy, which acknowledges that China and Taiwan are part of the same country. Asked on Monday what Trump received in return, Spicer said: “The president always gets something,” without elaborating.

“Certainly it is positive for a new U.S. leader to meet with China's top diplomat,” said Graham Webster, a senior fellow at Yale Law School's China Center. “Whether any sustained communication will result is another question.”

--With assistance from Andy Sharp

To contact Bloomberg News staff for this story: David Tweed in Hong Kong at dtweed@bloomberg.net.

To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Larry Liebert

With assistance from David Tweed