Mounting evidence suggests that North Korea is evading monitoring by the international community and illegally buying components for the development of nuclear weapons and missiles from China.
The U.S. Center for Advanced Defense Studies and the Sejong Institute in a report analyzing North Korea's foreign currency trade found that the North's military equipment manufacturers have used paper companies registered in Hong Kong to buy GPS equipment, antennas and other missile components from Chinese businesses.
GPS equipment is classified as a "dual-use" product that can be altered for military usage and therefore banned for trade with North Korea.
The U.S. think tank in another report in June said a Chinese company called Dandong Dongyuan is exporting radar navigation systems and RPG-7 rocket-propelled grenades to North Korea.
The U.S. Treasury Department last month blacklisted Dandong Dongyuan for selling more than US$28 million worth of electronics equipment, mobile navigation systems, aluminum, steel, pipes and nuclear reactor parts to North Korea over the last few years.
The U.S. said in August that Chi Yupeng, the Chinese owner of a company called Dandong Zhicheng Metallic Materials, imported steel and soft coal from North Korea and supplied it with nuclear weapons and missile components in lieu of cash.
It said companies owned by Chi either directly or indirectly traded in at least $60 million worth of products with North Korea annually, while another $25 million in trade took place between the two sides using bank accounts in the U.S.
The Hwasong-12 intermediate-range ballistic missile North Korean launched last month is believed to have been developed with Chinese support.
A report by the Korea Institute for Defense Analyses last month shows heat pumps China exported to North Korea were used to make liquid-fuel boosters for missiles, while carbon fiber was used to develop the missile frames.
