China is applying more economic pressure on North Korea, in the form of major Chinese banks no longer handling transactions with North Korea. Part of this has to do with the continued export of counterfeit hundred dollar bills by North Korea. China has also threatened to reduce shipments of oil and food. China is a major supplier of both to North Korea. In a rare gesture, North Korea apologized to China for conducting the nuclear test. But China wants North Korea to get its economy in order and to stop spending so much money on missiles and nukes. North Korea continues to be evasive on this issue, apparently reflecting a power struggle within North Korea. There is increasing chatter about a coup in North Korea, with a group of pro-Chinese officials taking over. China keeps sending more troops and police to the North Korean border, in anticipation of a political collapse there, and a flood of refugees headed for China.
October 22, 2006: China has enacted new laws that make it illegal to defame the state on the Internet. This makes it easier for the police to arrest any Internet user who says something that annoys a government official. China is also trying to force Internet users, especially bloggers, to use their real names.
October 15, 2006: China continues to increase restrictions on trade with North Korea. This now includes a new, barbed wire, fence along much of the border. Truck traffic is now subject to increasingly strict inspections before entering North Korea. This is meant to pressure North Korea to ease back on its missile and nuclear weapons programs, but it does not seem to be working.