China Announces Inquiry Into Company Trading With North Korea

The police in northeastern China have announced a criminal investigation into a Chinese conglomerate that does extensive trade with North Korea, which researchers in South Korea and the United States say included materials that can be used in the production of nuclear weapons.

The Public Security Department of Liaoning Province said on a government website last week that the Hongxiang conglomerate, based in Dandong, a major trading center with North Korea, was suspected of “serious economic crimes.”

“During their work, the Liaoning public security authorities discovered that for a long time the Dandong Hongxiang Industrial Development Company Ltd. and a relevant responsible individual engaged in suspected grave economic crimes during trading activities,” the department said.

The police did not specify whether the company’s prominent chairwoman, Ma Xiaohong, was under investigation, nor did it say whether the company was the object of scrutiny for its North Korean business, which makes up the bulk of its trade.

The action was compelled by two recent visits to Beijing by officials from the Justice Department to warn the Chinese of the illegal activities of the Dandong company, according to an American law enforcement official who asked not to be identified before a pending announcement of charges against the company by the United States.

The information provided to the Chinese included allegations that the company was helping North Korea’s nuclear weapons program, the official said.

The statement by Liaoning Province came just days before a report issued on Tuesday by a South Korean think tank and a Washington research group that singled out the Hongxiang group for dealing in products that can be used to make nuclear weapons. Ms. Ma has avidly supported stronger economic ties with North Korea and has called the Hongxiang group a “golden bridge” between China and the North.

One of the targets of the Chinese investigations appears to be aluminum products that Hongxiang is said to have sold to North Korea. A division of the Hongxiang conglomerate sent two shipments of aluminum oxide worth $253,219 to North Korea last September, the Asan Institute for Policy Studies in South Korea and the C4ADS research group in Washington said in their report.

According to the United States Nuclear Regulatory Commission, aluminum oxide is used to avert corrosion in gas centrifuges during uranium enrichment.

The report listed three other products — aluminum ingots, ammonium paratungstate and tungsten trioxide — that Hongxiang sold to North Korea and that the United States Commerce Department considers to have possible civilian and nuclear uses. Aluminum oxide is among a long list of items issued in 2013 by China’s Ministry of Commerce that are banned for sale to North Korea.

The unusual action by China follows congressional legislation passed this year aimed at forcing Beijing to penalize its companies that do business with North Korea. And Ms. Ma’s Hongxiang group has been an especially energetic player in such business.

“Be thankful that we were born in this great era and were born in Dandong, this beautiful city on the frontier of China and North Korea,” Ms. Ma, 44, wrote in an introduction to herself on the Hongxiang conglomerate’s website. “Be even more thankful that we have chosen this business of doing trade and serving as a shipping agent with North Korea. North Korea’s resumed resurgence and unlimited needs can make all our dreams became possible.”

According to the Hongxiang website, where Ms. Ma appears in photographs as a philanthropist with boundless enthusiasm for trade between China and North Korea, the conglomerate’s business interests include chemicals, minerals, metals and coal, the latter one of North Korea’s most valuable exports.