The U.S. and South Korea should be cautious when it comes to China's criminal investigation into the Liaoning-based Chinese conglomerate that does extensive trade with North Korea. Neither country should stir up the situation before a result comes out, said an expert on Korean Peninsula issues in an interview with the Global Times.

China's Foreign Ministry also reiterated its determination to move forward with the denuclearization of the Korean Peninsula. At a press conference on Sept. 20, Lu Kang, spokesperson of the ministry, stated that China has been earnestly implementing the UN Security Council Resolution 2270, honoring its due international obligations on export control.

"In respect of customs, China has cut off almost all routes for trade in relation to the nuclear and military industry of North Korea," said Lyu Chao, who specializes in research on the Korean Peninsula at the Liaoning Academy of Social Sciences.

On Sept. 15, the Public Security Department of Liaoning province said on their official Weibo account that they were investigating Liaoning Hongxiang Industrial, based in Dandong, a major trading center with North Korea. The post stated that the firm had been involved in long-term "serious economic crimes," and that suspects were so far cooperating.

Just after the Liaoning police announced their investigation of the firm, Washington-based Center for Advanced Defense Studies (C4ADS) and Seoul-based Asan Institute for Policy Studies released a joint report titled “In China's shadow: Evolution of North Korean Overseas Networks.” The report singled out the firm for dealing in products that can be used to make nuclear weapons, the Wall Street Journal reported.

U.S. President Barack Obama and Chinese Premier Li Keqiang agreed on Sept. 19 to step up cooperation after North Korea's fifth nuclear test, the White House said. The two countries are targeting Liaoning Hongxiang Industrial, as the Obama administration believes the company may be playing a role in the development of North Korea's nuclear program, the Wall Street Journal reported.

In recent weeks, Chinese authorities have frozen certain assets held by the company, its founder and top executive, Ma Xiaohong, as well as some of her relatives and associates, according to government and corporate filings. Police did not specify whether Ma was formally under investigation, nor did they say whether the company was the object of scrutiny because of its North Korean business, which makes up the bulk of its trade.

A division of the Hongxiang conglomerate sent two shipments of aluminum oxide worth $253,219 to North Korea last September, according to the U.S.-South Korea joint report. As stated by the United States Nuclear Regulatory Commission, aluminum oxide can be used to avert corrosion in gas centrifuges during uranium enrichment.