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Former Fed official Fisher: China could be the key to solving the North Korea crisis

  • China is the key to achieving a solution on the Korean Peninsula, Richard Fisher, senior advisor at Barclays, said at the Singapore Summit
  • The current administration was taking a "step in the right direction" when it came to reigning in the North, he added

Richard Fisher, the former Federal Reserve official and current top advisor at Barclays, said Friday he is looking for China to play a pivotal role in resolving problems on the Korean Peninsula.

Following North Korea's latest missile launch earlier in the day, Fisher said the current U.S. administration's strategy in getting countries to agree on sanctions against North Korea was a "step in the right direction." He acknowledged, however, that recent steps taken by the international community were likely less severe than the White House would've like.

President Donald Trump has used tough language against the North in recent months, most colorfully warning the hermit state it would be "met with fire and fury" if it continued to threaten the U.S. North Korea responded to those remarks by announcing that it was considering a strike on Guam, a U.S. territory. It ultimately stood down on the threat.

One key variable for the fate of the region's geopolitical crisis is the role China plays, said Fisher, a former Dallas Fed president.

"China's the key to success, everybody knows this," Fisher, who also served as deputy U.S. Trade Representative between 1997 and 2001, told CNBC on the sidelines of the Singapore Summit.

Two Chinese men stand near a Chinese flag as they look out towards North Korea while visiting the Broken Bridge, in the Chinese border city of Dandong, in China's northeast Liaoning province on September 5, 2017.
Greg Baker | AFP | Getty Images
Two Chinese men stand near a Chinese flag as they look out towards North Korea while visiting the Broken Bridge, in the Chinese border city of Dandong, in China's northeast Liaoning province on September 5, 2017.

China is North Korea's main import source for oil and is its most important ally. While Beijing urged North Korea to halt its nuclear development plans following the latter's sixth nuclear test on Sept. 3, the Trump administration says it believes the world's second-largest economy can do more. U.S. Secretary of State Rex Tillerson this week asked China to use its economic leverage to put more pressure on the North.

"To be fair to China, they do not want U.S. forces on their southern border, so the solution's much more complicated than, say, reunifying Germany," Fisher said.

Fisher said he believed a solution that would satisfy both China and the U.S. was one that would ensure "that space of North Korea" would be preserved while simultaneously taking North Korean leader Kim Jong Un "off the map." At the very least, Kim's nuclear power had to be taken out of the equation, Fisher added.

While negotiations would be "a very delicate process," U.S.-China relations were unlikely to unravel just because of North Korea, Fisher said.

"Our relationship is much broader than this," he added.