The Bank of China’s recent cutoff of ties with North Korea’s main foreign exchange bank appears to be the latest sign of Beijing’s patience wearing thin on the back of a string of nuclear threats and provocations by its rebellious ally.

The U.S. and South Korea welcomed China’s first publicly pronounced action which they expect to have considerable impact on curbing the North’s military ambition.

The state-run institution, one of the biggest in China, said Tuesday it has suspended transactions with the Foreign Trade Bank accused by the U.S. in March of funding Pyongyang’s missile and nuclear programs.

News reports suggested that two other major financial agencies ― the China Construction Bank and the Agricultural Bank of China ― have also halted business with the FTB and other North Korean banks. Seoul officials declined to confirm.

While a sweeping change is not yet in store in Beijing’s approach to Pyongyang, the recent moves reflect new Chinese President Xi Jinping’s growing frustration with North Korean leader, Kim Jong-un.

They may also be what the U.S. can claim credit for. David Cohen, U.S. undersecretary of the Treasury for Terrorism and Financial Intelligence, requested other countries to follow suit in sanctioning the FTB during his trips in March to South Korea, China and Japan.

The U.S. Treasury Department called the bank a “key financial node in North Korea’s weapons of mass destruction apparatus.” The bank had channeled millions of dollars into the Korean Mining Development Trading Corp., a prime arms dealer whose chief representatives were newly blacklisted by the U.N. earlier that month, the Treasury said.

“This is a dialogue we’ve had very intensively with China and we welcome steps that increase the sanctions,” U.S. State Department spokesperson Patrick Ventrell said in a news briefing on Wednesday.

“You know they have a special relationship and a special influence, and we continue to urge them to use that influence to help get North Korea to make better decisions.”

Seoul’s Foreign Ministry noted that China’s pledge to “responsibly enforce sanctions” when signing onto the U.N. Security Council’s fourth set of sanctions over North Korea’s atomic test.

“Although the FTB was of course not included in that sanctions resolution, I think of (China’s cutoff) as part of the policy that’s already made public by the Chinese government,” spokesman Cho Tai-young told reporters later in the day.

China’s role is deemed essential in effectively blocking North Korea’s access to key overseas financial markets. As Pyongyang’s economic lifeline, it provides food and fuel handouts, as well as a precious source of hard currency.

The two countries’ trade has sharply expanded in recent years in line with Pyongyang’s growing isolation, and is expected to increase further now with the Gaeseong industrial complex in dormancy.

Two-way volume jumped 5.4 percent on-year to $5.93 billion in 2012, according to the Korea International Trade Association in Seoul.

Beijing, however, has in recent months exhibited willingness to work more with Washington on the North Korean issue, though they remain at odds over many other regional and global brainteasers.

China in March joined the U.S. in imposing the U.N.’s toughest sanctions on the communist country to punish its third nuclear test a month before, riling Pyongyang’s budding leadership. Chinese regulators then reportedly warned four North Korean banks against any illicit dealings.

During an international forum last month, Xi took a jab at Pyongyang’s ruler without mentioning any country by name.

“No one should be allowed to throw a region and even the whole world into chaos for selfish gains,” the Chinese president said in a speech at the Boao forum on the resort island of Hainan.

One week later in Beijing, U.S. Secretary of State John Kerry said his country would curb its missile defenses in Asia if the North drops its nuclear programs. The concession was apparently intended to elicit China’s support in reining in its increasingly recalcitrant ally while addressing Beijing’s concerns over the rising U.S. military presence in the region.

But few officials and experts expect Beijing to abandon its bellicose neighbor anytime soon despite the growing signs of China’s displeasure and perceived ice on the bilateral ties.

Though China is trying to play its part as a responsible member of the international community, any fundamental shift is unlikely in its North Korea policy in absence of big incidents like a fourth nuclear test, given mounting domestic challenges including political reform, a cooling economy and growing middle-class demand, they said.

“Having seen all provocative behavior from North Korea, one can reasonably expect such a change in tone from the Chinese part, thinking enough is enough. But how far they’re willing to go is a different matter,” a senior Foreign Ministry official here told The Korea Herald.

Others have expressed skepticism about the efficacy of financial sanctions, saying a big slice of North Korea’s external trade takes place outside the established financial system.

Many cash-deficient North Korean firms and merchants are reportedly using gold, silver, jewelry or antiques as a payment method, while bartering remains a crucial tool for overseas and domestic trade.

“Washington understandably wants to curb Pyongyang’s money laundering and other illicit activities, but it seems perverse to impede its legitimate trade when North Koreans are relying more on markets than the state to meet their everyday needs,” said Leon Sigal, director of the Northeast Asia Cooperative Security Project at the Social Science Research Council in the U.S., on the “38 North” blog run by the U.S.-Korea Institute at Johns Hopkins University.

“The flow of goods into North Korea’s markets from outside, especially from China, facilitates that transformation. Isolation, by contrast, would only tighten the regime’s grip.”

By Shin Hyon-hee (heeshin@heraldcorp.com)