What China wants from North Korea

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North Korea's leader Kim Jong Un (L) shaking hands with China's Foreign Minister Wang Yi (R) during their meeting at an undisclosed location in North Korea on May 3, 2018. Photo: AFP via KCNA

While the world waits to learn when and where United States President Donald Trump and North Korean leader Kim Jong-un will hold their historic summit, it’s still not exactly clear why Kim has agreed to negotiate.

While new United Nations imposed economic sanctions and Trump’s threatening tweets to press his “bigger button” to rain nuclear “fire and fury” on North Korea have no doubt had some impact, it’s China’s fear of instability and even war on its border that’s more likely behind Kim’s change of heart.

Indeed, on Sunday, North Korea’s official KCNA news agency quoted a North Korean foreign ministry official saying that Washington was “misleading public opinion” by claiming US pressure was responsible for Kim’s recent “denuclearization” pledge.

The official warned that US moves to “deliberately provoke” the North by moving military assets and raising human rights issues would “ruin the hardly-won atmosphere of dialogue and bring the situation back to square one” and not to miscalculate its “peace-loving intention” as weakness.

It is in China’s interest to maintain stability on its periphery; a weak North Korea or a unified Korean Peninsula is not. As one veteran Korea watcher puts it: “China doesn’t want a reunified Korea, much less a reunified Korea under a free and democratic system that’s allied with the United States. China wants neighbors that are dependent on it.”

Despite the April 27 Panmunjom declaration between South Korean President Moon Jae-in and his North Korean counterpart to pursue a “nuclear-free” Korean peninsula, it is still highly unlikely that Kim and his military establishment will denuclearize unilaterally.

There are plenty of reasons to believe negotiations with Trump will stall soon after they start. Pyongyang has long demanded the withdrawal of the 28,500 US troops stationed in South Korea, which Kim Eui-kyeom, a spokesman for president Moon, effectively said on May 2 was non-negotiable.

While the US has not maintained nuclear weapons in South Korea since the early 1990s, the US has “protected South Korea (and Japan) under a nuclear umbrella made up of several types of weapons: dual-capable fighter-bombers and strategic nuclear forces in the form of bombers and submarines,” according to specialists Hans Kristensen and Robert Norris writing last year in the Bulletin of Atomic Scientists.

Photo: KCNA via Reuters

North Korean leader Kim Jong-un in a file photo. Photo: KCNA via Reuters

That raises questions about whether Pyongyang would demand that those nuclear-capable weapons are removed to give up its nuclear deterrent to achieve a “nuclear-free” peninsula. Theoretically, America could wipe out North Korea by submarine force alone.

That strategic fact is not lost on Beijing. China is particularly opposed to the deployment of the US-supplied Terminal High Altitude Area Defense (THAAD) missile defense shield system in South Korea. Seoul and Washingtonn say THAAD, designed to shoot down short-, medium- and intermediate-range missiles in their terminal phase, is needed to defend the region against North Korea’s arsenal.

China believes its deployment last year is also aimed at their missiles and undermines its deterrent capabilities via-a-vis the US in any conflict scenario. That concern prompted Beijing last year to impose sanctions against Seoul, including against its China-based Lotte Group stores and an informal boycott on outbound Chinese tourism to South Korea.

After months of firing missiles and exchanging insults and threats with Trump, Kim showed a gentler side by allowing his nation to participate in the February 2018 Winter Olympics held in PyeongChang, where it entered the opening ceremony with the South Korean team under a common banner.

Kim appeared to soften even more, however, after a visit to Beijing at the end of March, his first foreign trip since he took power after the death of his leader father Kim Jong-il in December 2011. Until the younger Kim’s private train pulled into Beijing’s central station on March 27, many felt that he had deliberately avoided China.

That may have stemmed from Kim’s believed ordered execution of Jang Song-thaek, who was married to his aunt Kim Kyong-hui, allegedly for trying to organize a faction within the ruling elite that was opposed to his rigid political and economic system.

More executions followed in a crackdown on people who were believed to be in favor of Chinese-style economic reforms. Some of them had allegedly grown wealthy through dealing with Chinese companies.

Kim’s trip to Beijing, which analysts suspect must have come under intense Chinese pressure, was followed by a visit to Pyongyang in mid-April by Song Tao, head of the International Liaison Department of the Central Committee of the Communist Party of China (ILD/CPC).

This April 14, 2018 picture released from North Korea's official Korean Central News Agency (KCNA) on April 16, 2018 shows North Korean leader Kim Jong-Un (front C) speaking with Song Tao, head of the International Liaison Department of the Central Committee of the Communist Party of China (front R), who led the Chinese art troupe beside Kim's wife Ri Sol-Ju (front L) in Pyongyang. / AFP PHOTO / KCNA VIA KNS AND AFP PHOTO / KCNA VIA KNS / - South Korea OUT / REPUBLIC OF KOREA OUT ---EDITORS NOTE--- RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT "AFP PHOTO/KCNA VIA KNS" - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTSTHIS PICTURE WAS MADE AVAILABLE BY A THIRD PARTY. AFP CAN NOT INDEPENDENTLY VERIFY THE AUTHENTICITY, LOCATION, DATE AND CONTENT OF THIS IMAGE. THIS PHOTO IS DISTRIBUTED EXACTLY AS RECEIVED BY AFP. /

North Korean leader Kim Jong-Un (front C) with Song Tao, (front R). Photo: KCNA via KNS and AFP.

The Australian-educated Song was dispatched with a Chinese art troupe, causing many in the foreign media to deem Chinese Foreign Minister Wang Yi’s early May visit to Pyongyang as more significant.

But in China’s communist system context, the CPC is above the government and military, and Song is far more powerful than any minister who maintains “government-to-government” relations.

The ILD/CPC is in charge of “party-to-party” relations, a distinction China makes in its foreign policy which allows the ruling CPC more flexibility to act from behind-the-scenes in ways that Western countries cannot.

Song looks primarily after relations with the ruling communist party in North Korea and various actors in Myanmar — two of China’s most troublesome neighbors. The Korean Peninsula crisis was no doubt high on his meeting agenda on his recent visit to Pyongyang.

China has previously tried to encourage North Korea to liberalize its economy to stabilize its regime. In 2001, Kim Jong-un’s father, Kim Jong-il, was invited by China to visit Shanghai’s stock exchange, a high-tech park and an international convention center. The older Kim returned to Pyongyang and did allow for some markets to open, but the reforms did not go nearly as far as China presumably had hoped.

Although all trading activities had to be carried out by state-owned organizations, there were reversals when some hardliners in the North Korean leadership felt that their established system was in danger of being undermined by the opening of free markets.

There is certain validity to the view that recent events on the Korean Peninsula are not so much the dawning of a new era as history repeating itself. Observers were similarly spellbound in June 2000 when South Korean president Kim Dae-jung flew to Pyongyang to hold a summit meeting with then North Korean leader Kim Jong-il as part of his “sunshine” policy, a gambit that won him a Nobel Peace Prize.

Loudspeakers on both sides of the demilitarized zone separating the North and South fell silent, and the possibility of reunification was in the air. North and South Korean teams at the 2000 Sydney Olympics marched together under the same flag – the same one used this year at PyeongChang.

As part of the overture, a special economic zone (SEZ) was established at Kaesong in the North where South Korean companies began to invest. That provided North Korea with a new avenue to reform its decrepit centrally-planned economy.

That initiative came undone, however, in September 2002 when an opposition South Korean lawmaker alleged that at least US$400 million had been paid to Pyongyang through South Korea’s Hyundai Corporation to persuade the North Koreans to agree to the summit.

North Korea's Kaesong joint industrial complex area is seen from South Korea's Taesungdong freedom village sitting inside the Demilitarized zone dividing the two Koreas in Paju on April 24, 2018.North Korean leader Kim Jong Un and the South's President Moon Jae-in have followed paths to power as radically different as their two countries, but they will come together at a summit in the Demilitarized Zone on April 27. / AFP PHOTO / Jung Yeon-je

North Korea’s Kaesong joint industrial complex area is seen from South Korea’s Taesungdong freedom village, April 24, 2018. Photo: AFP/Jung Yeon-je

The sum, which was wired first to the Bank of China in Hong Kong and from there to an account belonging to the North Korean trading company Zokwang in the former Portuguese enclave of Macau, could have been as high as US$500 million. The scandal undermined Kim Dae-jung’s reputation for integrity and left his “sunshine” policy in tatters.

That did not deter Kim Dae-jung’s successor, Roh Moo-hyun, from traveling to the North in October 2007 for yet another summit. A joint declaration was signed calling for a peace treaty to formally end the Korean War and for increased economic cooperation. That overture, too, came to nothing.

So what, if anything, is different this time? In the South, there is more to it than just a desire for peace. In April 2013, the Kaesong Industrial Zone was closed by Pyongyang following a crisis in relations with Seoul over the North’s nuclear tests.

It was reopened in August that year but then closed again — this time by the South — in February 2016 in protest over North Korean military provocations, including the test of a hydrogen bomb in January. The zone used to employ 53,000 North Korean workers with a staff of 800 from the South.

The workers’ wages, estimated at US$90 million annually, were paid directly to the North Korean government and therefore an important source of foreign exchange for the cash-strapped regime.

In the South, the government is under pressure from the private companies that have invested in the SEZ for it to be reopened. According to the veteran Korea watcher: “Kaesong is the only place where South Korean companies are still producing cheap goods based on low wages.”

A THAAD interceptor is launched during a successful missile test. US plans to deploy the system in South Korea has sparked concerns in the North, and in China. Photo: US Department of Defense, Missile Defense Agency/Handout via Reuters/File Photo

A THAAD interceptor is launched during a successful missile test. Photo: US Department of Defense, Missile Defense Agency/Handout via Reuters/File Photo

Stronger economic links between the South and North would serve China’s strategic interest of stability on the peninsula.

At the same time, China wants to maintain and expand its influence over the North Korean regime, which recent events demonstrate that it still has. A détente between the North and South would also give China a chance to drive a wedge between Washington and Seoul.

South Korea has stated that it wants US troops to stay, but if there is a peace treaty there would no longer be any excuse to maintain them or the THAAD deployment to protect against North Korean missiles. Maintaining THAAD after a peace deal would give Beijing ammunition to call America’s bluff and claim that THAAD was part of an attempt to encircle China.

THAAD is a contentious issue in South Korea. When Moon came to power he put the deployment of four additional THAAD launchers on hold. He moved ahead with their deployment only after North Korea’s July 2017 test launch of an intercontinental ballistic missile capable of reaching mainland America.

In the long run, the broader question of why the US would have to maintain troops in South Korea would inevitably be an issue if a peace treaty was signed between the two Koreas. And if a peace treaty is not forged, somebody — most likely the US — would be blamed for intransigence.

Seen from that perspective, China and North Korea may emerge as bigger winners than the US if the upcoming talks achieve less than many now anticipate and hope.

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