Authors: Fan He and Xingjie Sun

Posted on: Caixin Global, April 28th, 2017




One week after U.S. President Donald Trump hosted his Chinese counterpart, Xi Jinping, at the summit at the Mar-a-Lago estate, they spoke again on the phone. Both were concerned about the crisis on the Korean Peninsula. China is increasingly expected to be the key player in disarming North Korea. In several media interviews and on Twitter, Trump repeatedly said that China holds sway in North Korea.

The question, though, is to what extent. Some believe that China could exert some, if not full, control over North Korea, while others argue that North Korea is completely out of China’s control. Both views are flawed.

The former view stresses the historical origins of the China-North Korea friendship. Both once hard-core socialists, they used to fight shoulder-to-shoulder, and the Sino-North Korean Mutual Aid and Cooperation Friendship Treaty signed in 1961 stands to this day. Plus, China accounts for 90% of North Korea’s foreign trade. A line of thought follows: China can strangle North Korea’s economy by cutting off its food and energy supply altogether. In fact, however, ever since Kim Il Sung put forward the “Juche” idea in 1955, underscoring self-reliance, the Moscow faction and Yan’an faction among high-level North Korean politicians have been purged. Kim Jong Un’s promotion of the “Mount Paektu bloodline” to legitimize his rule has further undermined the political and ideological bonds between China and North Korea. Besides, China’s economic blockade may not be as capable of stopping North Korea’s nuclear program as thought. On the contrary, it will inflict more pain on the North Korean people and even cause Kim Jong Un to strengthen his authoritarian governance domestically.

The latter view points to the fact that North Korea has conducted nuclear tests regardless of China’s opposition and stake in the Korean Peninsula. While North Korea once considered economic reform at the time of Kim Jong Il and was open to suggestions from China, the trend was reversed as Kim Jong Un came to power. Worse, he has reinforced the “military first” politics to the extent that nuclear weapons became the most important source of the legitimacy of his ruling. As a result, China’s attempt to talk North Korea out of developing nuclear weapons has been in vain. Nevertheless, if China’s advice does not count, the United States and South Korea could be no more competent. The main issue is, China could be marginalized if its influence on North Korea is minor and its willingness to intervene in the tension in the Korean Peninsula little. This would do no good in preventing a crisis and is not in China’s national interest.

The approach one country adopted to impact the other can either be the “carrot,” which represents persuasion and rewards, or the “stick,” referring to threats and punishments. Moreover, policy impacts can build up when economic, diplomatic and security issues are interwoven. Next, we will try to present a policy matrix of China’s carrot-and-stick approaches to influence North Korea in several dimensions.

When it comes to the “carrot” approach in the economic sense, China can further encourage North Korea to implement reform and open up. This proposal was hopeful when Kim Jong Il was in power. Sinuiju, the city in North Korea that faces Dandong, China, across a river, was once designed to be a “special administrative region” to experiment with a market economy and opening-up. It was perpetually unfinished. Industrial parks in Rason and Kaesong were virtually deserted as well.

For the economic “carrots” to work magic, the only option is to increase the rewards. For example, China can incorporate North Korea into the Belt and Road initiative with the condition that North Korea has to demonstrate a more consistent political commitment to attract larger-scale foreign investment. Since the old proposal to construct a Sinuiju special administrative region would cost hundreds of billions of dollars, it takes far more than that to place North Korea on the road of reform and opening-up. Otherwise, North Korea will become a funds-absorbing “black hole” that yields no returns. After all, whether the strategy can work depends on the extent to which Kim Jong-un agrees with the market economy and to which economic development can legitimize his governance. On the one hand, we notice that there are signs of a quietly softening attitude toward a market economy in North Korea. Kim Jong Un began to take charge of the Council of State after the 7th Party Congress, which was considered as an indication of potential reform by some observers. On the other hand, the “military first” policy has not been loosened, meaning the economy is not yet the first priority. All in all, the economic “carrot” policy may not work.

The economic “sticks” China can use against North Korea are imposing economic sanctions. Despite a range of U.N. and U.S. sanctions in place, North Korea seemed unthreatened. The U.S. attempted to put pressure on North Korea during the Six-Party Talks by freezing its funds in Macau, but in recent years, its reliance on foreign exchange has diminished. China’s economic sanctions can be tougher. The announcement of the Chinese Ministry of Commerce on Feb. 17 that China will no longer import coal from North Korea until the end of this year has drawn widespread attention and caused pressure. Also, the Global Times, an official newspaper affiliated with People’s Daily, released an editorial for the first time talking about cutting off the oil supply to North Korea. Nonetheless, whether it is cutting off the food provision or discontinuing oil supply, it should only be a last resort. The former can bring about a large-scale famine to which ordinary people will fall victim instead of those in power; the latter will be at the expense of oil pipelines and related facilities, making the restoration extremely difficult in the future. Meanwhile, the economic sanctions may be taking effect at such slow rates that they cannot nip North Korea’s long-range missiles in the bud.

China’s “carrot” option in terms of diplomacy and security is to guarantee absolute security for North Korea. North Korea’s adherence to nuclear weapons is out of its deep-rooted safety concern, not for the sake of attack. But the deadlock is hard to break. North Korea aims at using nuclear weapons as bargaining chips in negotiations with the United States, whereas the U.S. will not bargain with North Korea as long as it is armed with a nuclear deterrent. Now that what North Korea wants is a promise of security that the U.S. will not give, the alternative is to “activate” the treaty of alliance between China and North Korea. This will, however, exacerbate tensions in the Korean Peninsula. A more-neutral strategy is to convene China, the United States, South Korea and North Korea to sign a peace treaty. Though not in the existing options menu, the U.S. can consider recognizing North Korea’s nuclear status and managing the crisis within the framework of nuclear nonproliferation. Among the countries possessing nuclear power, Pakistan and India are sworn enemies, yet they have refrained from using it in their many military conflicts. Tense as it is in the Middle East, countries equipped with nuclear prowess are reluctant to use it. Indeed, North Korea with nukes is undoubtedly more threatening to the security of Northeast Asia than without, but all parties, particularly the U.S., should be more focused on the strategic questions: Under what circumstances would North Korea use nuclear weapons, and what would the ripple effect be if North Korea’s nuclear status is accepted? America’s worry is that a nuke-embracing North Korea can destroy its alliance network in Northeast Asia, and at the least would dissuade South Korea and Japan from believing that the U.S. will risk being attacked by North Korea to protect its allies.

The corresponding “stick” option for China is to prevent the deterioration of the situation and to counteract. The crisis in the Korean Peninsula has posed a major threat to China’s security. Fortunately, the summit meeting between China and the U.S. has defused the bomb of a possible war between the two countries and made big countries’ being manipulated by North Korea impossible, providing China with more freedom in deterring North Korea. North Korea’s nuclear issue has already become a security “loophole” in China. First, the nuclear test site is less than 100 km from the Chinese border, which itself presents a security challenge to China, not to mention earthquakes and the danger of nuclear leakage. Second, the likely influx of North Korean refugees would act as a drag on Chinese economy, and armed soldiers’ fleeing over the border into China would lead to serious security risks. From the point of view of crisis management, China would need to deploy more military forces in the northeastern border area.

Given the existing situation, conventional efforts are doomed to failure. Various attempts, such as introducing the opening-up policy and establishing special economic zones, proved futile. America’s persistent economic sanctions against North Korea has produced unsatisfactory effects, and its endeavor to sign a peace treaty with North Korea has no result due to lack of consensus. The United States regarded its past policy toward North Korea as “strategic tolerance” and now is intolerable. On the Chinese side, the Six-Party Talks it used to advocate came to nothing. In a word, a return to the past is no way out.

Unfortunately, the different kinds of policy options we have mentioned in this article cannot fundamentally solve North Korea’s nuclear issue. This is because disagreement still lingers between stakeholders. The primary goal of the U.S. is to deprive North Korea of nuclear weapons, whereas for China, South Korea and Japan, it is to avoid war. As priorities vary, judgments on corresponding policies vary too. In order to address the North Korean nuclear issue, all parties should break away from old conventions and put forward countermeasures that were once deemed “unthinkable.” For the United States, it should seriously assess the extent to which it could accept North Korea’s temporary nuclear status. For China, its concern should be whether in the long run it should facilitate a unified, nuclear-free Korea that is on good terms with America and China and is free of U.S. troops. North Korea is the fossil of the Cold War and a complete stranger to the market economy. It has exhausted the strategic resources and patience of other countries. The moment has come to change with resolution.


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