He is above all an insular and nationalist leader, who bridles at external interference, and espouses the principle of juche (normally translated as national ‘self-reliance’). Unlike his father, Kim Il-sung, who was schooled in north-eastern China and joined the Chinese Communist Party, Kim has no personal connection to North Korea’s more powerful neighbour. Since UN sanctions were imposed following the DPRK’s second nuclear test in May 2009, Kim has consistently sought to open a bilateral dialogue with Washington rather than fall back on Beijing’s support. He fears the implications of growing steadily more dependent on Chinese aid and assistance. Around 90 per cent of North Korea’s energy imports are reported to come from China.
The dire condition of the North Korean economy meant he had no choice but to go to Beijing in search of support. The introduction in November of a new currency, alongside measures to close private markets and ban the use of foreign exchange, led to hyperinflation, social dissent and an eventual government climb-down. Sanctions have reduced traditional sources of cash flow by cutting off income from arms sales and contraband. They may tighten again if the Cheonan incident is referred to the UN should North Korean culpability be established. A drop in international aid donations means the DPRK is likely to face severe food shortages over the coming months. This is a grim situation, even by North Korea’s standards, and not the ideal context in which to prepare for the succession of Kim’s inexperienced 27-year old son, Kim Jong-un.
The main purpose of the visit from Beijing’s perspective was to use its economic leverage to prod North Korea down the Chinese path of ‘reform and opening’. Kim was sent on inspection of tours of industrial and scientific facilities to highlight the economic achievements of post-reform China. Both sides agreed to ‘deepen trade and economic cooperation’ and Kim has said he now ‘welcomes’ Chinese enterprises into the DPRK. The area of Rajin-Sonbong in North Korea’s northeast has been earmarked as a ‘special economic zone for foreign ventures. A comprehensive aid package and investment may follow if Pyongyang demonstrates a sustained commitment to economic liberalisation.
Such hope, of course, is optimistic, at least while Kim is in power. He recognises that sustained marketisation would pose existential questions for his regime, breaking the state’s control of information and exposing the hollowness of the regime’s rhetoric to the North Korean population. Pyongyang has repeatedly embarked on economic reforms, notably in 2002, before reversing them once they are deemed to threaten the state’s central position in society. Even now private markets are only open in North Korea as a ‘subsidiary means to offer convenience in people’s lives’. The official goal remains the revival of the state distribution system when the conditions are more appropriate.
Why, then, does Beijing persist in an approach it must recognise as unlikely to be successful?
The frustrations voiced by some Chinese analysts with North Korean belligerence struggle to be translated into policy.
No matter how much North Korea’s behaviour undermines China’s security environment, Beijing remains bound by its primary interest of stability on the Korean Peninsula. It believes any collapse of authority in Pyongyang would lead to a large-scale humanitarian crisis with cross-border implications and the possible subsuming of the North into a democratic, United States-backed South Korea. In that context, economic assistance to prop up Kim’s ailing regime and efforts to promote internal reform currently remain a better option than any change in the status quo.
Tom Rafferty is a visiting research fellow at Peking University’s Center for International and Strategic Studies.
This article is part of a special feature on the aftermath of the Cheonan sinking.