07.04.2014 Author: Konstantin Asmolov

China and contradictions on the Korean Peninsula

098KIn order to forecast the development of the situation on the Korean Peninsula and China’s policy in the region, we will look at the basic contradictions between China, North Korea and the Republic of Korea.

We will first select the fundamental issues between China and North Korea.

It may be noted that while in 2010-2011, the conflicts of interest between China and North Korea were resolved privately, without the airing of dirty linen in public, but recently, they are speaking openly about the existence of such problems.

First, it is the desire of North Korea not to become a vassal and have room for maneuver. This is important both in terms of political and ideological reasons – the ideology of the country is built on the idea of ​​independence and autonomy. In Soviet times, Pyongyang quite skillfully maneuvered between the USSR and China, and today it would try to balance between China and the U.S.A., playing on the contradictions between the two superpowers, if only American policy would be cooperative. Of course, Beijing is trying to shorten the leash, trying to get the North to take into account the problems and wishes of the “older brother”, at least not taking irresponsible, from the Chinese point of view, actions. It is also known that the attitude of the Chinese in the north is not particularly friendly (especially in the border regions) and North Korean intelligence agencies have long been focused on working against possible Chinese agents.

As the Extraordinary Ambassador and Plenipotentiary of the Russian Federation in North Korea in 2006-2012, V.E. Sukhinin, said: “The degree of China’s influence on North Korea should not be exaggerated, as it is an independent state, and it is doubtful if it follows all Beijing’s advice and suggestions… Yes, China carried out, more than any other country, a great volume of trade with North Korea, but that does not mean that the North Koreans are doing everything that the Chinese want.”

Deputy Director of the Institute of Far Eastern Studies of RussianAcademyofScience, Sergey Luzyanin also believes that, despite the long-standing fraternal relations, North Korea conducts its own policy, especially not listening to its Chinese comrades’ advice and is not in a hurry to apply the Chinese experience. At the same time, Pyongyang demands the expansion of credit, food, energy and other assistance from Beijing.

Second, it is the nuclear issue of the Korean Peninsula. It is necessary to recall that each regional aggravation, involving North Korea, gives birth to such statements in the media as “North Korea threatens the world”, and this is used by the U.S. and its allies to strengthen their military and political positions in the North Eastern Alliance, aimed primarily at containing China.

From a certain point of view, the development of the conflict on the Korean peninsula is a complex blow to the Chinese desire for hegemony. It is forcing China to spoil its image, because a conflict has appeared, which it failed to quiet down. Therefore, China is interested in restoring its positions, especially within the framework of conflicts related to the Senkaku Islands and the disputed territories in the South China Sea.

Third, these are economic interest conflicts, related to possible signs of an administrative crisis in North Korea. Since it is unclear how much the young leader is in control of everything (is he as tough as his father was), there is a feeling of a weakening of local control and the further development of a “parallel economy”. Some officials at the periphery are trying to start “solving problems” as concerns the Chinese side. The greatest scandal occurred in August 2012, the Xiyang Group, a Chinese mining company, openly accused the North Korea government of an illegal confiscation of its business. According to representatives of the company, they invested about 37 million dollars into a joint plant for the extraction and processing of iron. However later, they had to leave because the North Koreans forced the Chinese out by, contrary to the agreements (originally the contract provided constant conditions for 30 years), dramatically increasing the types of payments: payment for labor, land lease, electricity, etc. The Chinese refused to pay the new prices and the North Korean side, first shut off the water and electricity supply to the Chinese, and then deported all the Chinese staff. As a result, the joint venture, which became operational in April 2011, stopped working.

Losses, estimated by the company, are more than $55 million. The North Korea authorities, in their turn, accuse the company itself. In a statement released by Korean Central News Agency channels, it is noted that: “The Company completed only half of their promises in terms of investments, although four years have passed from the time of signing of the agreement.”

Another well-known incident involved the capture of three Chinese fishing vessels on May 8, 2013. According to the Chinese ship owners, the detention occurred on May 8 in Chinese territorial waters of the Yellow Sea, after which the vessels were escorted into North Korean waters. North Korea demanded a ransom (190,500 dollars, and later 428,500 dollars) for setting the Chinese people free, threatening to kill the hostages and sell the ships at an auction.

It is not specified who the pirates were, since, on one hand, they were dressed in military uniforms and were armed, and on the other hand, in addition to the North Koreans, there were Chinese citizens. However, Beijing worked closely with North Korean officials in solving this problem, demanding the Koreans “ensure the safety and legitimate interests of Chinese ships crews.” As a result, all the ships and their crews were released.

It is worth noting that, according to Huanqiu Shibao publication, such cases of seizing of Chinese ships in this area are quite frequent. According to the owner of one of the captured ships, Tsayhuey Sun, the pirates attacked seven vessels; four of them were released after paying a ransom, in the period from May 8 to 10, 2013. According to the owners, these pirates often have quite strong ties with the North Korea Navy.

Thus, we move on to the next issue – how the Korean criminal groups in China are related to official agencies of North Korea. Increase of violent crimes related to the North Korean migration has long been noted in the border areas of China and North Korea. It is a known fact that North Korean frontier guards would often shoot, to cover groups of smugglers, at border guards of the Ministry of Public Security of China in 2010. In 2006, Western media underlined a number of facts of North Korean soldiers’ participation in armed robberies on Chinese territory.

In China, there are 90–110 thousand North Korean citizens. Most of them live there illegally. This fact forms a fertile ground for the development in China of various illegal activities, including organized prostitution and slave trade. Chinese online media point out these types of crimes and the low cost of North Korean human goods. We should also mention the so-called “brokers” businesses, dealing with border crossings of defectors from North Korea into the Republic of Korea and the trafficking of Chinese Koreans, which are passed off as refugees.

On a separate issue, some note the “crisis associated with the repression of Jang Sung-taek”. This is explained by the fact that among the charges against Jang are the sale to “one country” of precious natural resources, primarily coal, at bargain prices and the transfer to foreigners of the long-term lease of the Rajin Economic and Trade Zone. China buys 80–90% of minerals and almost 100% of the coal from North Korea, while China and Russia were the only countries that rented areas in the Rajin Economic and Trade Zone. This is an open secret that under that “one country”, they meant China. Besides this, the China’s monopoly status allowed it to dictate to its North Korean partners the pricing policy.

However, Jang’s execution, in China (where the executions of corrupt officials is quite usual) is regarded as an internal affair of the country. China was rather interested hoe Jang’s execution, as someone who largely controlled trade with China, would influence the revision of the already signed agreements, similar to what happened in the Xiyang Group story.

It is worth drawing the attention to the fact that in accusing Jang, North Korean authorities did not put an equal sign between his fraction and the course on reforms. It was said that Jang presented himself as a reformist, so that after the coup, he would be recognized abroad. However, the course towards reforms continued, and this was announced to the people by Kim Jong-un in his New Year’s address to the people.

In general, analyzing the Chinese factor in Jang’s case, the author was faced with a set of rather conflicting signals about Beijing’s place in this story. On one hand, the North Korean ambassador to China remained at his post, despite the fact that in terms of formal relations he belonged to Jang’s group.

On the other hand, the author heard rumors that Beijing was unhappy with that system of corruption, created by Jang. Moreover, a significant portion of bank accounts, which are referred to as “Kim’s gold”, were actually his clique’s savings, and the Chinese did not only spread the information about his sins to the North, but did not give the possibility to Jang to withdraw the money from Chinese banks. According to media reports, the Chinese authorities did not give Jang the possibility to withdraw money, one billion dollars from Kim Jong-un’s secret accounts, from some banks in Shanghai (these funds are among the alleged “secret assets of Kim Jong-un”), and they froze these assets.

The author also came across an interesting retort of the Japanese expert Hidesi Takesada, expressed in an interview with the NHK agency: “Jang Song-taek played an important role in the sale of North Korean natural resources to China. He was engaged in trade on the basis of personal judgment, guided by archaic views. Therefore, Jang Song-taek’s removal may bring foreign policy and North Korea trade closer to global standards.”

In this context, it is interesting the information that Jang Song-taek was dismissed because he opposed the signing of an agreement on the formation of a new joint economic zone in Onsong Region of Hamgyong Province. Jang allegedly opposed the agreement, considering it premature, and it was signed the same day when his arrest was announced.

From a third side, the version that China was informed of the possible changes may be true, and the visit to China paid by the Chief of General Headquarters, Choe Ryong-hae, was a kind of presentation of the main North Korean responsible for the future of Chinese affairs. We take into account the fact that Jang’s last visit to China (August 13, 2012) was rather unsuccessful – he failed both to convince China of the necessity of the young leader’s visit, and to receive additional economic aid and a new preferential loan of several billion dollars.

It is necessary to note that there are also many problems in the South Korean-Chinese relations. Including those that, with some skillful manipulation, could be inflated into a serious conflict – such as the dispute over Dokdo Islands. Here, it is worth pointing out the discussion about Koguryo, part of the ancient Korean state, much of which is now situated on the territory of China.

These are some Korean nationalists’ attempts to open an “Our Manchuria” topic, mapping of the illegally seized land by Korea’s neighbors or “fighting with distortions of history”. Thus, the Chinese government’s information stating that the total length of the Great Wall was twice longer than the previously known data, led a rebuke on the grounds that the Chinese provinces of Jilin and Heilongjiang were territories of the ancient Korean states of Goguryeo and Balhae. According to the Republic of Korea, this means that the Chinese government decided to include in the section of the Great Wall of China fragments of old ramparts of the mentioned regions that historically belonged to Korea.

Here should be mentioned the recently controversial topic of the Iodo (Socotra) underwater rock, which Korea actually turned into an artificial island, later declaring its sovereignty over it. This was made actually in violation of maritime law, and the ban on the creation of artificial islands. Moreover, according to the Chinese Ministry of Foreign Affairs, South Korea’s desire to extend its AAW identification zone “has nothing to do with jurisdiction over the sea and airspace” as long as it complies with international law and practice.

This struggle for the diaspora, as the Chinese government is actively promoting patriotism, may be summed by the relative slogan – “No matter who you are by nationality. The main thing is that you are a citizen of China”, while Korea has an active policy aimed at awakening the national consciousness of the Korean diaspora under the slogan: – “No matter what country you live in. The main thing is you are Korean”.

Konstantin Asmolov, Ph.D., Senior Fellow at the Center for Korean Studies of the Institute for Far Eastern Studies, Russian Academy of Science, exclusively for the online magazine  “New Eastern Outlook”.

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