Pyongyang Finds an Ally in Moscow

On Feb. 3, North Korean leader Kim Jong-un sent out Lunar New Year greeting cards to international allies. For the third year in row Russia was listed at the top of the list of friendliest countries, relegating China to second place.

Gone are the days when Beijing was by far the Democratic People’s Republic’s most reliable partner. And, as China severed ties, there is considerable evidence that China and North Korea are no longer as close as “lips and teeth.” The Chinese President Xi Jinping has yet to meet with Kim Jong-un since he assumed power five years ago.

And although China accounts for 90 percent of North Korea’s trade (the bilateral exchanges have grown by tenfold in 15 years), it is beginning to appear that even Pyongyang’s main guarantor is almost fed up with the northern regime. Since Feb. 19 Beijing has suspended all imports of coal from North Korea until the end of the year, as part of its efforts to implement United Nations sanctions to rein in the country’s nuclear program.

Previously, China made exceptions for deliveries intended for “the people’s wellbeing” and not connected to the nuclear or missile programs. Despite the tough resolution, the loophole allowed China’s coal imports from North Korea to surge to 2 million tonnes in December, exceeding the UN Security Council’s monthly limit by at least one million tonnes and nearly US$115 million.

Now, China’s new restrictions have the potential to cripple North Korea’s already moribund economy. Coal has accounted for 34-40 percent of North Korean exports in the past several years, and almost all of it was shipped to China, according to South Korean government estimates.

Even though a painful divorce is unlikely, China has done nothing to hide its annoyance over the murder of Kim Jong-un’s stepbrother in Malaysia. Also US pressure continues to grow. As North Korea’s expert Yang Xiyu said to Bloomberg, for Beijing and Pyongyang, “economic sanctions are not as important as political sanctions. The lack of leadership meetings and high-level dialogues are how China exerts political pressure.”

And although there are several reports arguing that China is continuing to import U.N.-sanctioned minerals from North Korea, undoubtedly bilateral relations are no longer business as usual.

It is in this context that, after years of relative disengagement, Moscow is emerging as a redeeming patron of the northern regime. Even though Russia can never replace China as a source of economic assistance or trade, it can mitigate somewhat Pyongyang’s sufferings. As with China, the friendly ties between Moscow and Pyongyang date back to the Korean War. At that time, the Soviet Union was North Korea’s main trading partner and sponsor.

However, in the past few years, Russia’s influence over the security situation in the Korean peninsula has remained relatively limited. Moscow has participated in the now-suspended Six-Party Talks – along with China, South Korea, Japan and the US – but hasn’t provided military equipment since 1989, when it scaled down relations with Pyongyang in favor of reconciliation with South Korea.

To date, the Russian government has officially supported sanctions trying to curb North Korea’s fast-expanding nuclear and missile programs. But judging by the recent developments, the Russian leadership has made a political decision to expand economic cooperation with North Korea and stimulate Russia’s business interests with the DPRK.

In September 2012 Moscow agreed to write off 90 percent of North Korea’s US$11 billion historic debt to Russia as a sign of closer engagement with North Korea’s new leader. The US$1 billion North Korea has to repay will be used to finance Russian investment in humanitarian and energy projects in North Korea.

“This agreement removed legal blocks hindering the financing of trade between the two countries,” according to the website 38 North Georgy Toloraya, the Director of Korean Programs at the Institute of Economy at the Russian Academy of Science. Two years later, the Russian government has set a goal of growing the volume of its trade with North Korea tenfold to US$1 billion by 2020 – the year before its share in the foreign trade of North Korea accounted for a mere 1 percent.

The most obvious result was that Russian products, including food and medicine, have started rapidly replacing Chinese goods at North Korea’s local unofficial markets since late 2014, as they are generally seen to be of better quality at cheaper prices, according to sources inside the country.

Still, infrastructure and energy are the sectors attracting the most investment. On Jan. 31, Russia’s state news agency TASS reported that Russia Railways representatives visited North Korea to discuss an expansion of the Rajin-Hasan railway, which links Russia to the Korean peninsula. More recently, the Japanese newspaper Nihon Keizai disclosed that Russia and North Korea are deepening bilateral relations with a “labor immigration agreement” aimed to boost economic development in the Russian Far East with a low-cost North Korean work force.

It’s estimated about 40,000 North Koreans now work in labor-intensive industries in the country to earn foreign currency for the Kim Jong Un regime – numbers expected to rise. Meanwhile, Siberian oil companies have sometimes sold fuel to North Korea via a supply route linking Vladivostok to Rajin, providing the North Korean regime with vital hard currency, as the DPRK has processed Siberian oil in chemical plants and resold it to Chinese consumers.

But Moscow’s interest in North Korea is not limited to expanding its economic influence. From a political perspective, it seems that recently Russian commitment in the Hermit Kingdom has alike surpassed China’s. In February 2014, during the Winter Olympics in Sochi, a delegation headed by Kim Yong-nam, the chairman of the Presidium of the Supreme People’s Assembly of North Korea, traveled to represent North Korea, while many leaders decided to snub the event to deliberately shame the Putin regime.

What’s more, though ingnored by the Chinese establishment, Kim Jong-un was invited to attend the Victory Day celebration in Red Square in May 2015, which honored the 70th anniversary of the Soviet defeat of Nazi Germany. Security concerns have induced him to decline the invitation, but future development might be around the corner.

According to Sputnik – many US experts think that Kim could decide to turn to the Russian president to arrange a meeting with Donald Trump, a diplomatic effort which, until not long ago, would have certainly fallen on the shoulders of Beijing. During his electoral campaign, the new occupant of the White House announced he would be open to talks with Kim, but over the last few months further provocations by the young leader have prompted Washington to toughen its stance.

Almost certainly North Korea will be high on the agenda when Trump and the Chinese President Xi Jinping meet at Mar-a-Lago resort in Florida this week, though chances of achieving concrete results are low.

Taking a closer look, the Russian diplomatic pressure is characterized by a certain farsightedness. As Samuel Ramani explains in The Diplomat, what Moscow really wants is to expand its role as a stakeholder in the preservation of long-term peace in the Korean peninsula. With an eye on the upcoming elections in Seoul, Russia is betting on the defeat of the right-wing Liberty Korea Party (formerly known as Saenuri) to improve relations with South Korea. The rise of left-leaning South Korean politicians and a more conciliatory line could increase Russian influence over the security situation on the Korean peninsula, as Moscow would be able to uniquely position itself as a strategic partner of both Pyongyang and Seoul.

Putin may succeed in controlling the Kim’s regime by linking a North Korean pledge of non-aggression on the Korean peninsula to the maintenance of Russia’s stiff border control policies – according to a treaty between Moscow and Pyongyang on the repatriation of criminals, Kremlin policymakers have mandated the deportation of all North Koreans who illegally enter Russian territory.

Bearing all this in mind, one may well wonder how Moscow’s economic and political rapprochement is viewed in Beijing. After years of ups and downs, now the two Eurasian giants are on the same page on many issues, from the South China Sea to Washington’s deployment of the THAAD missile defense system in South Korea. On the one hand, Russian engagement may clear the second largest economy of a heavy responsibility, as avoiding an abrupt collapse of the Northern regime is still the Chinese priority. But on the other hand, it may also hinder Beijing’s effort to bring Pyongyang back to the table.

“I doubt the Chinese are worried about Pyongyang’s ties to Russia” said Daniel Sneider, Associate Director for Research Shorenstein Asia-Pacific Research Center at Stanford University, “if anything they probably welcome the Russians taking on some of the burden of propping up the regime. The only change that could seriously weaken North Korea’s dependence on China will be the advent of a progressive government in South Korea which will reopen significant trade and investment ties with the North, potentially at least.”

(Pubblicato su Asia Sentinel)

China and South Korea: ‘Like Mouth and Tongue’

(Published on Asia Sentinel)

Beijing is losing patience with its troublesome client state North Korea, demonstrated by Xi Jinping’s visit to Seoul at the start of this month before ever stepping on North Korean soil so far in his presidency or extending an invitation to Pyongyang’s leader Kim Jong-un to visit Beijing.

In a telling exchange, Tian Guoli, chairman of the Bank of China, who was along for the trip, described China and Korea as “close neighbors like a mouth and tongue.” That is almost a blasphemous reworking of Mao Zedong’s famed words defining the partnership with the North Korean ally – as like “lips and teeth.”

That doesn’t mean Beijing is going to give up on a client state that has served as a useful buffer blocking US influence for more than five decades. During the Korean War (1950-1953), China sided with the North, losing 114,000 soldiers in action with another 70,000 dying of wounds. Some 25,000 remain missing, a total loss of more than 200,000 of China’s young men.

Nonetheless, the Chinese leader was obviously courting a potential ally and isolating the US, renewing and empowering bilateral exchanges and launching a public attack on the rebellious North. Without bothering with the traditional flattery doled out to Pyongyang by past Chinese leaders, Xi met his counterpart Park Geun-hye without ever acknowledging the North.

Moreover, it was the second meeting by Park and Xi since the Korean head of state visited China the previous summer. Kim Jong-un, who took over the country at his father's death two years ago, has yet to receive an official invitation from Beijing. a potent snub, given the longstanding relationships between the two countries.

Today Pyongyang is deeply connected to Beijing for 90 percent of its economy, but the reopening of nuclear programs and the latest North Korean missile provocations right before Xi's visit to the south definitely cooled Beijing towards its protégé. Therefore although diplomatic relations with Seoul date back only to the 1990s, the ROK and the PRC are getting closer to the eventual pursuit of a common objective: denuclearization of the Korean peninsula.

Still, if the objective is clear, agreement on the methods is not, with China impatient for a reopening of the six-party talks in limbo since 2009, while South Korea and the US demand serious signs of the north’s goodwill in dropping any atomic ambition. Around mid-June, Liu Jianchao, an aide to the Chinese Foreign Affairs Minister, pointed out that there is no military alliance between China and North Korea.

However, there is deep concern that a stricter attitude towards the fragile and impoverished Kim regime might cause it to implode, with a subsequent massive wave of refugees crossing the border into China. The Chinese dragon is committed maintaining the trading relations that keep the North afloat. Sanctions aside, Beijing has promised three high-speed railway lines connecting northeastern Chinese cities to the “last iron curtain,” with millions of dollars allocated to border-area bridges and street projects, along with the first cross-border power lines.

The state-owned Chinese press agency Xinhua commented recently on events: “The crucial point of the current situation in the Korean peninsula depends on mutual mistrust and hatred between the US and the DPRK. The counterproductive obsession of Washington for sanctions and intimidation, and the understandable feeling of insecurity in Pyongyang, as well as the pointless violations to the UN's resolutions, only managed to aggravate the hostilities.”

Washington thus seems to have been the real “stone guest” in Xi's two-day visit to Seoul as Beijing seeks to reorganize the system of alliances that the Unites States has built in the region. The circumstances look excellent, given the increased understanding with South Korea – which still hosts about 30,000 US troops.

There is also common impatience about Washington's most important Asia-Pacific ally, Japan, and its growing militarism. There is continuing anger over Japanese WWII atrocities. Added to that, Japan is revising its pacifist constitution, stirring concern in both Beijing and Seoul. Aside from that there is the rapprochement between Japan and North Korea over the ancient issue of kidnaped Japanese citizens. The Japanese government relaxed some sanctions inflicted on Pyongyang after the third nuclear test in exchange for a re-examination of the case.

Luckily for Beijing, relations between Seoul and Tokyo continue rocky, sometimes taking unforeseen turns as in 2010, when 37 members of the South Korean parliament created a forum to promote territorial claims on the Japanese island of Tsushima (Daema-do in Korean). Seoul also has issues with Tokyo over the Dokdo/Takeshima islands, militarily occupied by Seoul in 1952. Japan claims them as part of the district of Oki, belonging to the town of Okinoshima.

Still, even after decades of American reminders, Seoul's defense expenses are still only 2.5-3 percent of GDP, basically making South Korea a “vassal depending upon the US” according to author Edward Luttwak. The great hostility of the South Korean left wing towards an increased military budget rules out any short-run reinvigoration of the army.

This doesn't mean relations between Beijing and Seoul are obstacle- free. Although there are no particularly urgent loose ends, the proximity of South Korea to the troubled waters of the South China Sea could easily lead to incidents. In 2011 aSouth Korean Coast Guardsman was killed and another seriously injured in a fight with Chinese fishermen over illegal activities in South Korean waters.

More recently, China announced without previous notice an Air Defense Identification Zone that overlaps ones from Seoul and Tokyo, triggering irritation from South Korea, which promptly expanded its own ADIZ to reach the disputed waters around the submerged rock known as Ieodo in Korean and Suyan in Mandarin. The timing was crucial since Beijing’s the unilateral move came just months after the first meeting between Xi and Park, greeted by experts as a “significant step forward in bilateral relations.”

Even if the Japanese historical revisionism ended up bringing South Korea and China closer, some schoolbooks still upset relations. These are frictions dating back to the beginning of the last century when China claimed some Korean dynasties were mere offshoots of their own Chinese ones.

Recently Beijing expressed its displeasure at Washington's proposal to provide South Korea with a new advanced missilistic defense system, officially conceived to contrast possible attacks from the North, but by implication meant to respond to China’s growing military aggressiveness. Seoul announced it would decide once the official proposal has been received from the US.

Even against these disagreements, the popular perception is that bilateral relations are progressing well. According to a survey published last week by Korea’s Joongang Daily, only 34.89 percent of South Korean adults believe the People's Republic of China would take North Korea’s side if a second Korean War broke out. In 2012, during Lee Myung-bak’s administration, 75.9 percent of Koreans surveyed believed China would back Pyongyang.

As in every partnership, what keeps parts together is business. In a July 4 speech at the Seoul National University, Xi invited the ROK to “forge together a new community of shared interests.” Bilateral exchanges reached US$270 billion last year, more than the combined South Korea total with the US and Japan.

The ROK is thus growing more dependent on Beijing, its first commercial partner for human resources and exports. Samsung's recent decision to invest US$7 billion to build a research center in Xi'an signifies South Korea's interest in China’s growing middle class, deeply interested in quality brands.

Jin Bosong, researcher of the Ministry of Economy, pointed at the potential of a “marriage” between South Korean electronics and Chinese e-commerce and e-business, of which Alibaba and Baidu are by now world leaders. Xi travelled with Alibaba’s Jack Ma and Baidu’s Li Yanhong. He was also accompanied by the presidents of China Telecom, China Unicom and the Bank of China, in what was defined as the most impressive business forum ever held between the two Asian nations, with 500 officials and representatives of the main societies from both countries.

Of 12 cooperative agreements, the most valuable was direct trading between the two local currencies, a great step forward towards internationalization of the yuan, with the promise of closing of negotiations for a free trade agreement, a first step towards an FTA expanded with Japan’s participation.