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Area (sq.km)
120,540

Population

22,224,195 (July 2002 est.)

Capital
Pyongyang

Currency
North Korean won (KPW)

Leader
Kim Jong-il


Update No: 033 - (30/01/06)

Under China's wing?
The most significant event regarding North Korea in the first month of 2006 was another trip to China by Kim Jong-il: his fourth since 2000. These follow a consistent, if somewhat eccentric pattern in two respects. Averse to aircraft, the dear leader takes his own personal armoured train; and the "unofficial" visit is never announced until he is back in Pyongyang.

Slow train to China
Such whims hardly help portray the DPRK as a normal 21st century country. They also rub off on his hosts. In a more outspoken Russia, during a brief phase from 2000-02 when Kim and Putin met annually - it did not last - there were complaints that in 2001, when Kim's train rolled right across Siberia to Moscow, it played havoc with local railway timetables.

No such complaints were heard out loud in China. But trains, 30-car motorcades, and hotels suddenly cleared of all guests are hard to hide - especially in Guangdong province close to Hong Kong. So journalists played spot the leader, while foreign ministry spokespersons in Beijing fended off the questions - for over a week, until January 18 when it was all over.

That China remains happy to humour its awkward neighbour is significant, for right now it has double reason to be cross. First, Kim is again stalling on returning to six-party nuclear talks (both Koreas, China, the US, Japan and Russia). His latest excuse is US sanctions and charges of financial crimes, including money laundering and counterfeiting. Second, China - specifically Macau - is one alleged centre of such shady activities, embarrassingly.

Red carpet welcome
Despite this, President Hu Jintao rolled out the red carpet for his guest: personally hosting a banquet, and ensuring all nine members of the Communist Party of China (CPC) Politiburo standing committee were involved. This included guiding Kim in Hubei province in central China, where he visited Wuhan city and the giant Three Gorges dam near Yichang; and on to the south, his main focus this time. In Guangdong, China's richest province, Kim toured the capital Guangzhou and the Shenzhen and Zhuhai special economic zones (SEZs).

As this suggests, matters economic were a main theme of this trip. In this it resembled his earlier visit to Shanghai in 2001, also in January. (Kim commented on the warmth, climatic as well as political; no doubt escaping the grim Korean winter was a pleasure in itself.)

In Shanghai his itinerary included several high-tech plants - at least one a US joint venture with General Motors (GM) - and even the stock exchange. This time too, most of the 17 sites Kim was reported as visiting were high-tech enterprises; making inter alia smart cards, optical fibre cable, lasers and financial software. In Beijing he praised China's "astonishing changes" and specifically its "shining achievements in high-tech." More intriguingly, he endorsed Jiang Zemin's "three represents" theory: contentious within China as legitimating the CPC's recent outreach to capitalists as embodying the most advanced productive forces.

Is Kim a closet reformer?
What to make of all this? Despite disappointment, hope springs eternal that the dear leader may yet be a closet Deng Xiaoping and aspire to serious reform. If so, it was not ever thus. Back in 1983, Deng was a younger Kim's guide, then as crown prince, on his first public visit to China; important as the first foreign endorsement of his father Kim Il-sung's highly heretical hereditary succession plan. While no doubt grateful politically, the DPRK dauphin was reportedly aghast at China's reforms at that stage. In a knee-jerk reaction of orthodoxy, albeit without naming names, Pyongyang fulminated at revisionist backsliding; also aimed at Gorbachev's perestroika in the then USSR. In the early 1990s, both were excoriated for the ultimate betrayal of recognizing South Korea. Moscow bore the brunt, but with China too exchanges of top-level visits ceased for a decade.

Times change, but on reform Kim remains hard to pin down. His Shanghai trip followed what by DPRK standards was a radical outburst. Kim declared that "things are not what they used to be in the 1960s. So no one should follow the way people used to do things in the past." Yet whereas Deng Xiaoping's "To get rich is glorious" ushered in a consistent adjustment of ideology to a changing reality, what might be called Kim's Max Bygraves moment was a one-off. Pyongyang media rapidly reverted to stale old themes of loyalty and fidelity, which by contrast reinforce the status quo and militate against change as betrayal.

In July 2002 North Korea without public fanfare introduced so-called economic adjustment measures (the word reform is still largely taboo): sharply raising prices and (less so) wages, while giving enterprises more autonomy - or ending subsidies and making them pay their own way. Though small beer compared to China's rampant neo-capitalism, this first halting step may have been inspired by Shanghai; so perhaps Guangdong will have a similar effect.

The appliance of science
Yet other doubts remain, including whether Kim Jong-il truly grasps what is required. After Shanghai he sent architects for training in France and Germany, which suggests a category-mistake (as philosophers would say). Pudong's skyline is sensational, but it is not the point; or rather it is the consequence of more basic reforms. Does Pyongyang really need yet more grand edifices, most of them economically unproductive?

The dear leader's keenness on high-tech may also mislead him into thinking a technical fix is all his country needs. The real lesson of China, ironically, is best put in Marxist terms. It is productive relations (state ownership) that have become fetters on productive forces; so to unleash the latter means altering the former. Despite the growth of markets, it is unclear whether this fundamental point is either understood intellectually, or is politically acceptable.

Alternatively, with China now investing ever more in North Korea, Kim may reckon that Chinese firms will bring in the capital and techniques needed for economic recovery; again without having to embrace unpalatable or risky changes in ownership. While any facilities investment will help, here again the real point of China's changes is being lost - or evaded. 

A political dimension
Needless to say, Kim's trip also had a political dimension. Coming less than three months after Hu Jintao visited Pyongyang suggests a certain urgency, doubtless attributable to the now linked issues of the six-party talks and US financial sanctions. There was no public sign of Kim being pressed on either front, not even to fix a date for six-party talks. Either China is relaxed about this, or enjoying US discomfiture, or it is playing a very long game.

In an unexpected twist, the assistant secretary of state for east Asia, Christopher Hill, who heads the US delegation to the six-party talks, suddenly returned to Beijing - where he had been just a week earlier - on January 18, the day Kim Jong-il left. It was later confirmed that he met his DPRK equivalent, vice foreign minister Kim Kye-gwan; no doubt to discuss how the six-party deadlock might be broken. For now, both sides look well dug in. 

Indeed, Seoul press reports on January 27 claimed that the US is preparing yet more drastic sanctions, which (as per Cuba) would bar any foreign firms doing business with the DPRK from the US. Yet this would only further antagonize Pyongyang, leaving many observers perplexed as to Washington's tactics and priorities. Moreover it is a blunt instrument, since it would also penalize foreign investors such as Phoenix (www.pcvltd.com) whose whole aim is to show North Korea that there is profit to be had from legitimate business.

US-ROK row is grist to the DPRK's mill
If Kim Jong-il returned from Beijing secure in China's political and economic support, the icing on the cake for him will have been to see the US and South Korea at loggerheads just days later. The strain of pretending that presidents Roh Moo-hyun and George W Bush are singing from the same sheet on how to handle North Korea finally became too much. On January 25 the ROK foreign ministry criticized a US embassy press release, which implied that a recent visit by a US Treasury team, bearing proof of North Korea's financial crimes, had urged its Korean ally to join the campaign to curb these. Seoul said there was no such urging. Roh weighed in, insisting that "there are no differences" with the US - but warning that there will be, if "some forces" in Washington continue to "raise issues about North Korea's regime, put pressure on it and apparently desire to see its collapse."

While Roh's frustration at neocon games in Washington is understandable, his own stance of more or less unconditional engagement has flaws of its own. On issues like crime and human nights, like the three monkeys of Chinese proverb the current ROK administration is all too disinclined to see, hear or speak any evil of North Korea. That stance makes Seoul look evasive. With Chinese backing, his enemies rowing, and the US bogged down in Iraq while crisis brews over Iran, all in all Kim Jong-il's regime currently looks in a surprisingly strong position for a rogue state in nuclear and other defiance of the global community.

KEDO, adieu
The new year also saw the sad closing of a key chapter in inter-Korean ties. On January 6 the last 57 caretaker staff, all but one of them South Korean, were evacuated from the now terminated light water reactor (LWR) project site at Sinpo, North Korea, on the Hankyoreh: a vessel which has shuttled fortnightly between the east coast ports of Kumho (North) and Sokcho (South) for the Korean Peninsula Energy Development Organisation (KEDO). The Northern authorities made them leave behind materiel worth US$45m, including some 190 buses and jeeps plus 93 pieces of heavy plant: cranes, excavators, concrete-mixers etc.

If opinions remain divided on how far the October 1994 Agreed Framework (AF) served its avowed purpose of reining in North Korea's nuclear threat, there is no doubt that the now moribund KEDO consortium, created under the AF, helped to bring the two Koreas closer - despite misgivings in both Seoul and Pyongyang - by forcing them to cooperate practically. Over the past decade thousands of Southern engineers and others have lived and worked at Sinpo alongside Northerners; while the Hankyoreh and its ilk, followed by direct flights, were the first regular North-South transport links. Though inter-Korean ties now have their own momentum, the pioneering role of this pre-sunshine precursor should not be forgotten.

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