Feeling the necessity of change

The catchword in North Korea these days seems to be "earth-shattering change" or "new way of thinking." On January 27, the important figures in North Korea's Cabinet, ministries, central party and administrative committees went on a field trip to the newly built factories and businesses in Pyongyang. Their itinerary included a noodle factory, hygiene material factory, Heungbu Reservoir and an ostrich ranch, all sites that had been inspected by Kim Jong Il on December 11.

Then on February 3, a crowd of heads of provinces and cities visited the bustling land reorganization site of South Hwanghae Province. They were again preceded by Kim Jong Il, who had inspected the site on December 5 and 18. "Looking around at the on-going creation of a new history, the earth-shattering changes unfolding before them, the visitors were truly awed by the fruits of our workers' and party members' labor under the leadership of our Great Leader," reported Pyongyang Broadcasting. The news report went on to talk about the visitors' resolve and determination to root out "old notions" and take on "ideological viewpoints and thinking befitting the new century."

The phrase "earth-shattering changes" was comically out of context, but ever since Kim Jong Il used that phrase during his visit to China, it seems to have become the new catch phrase in North Korea. Another word that has become popular is "new way of thinking," thanks to the ?Rodong Shinmun?, which began stressing the importance of new ways of thinking since early this year.

Last year, the historical North-South summit gave rise to much speculation over the possibility of North Korea opening up to the outside world. Then the announcement of North Korea's plans to build a Special Economic Zone in Kaesong made the possibility a near-reality. But North Korea had never stated its intentions to open up through any of its official policies, party lines or political theories. Then North Korea went through a dramatic change in attitude this year. The New Year Public Editorial 2001 published in the ?Rodong Shinmun? exhorts the people to "break away from old notions and embrace innovative views, creative thinking and progressive working methods."

The January 4 edition of the ?Rodong Shinmun?, in proposing the '21st century new way of thinking,' said, "In the New Millennium, all matters should be approached from a new point of view and a new level of thought." The same newspaper then elaborated this 'new way of thinking' in its political commentary on January 9, admonishing the people to "throw out backward ideas as the new century dawns, and bring about fundamental changes not only to our way of thinking but also to our work attitude and lifestyles …" All these words are clear indications of tremendous changes in North Korea's party line and policies. This was immediately followed by Kim Jong Il's visit to China, which served to confirm that North Korea was undergoing some huge changes. It seems that Kim Jong Il had made up his mind to open North Korea's doors before setting foot in China. But he must have felt the need for changes much more keenly when he saw with his own eyes the sights of Shanghai, which had turned from the barren fields of Pudung to the 'New York of the East' in a matter of 20 years.

In September 1984, North Korea did attempt to open its doors through the amendment of its joint business project laws. But all it led to was a few joint projects with Korean Japanese companies. Then in December 1991, North Korea designated Rajin-Sunbong as a free trade area in an attempt to lure Western countries into economic cooperation. This again ended in failure. Rajin-Sunbong was a superficial imitation of China's special economic zones, and it only attracted about 140 million dollars of foreign capital as of March 1999. Deterioration of relations due to nuclear suspicions, lack of social infrastructure and the absence of investment guarantee laws were all barriers to western capital investment.

Until Kim Jong Il's visit, North Korea had been hesitant about adopting Chinese-style reform and liberalization, and stingy when it came to favorable comments about China's economic achievements. All that changed with Kim Jong Il's visit to China in May. North Korea began to view China's reforms in a totally different light. During his meeting with President Zhang Zhimin and Premier Zhu Rungji, Kim Jong Il told them that he thought very highly of China's reforms and liberalization. It is said that Kim chose Kaesong as the site for the special economic zone because Zhu had advised him to select an area near the armistice line. It seems that China had a hand in bringing about the inter-Korean summit as well. China is playing an extremely important role in North Korea's changes. In other words, North Korea's opening up and China's role are very closely related.

North Korea turns to China for economic cooperation and support

It is reported that during the summit, the two heads of state agreed to designate North Korea's Shinuiju and China's Dandong, two areas facing each other across the Yalu River, as special economic zones. According to a well-informed source in China, this announcement was made by the newly appointed mayor of Liaoning Province during an unofficial meeting of the economic and trade reform committee members of Dandong, Shenyang and Dalian that took place from January 21 to 23. This bilateral plan, together with Kim Jong Il's personal supervision of the construction of light industry factories in Shinuiju from January 21 to 23, signals the beginning of an era of reform and liberalization in North Korea. Furthermore, Kim Jong Il had once strongly urged Hyundai to build its special economic zone in Shinuiju.

The Chinese news source also revealed that Zhu and Kim had agreed to turn Dandong into a second Shenzhen (a special economic zone in Southern China), and that the province of Laioning had formed plans to turn the 38 km stretching from Dandong to the Tung River into a large-scale industrial complex similar to Shenzhen. China is currently planning to expand the single-track railway connecting Dandong and Shinuiju into a double-track and to expand the highway in order to facilitate freight transport. The two countries are also studying plans to construct a new bridge over the Yalu River while preserving the ruins of the railway bridge that American soldiers blew up during the Korean War. To top off these grandiose plans, the Chinese government is going to expand the Korean language departments in its universities in preparation for increased trade with North Korea.

The largest reformed city in China, Dandong is a trade hub that acts as a bridge for 70 ~ 80% of North Korea's exports. When the inter-Korean Kyungyi railway starts operation in September, trains headed for Mainland China and Siberia must pass through Dandong. Accordingly, China has formed ambitious plans to develop Dandong into a strategic stopover point. People starting off from Dandong would only need a pass to enter Shinuiju, and it would be easy to supply power between these two points.

If the Chinese government supplies not just electricity but the coke and soft coal needed to run iron mills and power plants, and if it also supplies crude oil through the oil pipes that are installed between Taching in Heilongjiang and Pihyun in North Pyongan, North Korea will be able to enjoy unprecedented economic development. Furthermore, North Korea's severe food shortage can be alleviated if China releases the surplus corn it has in three of its Northeastern provinces to be used for food aid. Under these circumstances, and considering North Korea's political position, Kim Jong Il's visit to China could mean that North Korea is starting to look to China rather than South Korea for economic support and cooperation.

Some of the companies doing business in North Korea claim that since the economic crisis in South Korea, North Korea has begun to have doubts over the South's ability to provide economic support. These companies believe that North Korea has changed its direction and is now stepping up diplomatic efforts in a bid to make China a dependable business partner. The fact that such claims were reported in the media indicates that the entrepreneurs in North Korea are not just imagining things. Adding to the psychological burden are the rapid economic downturn in South Korea after the inter-Korean summit and the financial woes of Hyundai, the conglomerate that is building Kaesong special economic zone.

During the building of Rajin-Sunbong Economic Free Trade Zone, China was in no economic condition to help North Korea. China was naturally skeptical about what was at best a half-hearted attempt at liberalization. Furthermore, China was furious over its failed bid to host the Olympics, which they blamed on North Korea. At that time, the entire Chinese population was intent on making China the host of the 2000 Olympics. China was pulling all the strings and mobilizing all the money and diplomatic resources it had to be elected as the host of the next Olympics. It had a good chance of winning the bid, but in the end, it lost by one vote: North Korea had cast a blank vote in protest of China's diplomatic ties with South Korea. Had North Korea refrained from abstention, Beijing would have won the bid, since IOC Chairman Samaranch, who had the casting vote, was personally in favor of Beijing. China was in an uproar. The Chinese were shocked that the very country that China had helped during the Korean War by dispatching hundreds of thousands of Chinese soldiers could betray them at such a crucial moment. A lot of water has passed under the bridge since then, but the average Chinese still recalls that incident with bitter feelings, showing just how outraged they had been back then.

Ever since that catastrophe, the two countries had not exactly been at loggerheads, but the relationship had definitely cooled. Then, North Korea's food crisis forced it to depend on Beijing, and both countries started to realize that cooperation was essential in light of developments in Northeast Asia. Consequently, the two countries rapidly re-established close ties. There have been reports that China has been secretly providing vast amounts of food aid to its neighbor in the past few years.

North Korea and the new order in Northeast Asia

From Pyongyang's point of view, its Southern counterpart can be quite a political burden. Just the fact that South Korea has a per capita GDP 20~30 times that of North Korea and enjoys relative political freedom (tremendous freedom compared to the North) is enough to make North Korea think twice about opening its doors to the South. That the Northerners and Southerners share the same roots and that the North Korean people strongly desire national reunification only serve to threaten the system. Thus, for Pyongyang, Beijing is a much more comfortable economic partner than Seoul.

Actually, economic cooperation between North Korea and China lacks the incentive to develop on its own. But on the other hand, because of the unique relationship between the two countries, once Beijing decides to make the effort, it would be only a matter of time before economic cooperation becomes a success. The biggest problems North Korea faces in opening up is first, lack of investor confidence regarding its political and military future, and second, lack of infrastructure to provide the incentive for investment. An economic partnership would not be so bad for China either. First of all, Beijing must have realized by now the need to play an active role in maintaining political stability in North Korea. And second, it is only natural that a capitalist like China with huge funds and a rationale more political than economic would want to build infrastructure in North Korea, especially if it is in the special economic zones. Letting North Korea make use of China's infrastructure would be another feasible plan.

One must remember, however, that Kim Jong Il did not visit China only to talk shop. In fact, there was an even more important issue involved - China-North Korea alliance, now fully restored after two visits to China and accompanying rounds of fruitful economic discussions. Although politicians and the intellectual elite in China may be the last to admit it, Beijing is preparing for confrontation with the U.S. The U.S. on the other hand has openly declared the need to prepare for the era of confrontation with China.

Under these circumstances, it has become very important for China to ensure that North Korea is on its side. The traditional alliance has been there, but hanging by a thread for the last decade. The time has come to mend relations. Although economically unimpressive, North Korea still has military clout, as well as a special relationship with an economically impressive South Korea. On top of that, geopolitical rhetoric dictates that North Korea is a force to be reckoned with in Northeast Asia. If it becomes closer to Washington than Beijing, or if it is absorbed by Seoul, that would spell disaster for Beijing. Even if North Korea is not absorbed by the South, the collapse of the system alone could have adverse effects on Chinese politics and public sentiments. So China has more than enough reasons to help North Korea. For the survival of its regime, North Korea, on its part, would definitely prefer a close relationship with China to an awkward and unstable relationship with South Korea, the U.S. or Japan. Furthermore, it would be much better for Pyongyang to secure a strong alliance with Beijing as insurance against any further developments in the military alliance between Seoul and Washington.

Against this backdrop, Kim Jong Il's plan to visit Russia is causing quite a stir. Russia's ?Izvestiya?reported on February 5 that Kim Jong Il will be visiting Russia in April to discuss issues such as the linking of the Trans-Korean Railway and the Trans-Siberian Railway, power supply to North Korea and Russia's arms purchase. North Korea is reportedly moving to reinforce its defense of territorial skies by importing Russia's S-300 interceptor missile and assembling the SU-27 fighter plane in its country. Russia is also studying plans to export armored vehicle models 10 BTR-80 and 100 BMP-3 to North Korea.

Building on the strategic tripartite alliance between Russia, China and India proposed by Russian Prime Minister Yevgeny Primakov, Foreign Minister Igor Ivanov announced Russia's new foreign policy on July 10, 2000. This new policy opposes the U.S.-dominated unipolar world order; places Asia on the top of Russia's diplomatic priorities, aims to build a multi-polar world order centered on Russia, China and India, and finally regards alliance with China as the most essential part of its international strategy. Around the time of the announcement of this new foreign policy, two rounds of summit talks between the two dinosaurs took place on July 5 and 18, in Tadzhikistan and Beijing respectively. During these talks, China and Russia reconfirmed their strategic partnership and agreed to oppose American hegemony together. President Putin then promptly visited Pyongyang for a summit meeting with Kim Jong Il, where the two leaders agreed to strengthen political, economic and military cooperation. This shows just how deeply North Korea is involved in the overall realignment of power in Northeast Asia. Kim Jong Il's visit to China and his pending visit to Russia are reconfirmations of this.

The China-North Korea alliance and future policies towards South Korea and the U.S.

Hong Kong's current affairs daily ?Mingpao? commented on January 17 that North Korea is moving to form alliances with China and Russia in order to oppose American hegemony and its ambitions for the NMD, and that North Korea's visit to China was closely related to such intentions. The article went on to surmise that North Korea had visited China to discuss important policies regarding regional security under the assumption that U.S. North Korea policies and foreign policies would change with the inauguration of the Bush administration. In short, North Korea, along with Russia and China, feels the need to prepare for the Bush administration's rise to power and any ensuing confrontations. ?Mingpao? predicted that North Korea may move to renew friendly ties with Russia and China and that Kim Jong Il's visit to China will be followed by a visit to Russia for further discussions concerning the NMD issue. ?Mingpao?'s comments are a reflection of the current political situation in Northeast Asia, and an accurate analysis of the significance of Kim Jong Il's visit to China.

The complete restoration of the China-North Korea alliance, together with the mood of reconciliation between the two Koreas, is expected to be a big blow to the national interests of the U.S. As mentioned earlier, North Korea is an essential part of the political climate currently dominating Northeast Asia. And there is nothing that the U.S. can do to prevent it from adversely affecting American interests in the region. Washington will continue its efforts to improve relations with Beijing, but such efforts are not expected to bear much fruit. Even if the U.S.-North Korea relationship does show improvement, the U.S., unlike China, cannot force its investors to put their money in North Korea, meaning that the U.S. cannot offer economic benefits as an effective carrot to the starving country.

Furthermore, the North Koreans have always suspected that the U.S. is out to subvert their system, which sufficiently obliterates any inclination to cling to the U.S. All that matters to North Korea as far as the U.S. is concerned is perhaps getting off U.S.'s terrorism blacklist, which would at least serve to minimize restrictions and maximize economic support from China. And that can be achieved with a few political gestures on the part of North Korea. All in all, U.S.-North Korea relations may be headed for rapid improvement on the surface, but in the mid- to long-term, chances are that relations could be worse than 6 to 7 years ago. In addition, it would be safe to say that North Korea has scrapped or at the very least lost interest in its so-called 'have dialogue with the U.S. while isolating South Korea' strategy. North Korea's plan now could very well be economically opening up to the U.S. and South Korea while politically isolating both countries.