The Korean war: another ghost has to be laid to rest – Zhang Lijia

 

Zhang Lijia

China has a lot of historical luggage it has trouble coming to terms with, says author and journalist Zhang Lijia. The Korean was, claimed by China as a victory, is one of major historical issues the country has to come to terms with, she writes in a comment at the South China Morning Post.

Zhang Lijia

Was it a victory as China claimed? Most historians outside the mainland agreed that it was a genuine stalemate, resulting in the 1953 armistice. However, the war was “a powerful vehicle for creating a stronger sense of socialist identity at home”, according to University of Oxford historian Rana Mitter, author of the recently published book China’s Good War. “Mao’s regime used the war as a means of mobilising sentiment within China, helping to increase the wider sense of nationalist feeling.”

I believe the war gave a morale boost to millions of Chinese, in the wake of the humiliation China had suffered at the hands of foreign powers. Having won the respect and fear of its neighbours, China became a major regional power after the war.

Even if it had been a victory, how about its cost? China spent over 10 billion yuan on the war (US$1.5 billion at current exchange rates), a devastating amount for a country that was desperately poor and scarred by a civil war that had just ended. And there was the heavy human cost. According to official figures, nearly 360,000 Chinese soldiers were either killed or wounded, including Mao’s son, Mao Anying. The true death toll could be higher.

The Korean war is thought to be one of the most destructive conflicts in the modern era, with around 3 million casualties. The monumental event deserves to be commemorated and the truth surrounding it needs to be told.

Much more at the South China Morning Post.

Zhang Lijia is a speaker at the China Speakers Bureau. Do you need her at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Trump plays political games by accusing China banks to break North-Korea sanctions - Shaun Rein

Shaun Rein

US president Donald Trump fired another salvo in the trade war on the story three major Chinese banks participated in breaking the sanctions on North-Korea. A part of Trump's political game, says Shanghai-based business analyst Shaun Rein in the South China Morning Post.

The South China Morning Post:

Analysts said the timing of the report was sensitive. Shaun Rein, managing director of China Market Research Group in Shanghai, said it could be another “pressure tactic” following the export restrictions on Huawei Technologies by US President Donald Trump, given he is going to meet his Chinese counterpart, Xi Jinping, this week in Osaka during the G20 summit.

“I view it as likely to be a politically motivated attack by Trump administration officials looking for excuses to contain and curb China’s growth … It is doubtful that a large bank such as China Merchants Bank would break sanctions, as it has too much to lose,” he said.

China Merchants Bank dropped by more than 8.2 per cent on Tuesday in Shanghai, but recovered after the bank’s statement to close at 36.1 yuan, 4.8 per cent lower. Its H shares dropped by 7.9 per cent to close at HK$38.4 in Hong Kong. Bocom fell by 3 per cent to close at 6.1 yuan in Shanghai. Its H shares eased 3.7 per cent to close at HK$5.95. SPDB fell 3.1 per cent to close at 11.7 yuan in Shanghai.

More in the South China Morning Post.

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How China will benefit from the Korean Reunification - Jim Rogers

Jim Rogers

China will benefit greatly from the Korean reunification, argues investor Jim Rogers, as will North Korea. Many North-Koreans already live in China, and those will be important when political changes take place.


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Promising investment prospects in North Korea - Jim Rogers

Jim Rogers

For investors the prospects for North-Korea are similar to China in 1978, says superinvestor Jim Rogers, author of Street Smarts: Adventures on the Road and in the Markets,  according to the Korean medium Hankyoreh. “If North Korea introduces reforms and openness, it will achieve rapid economic growth in the double digits or higher.”

Hankyroreh:

“If North Korea introduces reforms and openness, it will achieve rapid economic growth in the double digits or higher.” 

Speaking in an Oct. 2 interview on the Traffic Broadcasting System (TBS) program “Kim Eo-jun’s News Factory,” world-renowned investor Jim Rogers, chairman of Rogers Holdings, said North Korea is currently “in a similar situation to China when Deng Xiaoping came to power in 1978.” 

“The positive changes happening in North Korea will make the entire Korean Peninsula a very suitable target for investment,” he predicted. 

Rogers also offered a positive appraisal of South Korean President Moon Jae-in’s policies for their role in guiding North Korea toward reforms and openness. 

“If President Moon’s North Korea policies succeed, South and North Korea will be able to save a great deal of money and bring tremendous peace not just to the Korean Peninsula but the world,” he said. 

“I sincerely hope and believe President Moon’s North Korea policies will succeed,” he added. 

Rogers pointed to North Korea’s abundant workforce and natural resources as factors making it an appealing investment target. 

“ With [North Korean leader Kim Jong-un] attempting changes, the combination of South Korean knowledge, capital, and know-how with North Korea’s human and natural resources will make a tremendous Korea that even Japan won’t be able to match,” he predicted.

More in Hanyoreh.

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Time for a new approach of North Korea - Harry Broadman

Harry Broadman

North and South Korea have started talks, potentially defusing the tension in the region. Time for a new and more positive approach of China's unruly neighbor, says Harry Broadman, former PwC Emerging Markets Investment Leader; in Gulf News. For example by nurturing the country's private sector. It might be coming as a surprise for many, but North Korea does have a private sector, Broadman writes.

Harry Broadman:

The world has marvelled that South Korea and North Korea have had their first dialogue in two years, paving the way for the North’s participation in the Winter Olympics in Pyeongchang County, South Korea. 

But few seem struck by the obvious lesson: a dose of incentives alongside the disincentives of sanctions championed by the US and passed unanimously by the UN Security Council, may well be the policy mix to pursue with Kim Jong-un. Without overstating the impact a changed prescription along these lines might have on Kim’s conduct, it’s hard not to argue that at this juncture the world surely needs to get far more creative in dealing with Pyongyang. 

To this end, one area that has a hope of progress is for the US and other members of the Security Council to support economic reforms that give life to North Korea’s nascent private sector. Indeed, this change in therapeutic approach could be just what the doctor ordered. It will shock most readers to know that North Korea already has a private sector, albeit of limited scale and scope. As best as those of us who assess such things can tell from the paucity of opportunities for first-hand observation in light of Pyongyang’s political regime. And, these businesses have begun to grow materially over the last decade. Arguably, they may well be ripe for nurturing.

More at the Gulf News.

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Xi-Trump trade deal might be over - Arthur Kroeber

Arthur Kroeber

The deal between presidents Donald Trump and Xi Jinping on a mutual trade peace, reached a hundred days ago, might be over, and was not very realistic to start with, says economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know® to the South China Morning Post.

The South China Morning Post:

China’s trade surplus with the US was pegged at US$107 billion in the first four months of 2017, according to US Census Bureau data. That puts the surplus on course for a full-year 2017 imbalance on par with the US$347 billion recorded in 2016, which Trump used to back up his anti-China rhetoric before taking office in January. 

“Rumours continue to percolate that Trump is preparing for more aggressive trade action,” Arthur Kroeber, founding partner and managing director at Gavekal Dragonomics, said in a recent report. 

“The basic deal Trump thought he offered Xi at the Mar-a-Lago summit – a light touch on trade in exchange for more cooperation on North Korea – was absurdly unrealistic, given China’s obvious unwillingness to change its North Korea policy.” 

With reports due from the US Commerce Department on steel and aluminium trade and calls for more scrutiny of Chinese investments in the domestic tech sector, Trump has another card to play in Germany.

More in the South China Morning Post.

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Trump cannot win over Pyongyang by pushing China - Arthur Kroeber

Arthur Kroeber

President Trump's rather simplistic views on foreign affairs have waken up many observers. Trump's approach to push China on North-Korea might be just an example where easy solutions do not work, tells political analyst Arthur Kroeber, author of China's Economy: What Everyone Needs to Know® at the South China Morning Post.

The South China Morning Post:

China’s reluctance to increase pressure on North Korea amid the country’s continuous testing of ballistic missiles is setting up a clash with US President Donald Trump over economic issues that the US cannot win, according to Arthur Kroeber, managing director of Hong Kong-based financial services firm, Gavekal Dragonomics. 

“Trump has, against the advice of pretty much everyone in the traditional foreign policy establishment, now created a direct linkage between the security issues and the economic issues and the problem with that is that it’s most unlikely that the Chinese will deliver anything material in terms of constraining North Korea,” Kroeber said at an investor seminar in New York. 

“When it becomes obvious later this year that the Chinese are basically paying lip service to that issue, that then creates an incentive to get tougher on China on the economic issues.” 

The US does not have enough leverage against China to force Beijing’s hand on either the security or economic issues, making it unlikely that failure to agree on an approach to North Korea will lead to a trade war, Kroeber said. 

“If the US does decide to get more aggressive with China on economic and trade issues, China has plenty of stuff to fight back with, and I think ultimately the loser from that confrontation would be the US.”

More at the South China Morning Post.

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At last, Beijing might get serious about North Korea - Paul French

Paul French

China has been trying to ignore its unruly neighbor North Korea for as long as it was possible. And North Korea was more interested in talking to the US, and less to China. But Beijing might at last be changing its tune, says Paul French, author of North Korea: State of Paranoia (Asian Arguments) to the Washington Post.

Paul French:

Beijing’s current thinking may be that responding to North Korea’s recent bouts of belligerency with a coal ban punishes Pyongyang more directly (i.e., right in the wallet) than the Chinese have previously been willing to do while also letting Washington know it is not afraid to get a lot tougher with an old, but frustrating, ally. Though it’s worth considering that Beijing, with its horrendous pollution problems, is itself looking to diversify away from coal-fired power, so maybe there is no great sacrifice on the Chinese part here. 

Beijing’s recent policy of studiously ignoring Kim hasn’t worked. Chinese President Xi Jinping has visited locations as far flung as Fiji, Belarus and Zimbabwe but has never taken the one-hour shuttle from Beijing to Pyongyang. The coal ban then is the start of what may be a series of harsher measures that could include finally getting tough on North Korean bank accounts in China, putting limits on Chinese firms doing business in the country, restrictions on North Korean officials transiting through China, and a demand that Pyongyang rejoin the Six Party Talks or risk losing essential aid supplies. 

Trump, like President Obama before him, may be right that the way to contain North Korea is through Chinese pressure. But perhaps it is the events that Trump’s ascendancy appear to have unleashed from Pyongyang that will finally force Beijing to get seriously tough with their neighbor.

More in the Washington Post.

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North Korea: clueless about economic reform - Paul French

Paul French

The execution of North-Korea´s vice-premier Choe Yong Gon shows again we should not have too much hope for China-style economic reforms, writes Paul French, author of North Korea: State of Paranoia, for Reuters. "There are no coherent ideas about economic reform."

Paul French:

Choe’s death, which reportedly occurred in May and under the direct order of the supreme leader, is of particular interest to those seeking to discover what, if any, policies Kim may have to reboot the North’s failed economy. Choe came to some prominence in the mid-2000s when he represented Pyongyang in breakthrough trade talks with Seoul. He was also seen as prominent in the 2004 opening ceremony of the Kaesong industrial zone, a factory park run with Seoul that is the last remaining joint project of the two countries. 

Both the North-South economic cooperation talks and the Kaesong project were relics of Kim’s father’s brief flirtation with economic reform. The reforms were announced in 2002, when North Korea’s economic situation had become dire. There were food shortages, industry had grinded to a halt, aid donations were falling because of the political impasse over the North’s restarted nuclear program and donor fatigue had set in following the horrific famine of the 1990s. Despite this catalogue of disasters, Pyongyang had always resisted reform. When China’s leader Deng Xiaoping told Kim Il Sung that China’s reforms were a window to the West, Kim replied: “When you open a window, flies come in.” 

Still, the 2002 reforms - including wage and pricing changes, greater marketisation, a looser agricultural policy, reform of  the Public Distribution System (rationing) and a Chinese-style special economic zone in the city of Sinuiju - were the first real reforms to touch upon the domestic economy. But the reform process, described as “perestroika à la Pyongyang,” was disjointed and ultimately failed. The reforms were incomplete; at best, failures and, at worst, the cause of further economic deterioration. The Sinuiju experiment was completely delinked from any other economic activity in the country and went nowhere fast. 

It remains unclear from where within the closed world of Pyongyang the reform impetus sprung. It is assumed that Kim Jong Il, “Dear Leader” and father of the current leader, was the instigator, though, among his then-inner circle, it seems Choe was a champion of greater openness. The failure of the reforms could not be apportioned to the Dear Leader, and so others, such as Choe, had to shoulder the blame. Strike One against Choe.

More at Reuters.

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Why North-Korea failed from the start - Paul French

Paul French

Author Paul French of North Korea: State of Paranoia reviews for the Washington Post. Blaine Harden´s latest book on North Korea The Great Leader and the Fighter Pilot: The True Story of the Tyrant Who Created North Korea and The Young Lieutenant Who Stole His Way to Freedom.

Paul French:

Harden makes some good points. Wartime antagonisms with the Chinese communists led Kim to develop a long-term, visceral dislike for Mao. The feeling was seemingly mutual. But with Moscow only remotely engaged in the Korean War (the U.S.S.R. mostly limited itself to sending supplies, political advisers and, important for this tale, MiGs), Mao felt he had to be involved. He sent his “volunteers” to bolster Kim’s flagging army in Korea, allowing the former Chinese leader Chiang Kai-shek, who had fled the mainland, the breathing space to reinforce the fledgling defenses of Taiwan against Beijing. By the end of the war in Korea, Fortress Taiwan was far better prepared to repel an invasion from the mainland, and America had moved toward supporting Taiwan militarily. 

Of course tyrants have pasts, and, as Harden points out, Kim’s was rather unexceptional. His guerrilla-fighter credentials have been overstated. Rarely a master of military tactics, he was instead a master of the Stalinist power playbook — self-elevation, rewriting history, demanding fealty and purging those slow to offer it. Like Stalin, Kim grasped his moment, swept aside his challengers, flattered his supporters and became supreme. Harden also shows that the U.S. carpet-bombing of North Korea during the war was brutal and its effectiveness questionable. Yet it gave Kim a legitimacy and a narrative of American brutality that echoes through the North’s early years of construction to the present day. Pitted against the story of the Great Leader’s ascendancy is that of No Kum Sok, an airman in the North trained to fly MiGs by Soviet pilots. His daring escape, with the prize of a Soviet MiG to deliver to the Americans, is thrilling stuff. However, it is No’s long-standing distrust of Kim and his nascent regime that is important. The official North Korean narrative admits no dissension, no opposition. No is living proof that it did exist in the early days of the regime. 

Harden describes how Kim became marginalized as the Sino-Soviet split evolved and communist fraternalism collapsed. Both Stalin and Mao came to regard Kim as a marginal figure in the communist world. From the start Kim’s kingdom faced economic challenges that it was not ideologically equipped to solve. The Stalinist self-sufficiency blueprint didn’t work. South Korea’s emergence from devastation and military rule to become a booming Asian Tiger economy and vibrant democracy took time and masked the discrepancies between the Koreas for a while. Kim was never able to build a self-sufficient nation and had to tap Beijing and Moscow for aid, soft loans and arms.

More in the Washington Post.

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North Korea´s gentle power shift - Paul French

+Paul French 

The disappearance of North Korea´s leader Kim Jong-un from public view, might not be as dramatic as some commentators have suggested, writes author Paul French of North Korea: State of Paranoia: A Modern History in a Reuters´blog. It might as well be a gentle power shift from one-man rule to the country´s elite, based on consensus.

Paul French:

Kim Jong-un has apparently gone AWOL. His movements unknown, the reason for his sudden invisibility mysterious. Nobody in Pyongyang is saying anything. But then nobody in Pyongyang ever says very much. Still, Kim has been hard to find since early September and the North Korean media have not posted any pictures of him inspecting a jam factory or shouting into a field telephone at some remote artillery post. “Kim watching” is bread and butter to the smallish coterie of Pyongyang Watchers and radio silence inevitably gets ratcheted up to suspicions of ill health, death, murder or coup. 

In the world of North Korea analysis there’s no light comedy or gentle drama – it’s always straight toMacbeth! But hold on a minute before we put the U.S. Seventh Fleet on red alert or open up the bomb shelters in Seoul. We’ve been here before… 

Rumors of attempted military coups among the shadowy Pyongyang elite have emerged regularly over the years. The 1950s and 1960s saw show trials of senior military personnel, when Kim Il-sung purged political rivals after sequestering himself and leaving analysts wondering where he’d got to. In the late 1960s Chinese Red Guards claimed that Kim Il-sung had been arrested by army generals after he wasn’t seen for a bit. A further purge of the military hierarchy reportedly followed, so maybe the Red Guards knew more than most... 

What we may be witnessing here is something far less dramatic than a coup, but no less important in many respects –- a shift from the traditional policy of the all-powerful, all-guiding  “Suryong Dominant Party-State System,” whereby the supreme leader directly rules over the party, the government, and the military, to something more consensual among the elite. Kim Jong-un may now be accepting advice and delegating roles to a greater extent. His domestic position will remain dominant, a figurehead to the North Korean people, but internationally, and particularly in relations with South Korea he may be purposely taking a back seat to allow a breakthrough.

More in the Reuters´blog.

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Paul French is a prolific author and speaker on China and North Korea. For a regularly updated list of his activities, click here. 

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Carrots nor sticks deter Pyongyang - Wendell Minnick

Wendell Minnick

The latest nuclear test by North-Korea shows the rogue country is not going to be stopped,  even not by its closest ally China, writes defense analyst Wendell Minnick in the Army Times. 

Wendell Minnick: 

There will no doubt be additional domestic and international calls for more sanctions against North Korea, but, in reality, the iron lung that keeps North Korea going might be beyond sanctions. 

North Korea’s expatriate community in Japan and China continues to travel back and forth delivering gifts, money and information. Many of these expatriates operate import and export businesses in China near the North’s border. These businesses help supply the North with a wide range of hard-to-find equipment and supplies.
One U.S. analyst on North Korea who visited the area from the Chinese side said trucks travel back and forth 24 hours a day without hindrance from China. Though China has recently expressed tougher language on curtailing North Korea’s nuclear and missile testing antics, it is still unclear if Beijing will take any real action.
To focus too much on China would be unfair. There are even export companies operating in Taiwan that facilitate the export of equipment to North Korea, including the Royal Team Corporation. 

More in the Army Times. 

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