Will the impending Xi Jinping era in China bring change of any kind in North Korea? It is assumed in diplomatic circles that Kim Jong Eun will act proactively to try and impress the Xi government in the period after it takes over; this is seen as an essential step given Pyongyang’s reliance on economic and diplomatic links with its giant neighbor.
Kim Jong Eun must remain conscious of China’s response in all policy arenas: moving the Party to the forefront of the ruling system, promoting the ‘June 28th Policy,’ planning a 3rd nuclear test… nothing can be done without knowledge of the likely Chinese response.
This is why Kim Jong Eun had face-to-face talks with Wang Jiarui, the CPC International Department director, on August 5th, and why one of his trusted confidants, Jang Sung Taek, took a huge delegation to China from August 13th to 17th. Irrespective of the results of those meetings and trips, both emphasized North Korea’s understanding of the importance of bilateral relations to its future.
However, the Chinese government has not yet granted North Korea the kind of pay-off in response to these overtures that Pyongyang would like. The Chinese Ministry of Commerce has moved to strongly encourage investment in the SEZs at Rasun and Hwanggeumpyong, but this is only a fraction of the help North Korea needs, and it also focuses on private investment within a sink-or-swim market system; North Korea much prefers the stability inherent in state-to-state transfers and investments.
Therefore, one key to future Sino-North Korean economic cooperation is how many Chinese demands North Korea is ready to accept.
North Korea has already amended its foreign investment laws to try and attract Chinese companies, and has achieved modest successes, but there is still a long way to go. Kim Kwang In, who leads the North Korea Strategy Center, told Daily NK, “North Korea’s policy toward China cannot avoid changing as and when China’s policy towards North Korea changes. Because Xi Jinping and the Chinese leaders want opening and reform in North Korea, the North Korean authorities must eventually respond to their demands to some degree.”
Another, anonymous North Korea expert agreed, and added, “Kim Jong Eun wants to unfurl a reform and opening policy, so he is not going against the direction of the Chinese leadership. China is the only one he should expect to get anything from anyway, so in order to promote reform and opening he will have to continually cooperate with China.”
According to Ministry of Unification data from 2011, 89.1% of North Korean trade (not including that with South Korea) is with China. Even if the U.S.-South Korean policy towards North Korea changes after the presidential elections in November and December respectively, North Korean opening and reform will still only happen with Chinese assistance, meaning that North Korea’s attitude toward China will go on unchanged. As Kim explained, “North Korea has nothing with which to make an economic breakthrough apart from exporting natural resources like coal and iron ore to China.”
However, Kim also noted that “The North Korean authorities do not want one-sided trade dependence on China.” This is one reason why Pyongyang has been aggressively pursuing outreach in Southeast Asia and Russia of late, with Supreme People’s Assembly Permanent Chairperson Kim Jong Nam taking the lead on state visits to places including Vietnam, Indonesia and Singapore.
North Korea is also actively pursuing talks with Japan for similar reasons, Kim said, noting, “The recent North Korea-Japan negotiations are aimed at escaping dependence on China by improving relations with Japan.”
China’s current demands are sensitive for North Korea, and it is likely to take some time for a relationship as firm as that between China and Kim Jong Il’s North Korea to emerge even after the Xi government has settled in. It is clear that North Korea will also try to distance itself from China’s orbit, though it is hard to see how this goal will meet with significant success in the present international environment.