March 22, 2016: North Korea is now facing an unexpected financial crises as China not only enforces the new sanctions but also the older ones it ignored and adds some new sanctions. Thus North Korea was shocked when on March 1 ^st Chinese border guards refused to let shipments of coal or ores enter. These mineral exports are a major source of foreign currency and were not covered by sanctions. China is believed to be making a point; that it is fed up with North Korea ignoring demands to halt its ballistic missile and nuclear weapons programs and turn its attention to the internal economic crises. So far North Korean leaders are ignoring this additional sanction and telling subordinates that it is only temporary. But the rumors in China are that the blocking of mineral exports will last for a long time, perhaps indefinitely until the North Korean leaderships shows more respect towards China and heeds the advice from its “big brother.”

One option North Korea has is to increase illegal drug production. The government has long produced opium, heroin and methamphetamine (“meth”) for export to obtain foreign currency. This, like the counterfeiting of American $100 bills, cannot be used too much without offending the countries this stuff shows up in. The drugs can be exported via China as long as none of them show up in China. This is especially true with meth, which is becoming a growing problem in China because of illegal manufacturing in northern Burma and smugglers taking it across the border to China. North Korea can fall back on its busy fleet of cargo ships and transport aircraft but these are under increasing surveillance by foreign intelligence agencies and if the Chinese join in this informal “North Korea Watch” coalition North Korean smuggling efforts will be seriously hurt. There is still Russia, but the Russians demand big bribes and it takes longer to get drugs to global markets via Russia. Plus, if North Korean drugs start showing up a lot in Russia, that smuggling route will be shut down or severely restricted.

These drugs are illegal in North Korea but some get into circulation anyway, especially meth. For a long time some meth was produced privately but after 2012 there was crackdown on this, especially the smuggling from China or Russia of the raw materials for drugs like methamphetamine. Breaking bad by making meth was always a dangerous way to get rich, as those caught doing this were frequently executed, often after torture (to ensure they have revealed all they know). Like every other recent crackdown this one eventually succumbed to bribes, which tend to rise until security officials are tempted to risk everything to become rich by ignoring meth labs. Meth use is now growing out-of-control, especially along the Chinese border. That’s where most of the outlaw North Korean meth producers are and most of their meth is smuggled into China and Russia but there is so much being turned out that some is distributed locally. The Chinese border area has become bandit country for other reasons despite the current secret police emphasis is on keeping people from leaving. Things, especially drugs and the larger bribes they deliver, tends to make the police on both sides of the border less effective. Because of the illegal North Korean meth producers there is now more and more Chinese border security and even bribes don’t work as well as they used to (and are a lot more expensive).

The Chatter of Doom

To make matters even worse for North Korean leaders the secret police are reporting that public opinion (which is monitored even though it is generally ignored) is blaming the government, not China or the UN for the increased sanctions. This gets worse because the government is starting a new internal propaganda campaign to blame the rest of the world for the sanctions. These major propaganda efforts are widely unpopular inside North Korea because they involve forcing most of the population to attend hours of lectures on the subject by local officials. Attendance is mandatory and that is regularly checked and verified by the secret police.

Secret police are constantly monitoring what is said on the street and in private (via an extensive network of informants) and most North Koreans believe the missile and nuclear weapons programs are a waste and are hurting North Korea even more when their government publicizes these weapons, threatens to use them and gets more sanctions applied. It is unclear if the secret police passes on details of the growing chatter (none of it complimentary) about how leader Kim Kong Un seems to get fatter as hunger in North Korea becomes more widespread. Kim appears regularly in propaganda photos and videos and no effort is made to doctor these images to hide the constant weight gain.

The informant network is also reporting that the new entrepreneurial class (donju) sees the additional sanctions as a sign that export industries are a bad investment. Many valuable (to the government, for the foreign currency it brings in) export businesses are being financed or run by the donju and the government has found that they cannot order the donju around. What makes the donju useful is their sound economic decisions which are much more profitable than anything the government does. Some senior officials want to crack down on the donju but most of the leadership understands that the government and the economy are too dependent on the donju for that.

Another disturbing cheater topic is about the long rumored Chinese plot to back a military overthrow of the Kim family, in return for the installation of a new ruler that is more pro-Chinese. This is an old theme in Korean history that is still relevant. Most Koreans and Chinese are not surprised by that.

What Makes Slavery So Attractive

The secret police also monitor and report on the chatter among the ruling class, which consists of the two or three percent of the population (including immediate family) who run the government and major institutions (universities, research centers and security forces). The small talk here is that the government does not really have much military power anymore. It is common knowledge that the troops have been going hungry for years and that the war reserves of food, fuel and other supplies have been depleted just to keep the military in existence. The upper crust also think that China has definitely renounced (as China said publicly) its long-time pledge to side with North Korea if there were another Korean War. The ruling families have lots of contacts in China and know that Chinese popular opinion has become hostile to North Korea. All this chatter is occurring as the government loudly denounces the new sanctions and threatens war, including the use of its nukes against the leaders of nations responsible for these unwarranted economic measures against North Korea. That enemies list does not include China but most North Koreans believe it does and so do most Chinese. North Koreans also believe that if there were another Korean War China would move troops into North Korea not to help but to end the war by taking over. Traditionally Koreans fear this kind of Chinese domination and are inclined to fight if invaded. That has kept Chinese armies (although not Chinese influence) out for centuries. But now many North Koreans, especially those going hungry in the dark and without sufficient fuel to cope with the cold weather, see a Chinese takeover, especially a temporary one, as a good thing. More North Koreans are taking that one step further and volunteering for the slave labor program where they go to work in China or Russia and the North Korean government keeps most of their pay. What is left for the worker is still more than most earn back in North Korea and the food is more abundant, the lights work and there is more heat during the six months of the year when it is pretty chilly in this part of the world.

The Impossible Takes Longer

North Korea has made a lot of media noise recently about Kim Jong Un ordering a test of a nuclear warhead and a ballistic missile together. This is another of those North Korean media stunts that is all smoke and no fire. Unless someone (like China or Russia) sold North Korea nuclear warhead tech, it is highly that North Korea has developed this complex and time-consuming warhead tech.

Closing The Dual Use Loophole

The UN uses teams of investigators to monitor violations of arms embargoes and regularly releases reports of violations found. In early 2016 one of these reports noted that North Korea was adapting Japanese civilian maritime radars for its warships. North Korea is still, as of 2015, using Chinese heavy trucks for transporting and launching rockets and missiles.

One Of Our Subs Is Missing

A North Korean submarine appears to have sunk off the east coast while training. North Korea will not admit this but the sub was being monitored by South Korea and the United States and the entire crew seems to have been lost as well. North Korea currently has 70 subs, but most (over 70 percent) of them are very small (and often elderly) coastal types. There are twenty larger (1,800 ton) Romeo type boats but these are also very old, noisy and easy for other subs to detect underwater. These would be the easiest for South Korea and the United States to track from a distance.

March 21, 2016: On the east coast North Korea test fired six of its new guided (by a GPS type system) 300mm rockets from a launcher vehicles. This new MLRS (multiple launch rocket system) first appeared in a late 2015 parade. The North Korean 300mm rockets appeared to have a range of over 100 kilometers. The launcher vehicle was later identified as a Chinese ZZ2257M5857A 6x6 that is meant for civilian or military use. China has come under increasing criticism for allowing its manufacturers to export such “dual use” vehicles to North Korea when it is clear that North Korea wants them only for military purposes. More disturbing is the fact that the new North Korean guided rockets were using technology that could also have been Chinese, as the Chinese introduced such a large guided rocket system in 2010.

March 17, 2016: North Korea launched a ballistic missile that landed 600 kilometers off its east coast. A second missile was also launched but blew up shortly after launch. The next day China warned that such violations of UN prohibitions could have serious consequences. The recent missile and rocket firings are seen as the usual response to joint South Korea-American military exercises, which are underway now.

March 16, 2016: North Korea released a video on the Internet showing North Korean missiles hitting and destroying the office of the South Korean president.

March 7, 2016: In another sign of Chinese anger the Chinese government revealed that its new five year economic plan had, for the first time, lacked a section on economic cooperation with North Korea. A less official (and unannounced) form of rebuke was the Chinese quietly removing the Internet censoring of derogatory chatter about Kim Jong Un (especially his putting on weight). This only applies to Chinese search engines (especially Baidu) but it sends a signal to Chinese Internet users that it is now open season on North Korea and its portly leader. Kim Jong Un is a big fan of tech and the Internet and this Chinese move will offend him big time.

March 2, 2016: The UN approved a number of new sanctions on North Korea. What makes these sanctions different is that China and the United States agreed on them and they include some very harsh new measures. This agreement was the result of meetings and negotiations that began shortly after the January 6th North Korean nuclear test. In the past China has made a show of reluctantly going along with more sanctions on North Korea but this time China made it clear that it is behind the latest round of sanctions and responsible for suggesting some of them. The message to North Korea is that China will not look the other way on any of these new sanctions, or most of the existing ones either.