Korea: China Gives The North An Order It Cannot Refuse


June 10, 2013: The North Korean nuclear test in February was the last straw for many Chinese leaders, and now the North Koreans are being threatened (often in public, which is very embarrassing) and told they must change their ways (no nukes and many more economic reforms). China has cut back on economic aid to the north and cracked down on North Korea smuggling operations (via China). This is hurting the north financially and China has made it clear that things won’t change until the north does what China demands. North Korea has begun repairing relations with South Korea and has implemented more economic reforms. This includes a bonus program for farmers, who for decades have been treated like factory workers, receiving a salary and given few incentives to do a better job. Many farmers know that their Chinese counterparts got performance incentives decades ago and prospered. But that was China, and North Korea condemned the Chinese for capitalist tendencies. No more, as the North Korean government has also loosened state controls on all worker pay in the country. This allows managers to reward more productive workers.

North Korea is being invaded by more than Chinese ideas. The Chinese currency has become the most widely used cash in much of the economy. This was a result of the ill-conceived 2009 currency reforms, which wiped out the savings of many entrepreneurs. Now these business-minded North Koreans prefer to do as much of their business as possible using Chinese and American currency. The local currency (the North Korean won) has lost most of its value (in terms of how many won it costs to buy a dollar or Chinese yuan) in the last four years.

The government is building a ski resort in the northeast (near Wonsan). The area has heavy snow from November to March and will be open to foreigners as well as North Koreans who can afford it (senior officials and the wealthier entrepreneurs). The resort is another perk for the ruling class and a way to extract more cash from tourists and North Korean entrepreneurs. Soldiers are doing a lot of the construction work. There are already some ski runs in North Korea but these were built for military training or to help athletes prepare for international competitions. The big competition will be with their South Korean counterparts during the 2018 Winter Olympics that will be held in South Korea (which already has a lot of ski resorts and many medals from the Winter Olympics).  

A lot of North Koreans still believe in their government, if only because decades of intense propaganda have created a reality that is difficult to abandon. It’s also illegal, and often fatal, to show disloyalty. But the growing information from the outside is causing more and more confusion among North Koreans. The propaganda stressed how North Koreans were special and the Kim dynasty appreciated the unique purity and specialness of the North Korean people and struggled to preserve that unique character. Alas, many North Koreans are more concerned with personal survival and a better life. These malcontents are proliferating and already there are too many to send them all to prison camps. This growing shortage of true believers is seen as a trend that could destroy the North Korean ruling class. The only solution is more money, and nuclear weapons are seen as the wonder weapon that can make it all better. But the nukes are annoying China, which is the only source of emergency economic aid North Korea has left.

Increasingly the cultural threats are coming from China, not South Korea. Videos of Chinese movies and TV shows are easier to get than the South Korean ones. The Chinese vids need subtitles, although many North Koreans (of the sort who have access to these videos) understand Chinese. It’s the kids who are most susceptible to this form of mental “pollution.” While government propaganda can criticize South Korean culture, the Chinese are officially friends and allies and that kind of criticism is not allowed.

The government is trying to deal with the growing bad behavior by using the “mobilization” (ordering people out for unpaid work on the farms or simply to clean up public areas). Avoiding this sort of thing, or not making an effort, is a crime, although the affluent can usually bribe their way out of it. But for most people the growing number of “mobilizations” is tiring and another reminder of the power of the state.

It’s not just ordinary citizens who get mobilized but also members of the military. Even border guards and police units have farms they must tend and during planting and harvesting time most of these uniformed personnel are farming rather than dealing with their usual chores. But the borders must still be guarded, so a lot of the guards pull double shifts, often for weeks on end. This is not only bad for morale but lowers efficiency or simply makes the border security less effective. The overworked border guards are more susceptible to bribes during these times, despite the increased secret police presence (and a long stint in a labor camp if they catch you taking a bribe).

June 9, 2013: North and South Korea agreed to resume high level discussions on matters of mutual interest (economic aid for North Korea and South Korean firms operating factories inside North Korea as well as the North Korean nuclear and missile programs). These talks will begin in a few days. It is believed that North Korea has been forced by China to make peace with South Korea, get their economy in order and shut down their nuclear weapons program. North Korea is resisting that last demand.

June 8, 2013: For the first time in two years there were official talks in the DMZ border village (the traditional neutral ground for such talks). It lasted only an hour and mainly dealt more extensive talks to be held next week. North Korea asked for the talks and South Korea was reluctant to do it believing it was just another propaganda ploy. But China convinced the South Koreans that the northerners were eager to make nice and repair some of the damage northern belligerence had created in the last few months. This includes reopening the recently closed Kaesong Industrial Complex (in North Korea but financed and run by over a hundred South Korean firms employing more than 50,000 North Koreans).

The leaders of the U.S. and China completed two days of talks and agreed that North Korean nuclear weapons had to go.

June 7, 2013: North Korea restored the telephone hotline with the south. The north shut down the hotline in March.

May 26, 2013: China has openly called for denuclearization of the Korean peninsula. Since South Korea does not have nukes, this call was aimed squarely at North Korea. The U.S. had nukes in South Korea during the Cold War but removed them in 1991. China fears that South Korea might develop nukes to counter the threat from North Korea.

May 25, 2013: This month the army began using the locally made KUH (Korean Utility Helicopter). The 8.7 ton chopper is nicknamed “Surion", carries two pilots and 11 passengers, and can be armed with 7.62mm machine-guns and six missiles. Some 60 percent of the components are made in South Korea. The 8.7 ton KUH looks similar to the Eurocopter Puma because technology was purchased from European firm EADS. South Korea spent a billion dollars developing the KUH, and it was designed for civilian and military use. Thus, South Korea becomes only one of 11 countries that produces helicopters. Full scale production began last year. The South Korean military is buying KUHs to replace its UH-1s and 500MDs.


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