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     Dec 4, 2010

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Dear Leader's designs on Uncle Sam
By Peter Lee

Dedicated moose stalker Sarah Palin wants WikiLeaks founder Julian Assange "hunted down". The leading apostle of Christian values on the American right, Mike Huckabee, wants the leaker "executed".

On November 30, the WikiLeaks server was taken down by a 10 Gbps (Gigabytes per second) denial-of-service attack. United States Senator Joe Lieberman successfully persuaded Amazon to remove the mirrored WikiLeaks diplomatic cables trove from its hosting cloud in the United States.

WikiLeaks is back up, at least for now, from a site hosted in Europe and the cables can be viewed here.

But the Chinese are probably snickering at the ambivalent light


shone on the US "information freedom" agenda.

As to the secrets revealed vis-a-vis China, North Korea and South Korea in the WikiLeaks cables, about 30 of the 600 or so of the quarter-million cables that have been released as of December 1 touch on China and North Asian affairs; not much perhaps, if one has been paying attention. But they provide valuable context for interpreting North Korea's recent provocative moves: the revelation of a new light-enriched uranium centrifuge to visiting American scientist Siegfried Hecker, and the bloody shelling of Yeonpyeong Island.

North Korea is desperate to establish relations with the United States. South Korea, under President Lee Myung-bak, wants the North to collapse and to dominate the reunification process.

As for China, it yearns for peace and quiet and a secure, viable North Korean buffer state on its northeast border.

The Guardian's Simon Tisdall published a rather breathless article declaring that the cables revealed that China had reconciled itself to unification of the Koreas. [1]

Cooler heads - Barbara Demick at the Los Angeles Times [2] and Charles Homans at Foreign Policy [3] - promptly pointed "considered the source" and concluded that there was less to the story than Tisdall claimed.

The two sources for the unification claim were: 1) a Chinese diplomatic in Kazahkstan talking about fuzzy long-term hopes at a convivial dinner with the US ambassador and, 2) a self-serving monologue by South Korea's vice foreign minister.

Indeed, there are two significant North Asian takeaways from the WikiLeaks cables.

First, South Korean government officials are indefatigably, crudely and rather transparently "working the refs" - selectively packaging and vociferously pushing their arguments - to persuade the United States to abandon mediation through the People's Republic of China (PRC) and/or negotiation with North Korea and instead put South Korea and its reunification agenda in the diplomatic driver's seat.

Second, the United States has enough information to view the South Korean representations critically and, probably, skeptically.
For observers interested in the true state of play in North Korea, two cables (reference numbers are per WikiLeaks) prepared by the political officer of the US consulate in Shenyang go beyond the hype and rhetoric to present a valuable picture of what's actually going on in North Korea, also known as the Democratic People's Republic of Korea (DPRK).

"A major player in PRC-DPRK economic exchanges" told US officials in December 2009 that the botched DPRK currency reform should be viewed in part as a political struggle between factions favoring a Chinese-style economic opening and a more tightly controlled "Vietnamese style" economy.

He correctly identified Kim Jung-eun as Kim Jung-il's probable successor, and identified him as part of the "pro-control" group.
Controlling inflation, leveling the wealth gap, controlling domestic currency and access to foreign currency, are all part of this strategy. XXXXXXXXXXXX [name blanked out in cable] believes that the third son, Kim Jong-eun, favored the currency revaluation, and that going forward Kim Jong-eun leans toward a Vietnamese-style of economic reform.

Opposition to the currency exchange, according to XXXXXXXXXXXX, might reveal who opposes the ascension of Kim Jong-eun to leadership. According to XXXXXXXXXXXX, Kim Jong-il's support of the currency reform points to his favoring the third son; those opposing the revaluation, also oppose the third son. XXXXXXXXXXXX drew parallels to the 2009 nuclear tests, which he said were also influenced by succession plans. XXXXXXXXXXXX said that the first son, Kim Jong-nam, opposes his younger brother's reform plans and favors a Chinese-style of economic opening. (10SHENYANG4)
As to the impact of the currency reform, the consulate's source noted that it was a cock-up that had affected North Korean views of their government, but not necessarily the existential, regime-toppling disaster described by Western commentators.

Not a crisis yet but close
XXXXXXXXXXXX does not believe the DPRK is in crisis mode at this time. As he said, the people are used to this sort of thing. He saw the currency reform as being part of a broader conflict within the government as it moves forward in the next several years. Since 2002, the DPRK has allowed some economic reform, without expressing strong support or opposition. As he put it, the government has been waiting and watching to see what would happen.
Not to say it's all beer and skittles in Pyongyang.

Kim Jung-il is becoming paranoid and indecisive as he is beset by factions and anxieties in his old age, princelings game the system to monopolize business opportunities, and the economy isn't doing too well.

In a later cable, perhaps based on the same set of discussions, a Chinese observer says:
XXXXXXXXXXXX has seen a number of similarities between the DPRK and China since his first visit in 1998. He compared the impact of the famine on North Koreans to the impact the Great Leap Forward (GLF) had on Chinese in the countryside. Both incidents forced individuals to lose faith in the government's ability to provide a basic standard of living and created a sharp instinct for self-preservation. He also sees similarities between the GLF and current plans in the DPRK to become a strong country by 2012. (10SHENYANG5)
The other takeaway from these two cables is the extensive economic penetration of China into the North Korean economy - a state of affairs that probably gives the business-minded president of South Korea, Lee Myung-bak, some anxious nights as he wonders if his hardline policy of ostracizing the North diplomatically and economically is merely driving the North, its opportunities, and its wealth into the eager arms of the Chinese.
Admitting he is unsure of the exact value of Chinese investment into North Korea, XXXXXXXXXXXX believes the number to be many billions of renminbi. Chinese companies, like their ROK counterparts, use North Korea as a processing zone, primarily in the mining and seafood industries.

In order to encourage Chinese investment, the DPRK is offering Chinese investors mining and ocean rights for their injection of cash into the project. A former Consul General of the North Korean consulate in Shenyang, recently spent two weeks in Beijing attracting about RMB 12 billion for this project and planned to come to Shenyang following his time in Beijing.

Construction of the bridge from Dandong to Sinuiju, seems set to begin in 2010 ... China paying for both the bridge and a road on the DPRK side.

North Korea also plans to increase electricity generation capacity by building coal-fired power plants and hydropower plants, and to increase transmission capacity by extending grids to all secondary cities. Chinese electric companies are currently bidding on the grid projects.
Chinese exploitation of North Korea's resources is not particularly appreciated by the North Koreans.

In fact, the Chinese are not particularly appreciated by North Koreans, it seems:
XXXXXXXXXXXX said many in the DPRK believe the Chinese do not understand their country. While neither the Chinese nor the DPRK are likely to criticize the other in public, XXXXXXXXXXXX said that in private the DPRK has disparaged the Chinese for not including North Korea on its list of 147 tourist destinations or 137 investment destinations. These omissions and the disparate Chinese actions on regional development projects clearly indicate that North Korea is not a priority for the Chinese. For instance, while China recently elevated the long-beleaguered Changchun-Jilin-Tumen River development plan to a national level project, the DPRK left the Tumen River Development Plan, as it sees no benefit (REFTEL). Relations between the two countries were getting so bad, in fact, Premier Wen Jiabao visited Pyongyang two months ahead of schedule.

XXXXXXXXXXXX said Chinese state-owned enterprises have placed restrictions on investing in North Korea but that a number of privatized Chinese companies in which the state remains a significant shareholder have invested in the DPRK. Disputes with North Korean counterparts develop all the time, XXXXXXXXXXXX noted. Saying: "It was hard to say" how such disputes are resolved, XXXXXXXXXXXX gave the impression they are seldom, if ever, resolved.
The consulate source offered an interesting and embarrassing piece of tittle-tattle concerning Wen Jiabao that also points out that one of North Korea's most important copper mines is passing into Chinese hands:
According to XXXXXXXXXXXX, for example, two Chinese companies - Shandong Guoda Gold Company, Ltd and Zhejiang-based Wanxiang Group - are battling for access to Huishan Copper Mine, the biggest copper mine in the DPRK. Huishan, near the DPRK-China border is rich in gold, silver, and other valuable metals as well. Though MOFCOM approved both joint-venture deals, each company wants to be the sole developer. XXXXXXXXXXXX believes Wanxiang, which has close ties to Premier Wen Jiabao, will likely win out, Shandong Guoda receiving a payment to quietly go away. Without naming names, XXXXXXXXXXXX also suggested the strong possibility that someone had made a payment (on the order of USD 10,000) to secure the Premier's support.
The picture one extracts from these cables is of North Korea lumbering along with a mismanaged economy, but an economy that is becoming haltingly integrated with China's market-driven behemoth and not just a North Asian charity case.

As a Chinese government official told Deputy Secretary of State James Steinberg in 2009:
XXXXXXXXXXXX told the Charge that he kept abreast of Western media reports about North Korea. XXXXXXXXXXXX cautioned that U.S. experts should not assume North Korea would implode after Kim Jong-il's death. He said that PRC analysts concluded that the regime would still function normally and discounted strongly any suggestion that the system would collapse once Kim Jong-il disappeared. 09BEIJING2963
The flip side of North Korea's ambivalent relationship with the Chinese is its pathetic and seemingly futile desire to establish relations with the United States - a fact that the Western media, which apparently feels the need for at least one terrifying, inhuman bogeyman bent on the total destruction of the planet, seems determined to ignore.

But it is a fact, amply documented in the few cables released so far, as North Korea tries to make use of the limited diplomatic venues open to it - for instance, Mongolia.

An August 2009 cable noted that North Korea had spent most of its annual get-together in Ulaan Baataar talking about the United States instead of Mongolia.

As the summary put it:
Key themes on the part of the DPRK were the lack of criticism of the United States, indications that the DPRK is seeking bilateral talks with the USG on normalization of relations, that the recent travel of former President Clinton to Pyongyang has greatly improved the prospects for such talks, that Mongolia would be an appropriate venue for these talks, and that the Six Party Talks are no longer an option. 09CHISINAU694
Getting to the meat of the matter, the cable reported:
The DPRK side said what is most important is for the United States and the DPRK to come up with a "common language," a "non-aggression agreement," and establishment of diplomatic relations. Kim stated if the sides can take such measures, then denuclearization will be possible and easy, and that relations with Japan and the ROK will normalize thereafter.

Regarding former President [Bill] Clinton's recent travel to the DPRK to secure of the release of the two journalists, Kim said this action had been prepared for a long time, meaning the groundwork for such a visit was already in place because of the progress the United States and the DPRK made during the Clinton presidency. Kim said forward motion stopped during the Bush Administration but was now able to proceed because of President Clinton's recent involvement in a personal capacity, because President [Barack] Obama is of the same party, and because former First Lady Clinton is now the Secretary of State. The North Koreans were expecting a dialogue with the United States to start soon as an extension of President Clinton's visit.

Kim asked the Mongolians to support a US-DPRK dialogue (Sukhee described Kim as "enthusiastic" at this point), and he stated "there are no eternal enemies in this world".

Continued 1 2  

China to dump North Korea, really?
(Dec 1, '10)

The man who knows too much

2. Nuclear chill to descend in Geneva

3. US sails with Japan to flashpoint channel

4. The naked emperor

5. Pakistan stares into a valley of death

6. Capitalism: Getting it right

7. Beware false witnesses in Lebanon

8. Feng Shui masters milking Hong Kong

9. Leaks strengthen Netanyahu’s hand

10. China to dump North Korea, really?

(24 hours to 11:59pm ET, Dec 2, 2010)


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