Not long after the Singapore meeting, the secret talks continued in Beijing, but these did not close the deal, either. By then, Lee Myung-bak had decided he did not really want a summit, at least not yet. He especially did not want to be seen as following in the footsteps of Roh Moo-hyun or Kim Dae Jung. By contrast, whether through self-delusion or misreading signals, the North Koreans apparently still thought they were close to a deal. Word was already swirling around the South Korean press about the “possibility of a summit,” and after first denying everything the Blue House admitted there had been contacts, but nothing else.
In November lower-level representatives of the two sides met in the border town of Kaesong. The South Koreans indicated there was a considerable gap and much left to settle before there could be a summit. Not least, the South Koreans now said they wanted the summit to be held in the South, not in Pyongyang. The North Koreans were outraged at what they saw as a reversal in Seoul’s approach to the idea of a summit. A few days later, during a break in the talks, South Korean naval vessels attacked a North Korean patrol boat that had crossed the Northern Limit Line in the West Sea. The South Korean guns poured fire into the North Korean ship, which retreated badly damaged, likely with serious casualties. The South Korean warships were virtually unscathed. It was the sort of victory—near total and annihilating—the South Korean navy loved, but ROK officials were cautious about what had happened. The normal public accusations about North Korean “aggressive behavior” were tempered by speculation that the northern ship had crossed the line by mistake. For its part, Pyongyang appeared particularly incensed by the incident, accusing the South Korean ships of firing “thousands of bullets” aimed at not simply warning the smaller North Korean patrol ship but destroying it. Neither event by itself, the clash in the West Sea or the breakdown in the talks, might have been enough to tip the scales in Pyongyang, but the two together appear to have combined to convince Kim Jong Il that it was time to teach the Blue House a lesson.
The “lesson” was delivered on the night of March 26, 2010, when the Cheonan, a South Korean naval corvette on routine patrol, was blown in half and sank within minutes, with the loss of forty-six sailors. The aftermath was badly handled by the South Korean military, logs were altered to show defense officials were somewhere other than they actually were, and details of the event in reports were changed or inaccurate. The mood of the South Korean public was shock and sadness mixed with considerable skepticism about the government’s handling of the affair. The US Embassy suggested that the ROK government organize an international group to review the evidence. After investigation, the five-country team released a report concluding that strong circumstantial evidence, including a torpedo motor recovered from the waters around the explosion, indicated that the sinking had been caused by the shock wave and so-called bubble effect resulting from a North Korean torpedo that had exploded directly beneath the Cheonan’s hull. Even the presentation of these findings was bobbled, however, when the wrong picture of a North Korean torpedo was displayed at the public briefing.
After the findings were released, a Russian naval delegation went to Seoul to review the records, but did not publicize its own conclusions. The Chinese, who did not take part in the review, generally took the position that there was not enough evidence to say what had happened, though some in Beijing thought it more than likely that the North had been responsible. Critics of the findings argued that for the North to explode a torpedo so expertly under the South Korean vessel would take inordinate skill or luck beyond measure. Not surprisingly, the North Koreans denied any part in the incident, though their denials were not especially convincing. Their protestations were not helped when, shortly afterward, Kim Jong Il insouciantly reviewed a unit of the KPA Reconnaissance Bureau, which in all likelihood was the organizational element that would have carried out the sort of operation that sank the Cheonan.
Throughout the remainder of the Lee administration, there was a series of secret North-South talks, but never anything with enough commitment or vision from either side to begin and sustain a serious process of engagement. On Seoul’s part, there was often a feeling that the North was near the end of its rope, that Kim Jong Il was in decline, and that the resulting political succession would be more than the North Korean system could handle. It was, in essence, a waiting game, keeping the North occupied with one hand, while squeezing it with the other. Once again, waiting for the end of North Korea proved not to be a good strategy. Once again, as secret North-South talks went on, Washington did not know what its ROK ally was doing, what the contacts between the North and South meant, or where they were leading. When they asked for clarification, the Americans received routine assurances that they would be kept fully informed when and if any developments occurred.
THE RISE OF CHINESE INFLUENCE
When Chinese premier Wen Jiabao’s airplane landed under the high blue autumn sky at Pyongyang’s airport on October 4, 2009, there was an unusually important guest on hand to meet him. Workers Party General Secretary, Chairman of the National Defense Commission, and Supreme Commander of the Korean People’s Army Kim Jong Il did not normally come out to the airport to meet people below his station.* He did for Wen, and as the premier’s special Air China 747 taxied to a stop in front of the terminal, Kim was at the bottom of the stairs, waiting to give the Chinese guest a welcoming hug.
On August 17, about two months before he landed in North Korea, Premier Wen had chaired a meeting of the PRC State Council Leading Group for Revitalizing the Northeast Region and Other Old Industrial Bases. The meeting passed an “implementing strategy” for development of the country’s rust belt—the northeastern region that had formerly contained many of the nation’s important heavy industry factories but was now, in the country’s improved economic circumstances, lagging far behind. Among the many recommendations was to “raise the level of opening up the Northeast Region to the outside world, organize the proper implementation of the ‘Liaoning Coastal Economic Belt Development Program,’ and firmly seize the formulation of the Tumen River Regional Development and Opening Up Program.”
For provincial and local officials in China, the high-level attention signaled by this State Council group with the overly long name meant they might finally find support (and, equally important, funds) for plans they had been dreaming about for many years to bring economic development to their region. A key part of the plans for Jilin Province was access to the North Korean port of Rajin. Provincial officials had long complained that the Chinese port of Dalian in neighboring Liaoning Province was always backed up and that Jilin could not get goods to market or raw materials delivered in a timely fashion through that route. Rajin, however, was another story. It was nearby (only about twenty-five miles as the crow flies from the nearest bridge across the Tumen River), it faced the Sea of Japan and the Pacific, and—to put it mildly—it was underutilized. That the port was in North Korea presented challenges, and opportunities, of its own.
Before Wen finished his visit to North Korea, he and his delegation had signed a number of agreements aimed at facilitating economic activity between China and North Korea. Among the deals was one to build a new bridge across the Yalu River downstream from the present smaller bridge between Dandong on the Chinese side of the river and Sinuiju on the North Korean side. The older bridge had one rail line and a single lane for automobile traffic. It served well enough for the relatively small volumes of trade the region had grown accustomed to, but the flow was expanding and plans were for it to grow even more. If there were to be significant increases in the amount of goods and numbers of people going between the two countries, the existing bridge would be a choke point. The new bridge would be larger, stronger, and positioned to fit into a still-notional transportation network designed with an eye to even more ambitious plans—eventually to move people and cargo all the way from South Korea into China, and possibly beyond.
For nearly a decade, PRC-DPRK relations had been caught in the backlash of Nor
th Korean anger at China’s great betrayal—the recognition of the ROK in August 1992. In the latter half of the 1990s, the North was focused on improving relations with the United States, at China’s expense if possible. In a particularly rough incident, in 1997, for example, North Korea reached a deal with Taiwan to store the country’s nuclear waste. Pyongyang had partially wanted the fee for the service—well over $100 million—but also, during a low point in North Korea-PRC relations, it no doubt wanted to twist the tiger’s tail. For reasons of its own, Washington worked on Taipei to stop the deal from going forward, but that was nothing compared to the pressure Beijing put on Pyongyang not to consummate such a major tie-up with Taiwan. Eventually, Taipei “discovered” a problem with the necessary permits, and the deal fell apart.
Kim Jong Il’s visit to China in May 2000 had signaled that Sino–North Korean relations were at least back to normal. After that the frequency and level of visits began building again, as did Chinese business activity. By 2009 the two sides had already signed new agreements to facilitate increasing numbers of Chinese tourists arriving by air, rail, and even automobile, and North Korean delegations—educational, economic, and artistic—regularly moved back and forth across the border. On the Chinese side of the rivers separating the two countries, local officials drew up plans for strengthening transportation links, reinforcing existing bridges, or contemplating new ones. Chinese companies made major investments in large North Korean mines, such as the Musan iron-ore mine and the Hyesan Youth copper mine, both directly across the Tumen River. Already in June 2008, satellite pictures showed scores of Chinese trucks crossing into the North to pick up loads of iron ore from the Musan mine.
Over the several years after Wen’s visit, Chinese economic penetration of North Korea developed to an unusual degree, beyond anything the two sides had ever experienced. In October 2010, a delegation consisting of the party heads of every North Korean province went to Beijing, almost certainly an effort by Kim Jong Il to impress on provincial-level officials that they had to be ready for major interaction with Chinese businesses moving into their areas. In July 2011, groundbreaking ceremonies were held for new joint economic zones with the Chinese on several North Korean islands in the Yalu River, and the North signed new agreements with the Chinese for developing Rajin.
To this extent, Lee Myung-bak’s observations were exactly right: the North was not static, and the outside world was becoming a regular part of the existence of more and more North Koreans. Unwittingly, Lee himself may have encouraged this when he reversed field on inter-Korean cooperation. During the Roh Moo-hyun years, Seoul had encouraged South Korean firms to explore what sort of joint activity might be possible with the North. South Korean companies had looked at mining ventures as well as ways to use cheap, easily trained North Korean labor. The Kaesong Industrial Zone (KIZ), which opened in 2004, was to be only the first of several such areas Seoul hoped to develop in the North.
After the South Koreans pulled back, Chinese saw an opportunity to move aggressively into the North, not to make money so much as to position themselves for a time when they could. North Korea was a frontier, and the rule of law—business or otherwise—was not what dictated winners or losers. Who was there when the situation finally shifted to a more business-friendly environment would, it was hoped, reap the rewards. The situation that existed in North Korea—teetering on the edge or well short of legal guarantees—was not completely unfamiliar to Chinese businessmen, who nevertheless complained of sharp practices on the part of their Korean business partners. The North Koreans, in turn, considered the Chinese totally unscrupulous. North Korean consumers, and there were a growing number of them, complained of Chinese companies unloading shoddy, and in some cases dangerous, goods into the North Korean market. Westerners who brought presents for their North Korean contacts were told not to bring Chinese manufactured items but rather to carry ones from West Europe.
After the long period of frostiness in relations through most of the 1990s, from 2000 to 2011 Kim Jong Il made seven publicized visits to China.* There are a number of good explanations for Kim Jong Il’s willingness—evident beginning in 2009 with Wen Jiabao’s trip—to accept what he had so long worked to avoid, falling under China’s shadow. One explanation is that he had no other potential partner to turn to, though at the time he entertained Wen Jiabao, Kim was also toying with the notion of improving relations with Seoul. A second explanation is that after the Clinton visit in August 2009, Kim realized that the goal of a breakthrough with the United States was unattainable. Finally, and maybe the best explanation, is that as part of the preparations for succession, Kim felt that, as a priority matter, he needed to secure ties with China on both the strategic and the economic fronts.
Kim may also have hoped to capitalize on a downturn in Beijing’s political ties with South Korea. Although China had spectacular success engaging South Korea economically (China has been South Korea’s largest trading partner since 2003), it stumbled badly on the political front in 2004 and again in 2006. South Koreans reacted negatively to Chinese academics’ claims that the ancient Korean state of Koguryo (37 BC until AD mid-seventh century) was a Chinese vassal and not, as the Koreans see it, a brave battling kingdom that extended its domain into what is now Northeast China and for years held off invading Chinese armies. Centuries later, low-level irritation, such as regular scenes of Chinese fishermen caught in South Korean waters violently resisting arrest by the ROK coast guard, have kept popular prejudices against China simmering. There is lingering suspicion, as well, among some South Koreans that in an emergency situation (such as the collapse of North Korea), the Chinese army would move to a preestablished line in North Korea and not go home, either to ensure a rump North Korean state or to provide a buffer between the Sino-Korean border and ROK or US troops that might move north.
RARE BACKLASH
Only a month after Wen’s visit, Kim Jong Il took a major and, as it turned out, nearly disastrous step: he ordered the revaluation of the North Korean currency. This was not the first time Pyongyang had undertaken revaluation, but the four previous episodes that had occurred since the country’s founding had not caused much trouble. This time was different—and it might have been even worse if the regime had not relatively quickly recognized its mistake and pulled back by early 2010 in the face of what many foreign press reports portrayed as serious discontent and even individual protests by North Korean citizens. For Kim, the problem may have appeared especially acute because of loud complaints from a key segment of the population—the emerging consumer class. This sort of widespread, manifestly negative response was unnerving to the regime and may have driven home to Kim and others in the leadership that significant numbers of the people, having survived the famine years of the late 1990s, considered the social contract between the general population and regime broken. When Pyongyang moved to confiscate their savings, which is what the revaluation amounted to, it crossed a line that had not even existed in earlier years.
It is still not known why the regime attempted the revaluation in the first place. One well-accepted theory is that Kim Jong Il simply wanted to crush the markets. The motivations may have been more complicated. Kim could have wanted to make a second try at moving to new economic policies, as he had done in 2002, but was again stymied by a lack of funds. Reforms, even simple ones, would take money, and there was a lot of money sloshing around in the markets, among merchants and budding entrepreneurs. The currency revaluation would transfer the money to the treasury and also be a useful reminder to the emerging middle class that, whatever benefits the new policies might bring, in the end it was the regime that held the reins.
The currency revaluation is usually viewed in isolation, but it may have been part of a larger plan to smooth the way for Kim Jong Un’s succession, which at that point was moving into a new phase. By introducing new elements into the economy, Kim Jong Il may have hoped to provide better economic conditions later in 2010, when he planned to hold a major party c
onclave at which Kim Jong Un would step into public view. Seen in that context, the failure was not only a bad surprise; it risked completely upending the succession planning.
A scapegoat was necessary, and one appeared in the guise of Pak Nam-ki, a longtime party functionary then serving as the chief of the party’s finance department. Pak had regularly accompanied Kim Jong Il in 2009 on the leader’s public inspection visits, but disappeared after appearing with Kim one more time, in early January 2010, as public opposition to the revaluation was growing. He was reportedly executed in March, possibly on the same day that Kim Jong Il, along with a few party veterans who no doubt had known Pak well, traveled to a cooperative farm in North Hwanghae Province. Looking at their faces in the photographs from that visit, one wonders what they were thinking.
In mid-December 2009, just as the effects of the currency reevaluation were taking hold, Kim Jong Il made a rare visit to Rason, on the country’s northeast coast.* Two weeks later, Pyongyang declared Rason a “special city,” conferring upon it an administrative status that would give it more freedom to host foreign business activity. Port facilities were improved, the Chinese paid to improve the road from the crossing point over the Tumen River all the way to the port, and the Russians moved ahead to upgrade the rail line from their own crossing point at Khasan down the east coast to Rajin port. At the same time, Kim and other officials made numerous visits to inspect developments elsewhere on the east coast: tourist facilities, factories, mines, and especially Tanchon, a port some 140 miles south of Rason and designed to handle the output of the North’s rich but still underdeveloped magnesite mines.
The Two Koreas: A Contemporary History Page 67