Foreign Policy Essay

The Foreign Policy Essay: China’s North Korean Challenge

By Andrew Scobell, Mark Cozad
Sunday, March 29, 2015, 10:00 AM

Editor’s Note: North Korea has long been a thorny problem for the United States as an erratic nuclear power that threatens America’s regional allies. Yet the problem may be even bigger for China, which has long propped up the North Korean regime but must live with its destabilizing behavior. Andrew Scobell and Mark Cozad of RAND describe China’s diplomatic, economic, and military entanglement with North Korea and contend that despite the many problems, inertia is likely to keep China on its current course.

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The Democratic People’s Republic of Korea (DPRK) has proved to be a near-constant headache for the People’s Republic of China (PRC) since the early 1990s. Unlike relations across the Taiwan Strait with Taipei, which have improved appreciably since 2008, and relations with Washington and Tokyo, which has its ups and downs but remains cordial if not exactly friendly, Beijing’s Pyongyang problem has not abated and appears to be chronic. China’s unruly neighbor has conducted a series of nuclear tests and missile launches. Pyongyang’s provocations have come in swift succession: two incidents in 2010—the torpedoing of a Republic of Korea naval vessel and the shelling of an island near the demilitarized zone (DMZ), which killed a total of 48 South Korean military personnel and two civilians—and subsequent moves, including a declaration that Pyongyang would no longer abide by the 1953 armistice agreement and severing its hotline to Seoul; blocking South Korean access to Kaesong Industrial Zone; and executing Pyongyang’s key interlocutor with Beijing in the course of a political purge. For the PRC, there has been no respite where the DPRK is concerned.

andrew scobell, S0845North Korea besmirches China’s prestige and threatens its national security. Beijing has been accused of consorting with unsavory regimes around the world. For example, in the lead-up to the 2008 Olympics, China found itself tarred as the bad guy in a humanitarian tragedy in Darfur because of Beijing’s association with a Khartoum regime accused of perpetrating atrocities. China craves the reputation of a responsible global citizen and a force for good in the world. However, Pyongyang is not akin to Khartoum in Beijing’s eyes. After all, North Korea is not some far-off Third World state like Sudan. Rather, it is a radioactive Darfur on China’s doorstep—a humanitarian disaster that is the subject of enormous international attention, led by a repressive dictator armed with ballistic missiles and weapons of mass destruction. Instability immediately across the Yalu River directly threatens domestic stability in China’s heartland, if only because of the specter of many hundreds of thousands of refugees flooding into Northeast China. As a result, Beijing is ultra-sensitive to any hint of turmoil on the Korean Peninsula.

Under paramount leader Xi Jinping, China has—at least in official rhetoric—prioritized “denuclearization” above “peace and stability.” While Beijing is undoubtedly sincere about desiring a non-nuclear Korean Peninsula, the reality is that denuclearization is a much lower priority than maintaining peace and stability on China’s doorstep. Foreign Minister Wang Yi underscored these priorities in early 2014 when he said that Korea was China’s “doorway” and no one should foment instability there.

Why China Doesn’t Confront North Korea

Mark CozadBeijing is extremely risk averse, and alarm over the prospect of instability across the Yalu River is paramount in the minds of China’s senior leaders. They are afraid that if China gets too tough on North Korea it will only exacerbate matters—Pyongyang will pull away, Beijing will lose what little influence it has, and/or Pyongyang will escalate its provocations. While China is not happy with the current situation, maintaining the fragile status quo is preferable to the uncertainty of change, which from Beijing’s alarmist perspective increases the potential for instability. Although Beijing was not enthusiastic about dynastic succession following the December 2011 death of North Korean dictator Kim Jong Il, China accepted it believing it would provide some semblance of continuity and hence would be conducive to stability both in Pyongyang and in bilateral relations. But this assumption was called into question two years later, when Kim Jong Un executed his elderly uncle who had been North Korea’s lead interlocutor with the Chinese.

Bolstering the Buffer

The public discourse that has arisen in China in recent years urging Beijing to abandon its most truculent and troublesome neighbor appears to be the manifestation of more relaxed censorship rather than any indicator of policy change. On the contrary, Chinese leaders believe that they have no choice but to redouble their efforts of the past decade or so to bolster China’s DPRK buffer. Following the 2002-2003 Korean nuclear crisis, China decided that North Korea could not be allowed to fail. Beijing desires a neutral or pro-China buffer south of the Yalu River between it and South Korea—a U.S. ally with American military forces stationed within its borders. As such, Beijing has decided to go big and go strong in an all-embracing approach toward Pyongyang to strengthen the regime on its doorstep. This initiative includes diplomatic, economic, and military dimensions.

Diplomacy.  During the past ten years, Beijing’s diplomatic support to North Korea has come in two varieties. First, the PRC has not publicly condemned the DPRK (although there have been some mild tongue lashings) and has watered down or opposed United Nations Security Council resolutions on North Korea. For example, in December 2014, China—and Russia—were the only UNSC members to oppose including consideration of human rights in North Korea on the council’s agenda.

Second, China has established a multilateral forum with six participants—North Korea, South Korea, China, Russia, Japan, and the United States—to manage the North Korean nuclear issue. In 2003, China launched the Six Party Talks and since then has toiled doggedly to keep them alive. While the talks have been on hiatus since 2007, Beijing has worked tirelessly to resuscitate the dormant multilateral forum and prevent it from collapsing completely.

China has a strong affinity to these talks because Beijing created, nurtured, and hosted these talks for four years (2003-2007) and the forum proved a useful management mechanism for dealing not just with North Korea but also with the United States. In May 2013, senior North Korean leader Vice Marshal Choe Ryong Hae visited Beijing in what appeared to be an effort to improve China-North Korea relations and a signal of Pyongyang’s readiness to curb its bad behavior. The following month, DPRK Vice Foreign Minister Kim Gye Guan—Pyongyang’s point man on the Six Party Talks—traveled to Beijing, apparently to signal North Korea’s willingness to reengage in the multilateral forum. A Chinese initiative to restart the Six Party Talks was clearly underway with a visit by PRC Vice President Li Yuanchao to Pyongyang in July 2013 and a follow-up trip by Vice Foreign Minister Wu Dawei—Beijing’s point man on the Six Party Talks—to the DPRK in August 2013. Though success has proved elusive, the quest continues.

Economics.  In the early 2000s, China launched a comprehensive effort to bolster North Korea’s economic fundamentals. Repeated attempts to convince the late Kim Jong Il of the benefits to Pyongyang of implementing a “reform and opening” policy during his seven visits to China (between May 2000 and May 2011) came to naught. Nevertheless, Beijing has made a concerted effort to get North Korea’s economy off life support and to revitalize a range of economic sectors through a substantial injection of trade, aid, and investment.

China has been North Korea’s top trading partner since the collapse of the Soviet Union. The Soviet demise ended the significant subsidies from Moscow and triggered a systemic crisis and economic tailspin in North Korea. China’s proportion of North Korea’s total trade rose to one-third by 2003 and climbed even higher thereafter. Today, China accounts for well over half of North Korea’s international trade. In both decades North Korea has run a huge trade deficit, and Chinese exports to North Korea have risen at a more rapid rate than North Korea’s exports to China. Most of North Korea’s exports have been resources such as minerals and marine life.

Since the early 2000s, Chinese firms—mainly from neighboring Jilin and Liaoning provinces—have invested in North Korean infrastructure, agriculture, mining, and retail sectors. Many of these investments have been encouraged and insured by Chinese provincial and national authorities. This represents a significant shift from China’s previous focus on solely providing economic assistance. Beijing recognized that Pyongyang will almost certainly never repay loans and that outright aid offers limited leverage and negligible return. Investing in North Korea allows China to benefit from economic opportunities—albeit risky ones. Between 2003 and 2009, Chinese companies reportedly invested a total of US$98.3 million in North Korea.

This is much less than Chinese entrepreneurs invest in other countries on China’s periphery, such as Mongolia and Myanmar, but it still makes China the second-largest investor in North Korea. South Korea is the top investor, but these funds are exclusively invested in the troubled Kaesong Industrial Complex. In contrast, investments by Chinese companies are spread across North Korea in a range of sectors, albeit mostly in the extractive (41%) and light industry (38%) sectors, according to one study.

Beijing has also provided hundreds of millions of dollars in foreign aid, much of it in the form of food grains and petroleum. The size of these shipments increased considerably in 2003, 2004, and 2005, according to available estimates. According to the same source, this aid is reportedly the largest amount China disseminates to any country in the world and is allocated at the highest echelons in Beijing, rather than through the normal channels for dispersing development aid in the Ministry of Commerce.

Military.  China has not disowned or distanced itself from North Korea in the security sphere. Beijing’s only formal military alliance is with Pyongyang: the “Treaty of Friendship, Co-operation and Mutual Assistance between the People’s Republic of China and the Democratic People’s Republic of Korea” was signed in July 1961. The document commits one country to come to the aid of the other if attacked. However, there does not appear to be any real defense-coordination mechanism, nor do the terms of the treaty ever seem to have been invoked. While Chinese leaders have on multiple occasions stated publicly and privately that Pyongyang cannot assume that Beijing will come to the rescue, the treaty provides the justification for an intervention should Chinese leaders consider such a step to be necessary. Thus, the security relationship is perhaps best viewed as a “virtual alliance,” with considerable ambiguity as to if and when it might be invoked by Beijing. In mid-2014, for example, a PRC Foreign Ministry official stated: “There is no military alliance between China and North Korea.”

The alliance may be a virtual one, but this does not mean that Beijing does not take it seriously or that the Chinese military (the People’s Liberation Army, or PLA) doesn’t see it as real. For Chinese civilian and military leaders, this alliance remains relevant and personal. The alliance was sealed in blood during the early 1950s when the so-called Chinese People’s Volunteers fought side by side with the Korean People’s Army. Hundreds of thousands of Chinese soldiers gave their lives in the conflict, and Chinese troops remained in North Korea until 1958.

The fact that despite the sacrifice of blood and treasure by Beijing many decades ago, Pyongyang continues to absorb China’s attention, consume Chinese resources, and remain a focal point for PLA contingency planning—including the prospect of a second military intervention—is galling to China’s leaders. But all this pushes Beijing to redouble its efforts. Indeed, it is clear that the PLA is increasingly concerned about the prospect of instability on China’s periphery and on the Korean Peninsula in particular.

By All Necessary Means

China’s North Korea policy seems to suffer from inertia and fear of upsetting the fragile status quo. The enduring goal is to defend Beijing’s vital interests by all necessary means. These interests include preventing domestic insecurity and maintaining a stable buffer state at the gateway to China’s political and economic heartland. Future Pyongyang provocations are unlikely to change Beijing’s buffer strategy. China seems prepared to bolster the North Korean buffer at all costs using every instrument at its disposal—political (tacitly supporting hereditary succession), diplomatic (refusing to condemn the North publicly for its intransigence or transgressions and pursuing the Six Party Talks), economic (aid, trade, and investment), and, if necessary, military (including limited or wholesale intervention to prop up the regime).

Indeed, all indications are that the PLA has been actively planning for a variety of Korean contingencies. While China’s armed forces are fully prepared to execute if so ordered, no one in Beijing is eager to send Chinese forces across the Yalu River for the second time in 60 years. Unlike in 1950, today Beijing has a sizeable tool kit of non-military options at its disposal where Pyongyang is concerned. Chinese leaders would much prefer to manage the problem diplomatically and economically. But this does not mean that Beijing would hesitate to act militarily if China’s vital national security interests were determined to be on the line across the Yalu River.

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Andrew Scobell is a senior political scientist at the RAND Corporation. Mark Cozad is a senior defense research analyst at RAND. This piece is drawn from the authors’ recent article, “China’s North Korea Policy: Rethink or Recharge?” in Parameters: The U.S. Army War College Quarterly.