September 21st, 2017
By Davis Florick – Senior Fellow
For a quarter century, the United States has sought China’s assistance in bringing North Korea into line with international norms on nuclear proliferation, economic practices, human rights, and other issues. Unfortunately, although Beijing has made efforts to alter Pyongyang’s policies, the Kim family has resisted adopting the ambitious reforms and policy adjustments that the US and even China prefer. North Korea’s recalcitrance is likely sourced from its senior leadership’s suspicions that the desired reforms would expose the population to the failings of the regime and lead to a change in government. In order to motivate a policy shift, China would likely need to press severe economic restrictions, leading to considerable suffering in North Korea. In return, China would expose itself to the potential for large numbers of North Korean refugees attempting to enter the country. Despite being relatively robust, the latest round of Chinese-endorsed UN sanctions passed against the Kim regime fall short of what is necessary to provoke behavioral change. Even if Beijing were willing to undertake the challenge, Moscow might be able to sustain the regime in Pyongyang, thus eroding any leverage China and the US and its allies could enjoy. Therefore, Washington and its regional partners would benefit from applying direct economic pressure on Pyongyang while also working with other state actors to reduce the Kim regime’s financial opportunities abroad.
Despite North Korea’s clear reliance on China, Pyongyang has often antagonized its last patron. For instance, North Korea lashed out against Beijing over the latter’s improving relationship with Seoul, and the 1994-8 famine can be attributed, in part, to North Korea’s poor relationship with China. However, since the end of the Cold War, the US, Japan, and South Korea have believed Beijing has had the greatest influence in Pyongyang. Starting with the 1994 Agreed Framework negotiations, Washington, Tokyo, and Seoul have consistently leaned on Beijing to guide the Kim regime. Regrettably, having confronted emerging refugee problems and illicit activities along the China-Korea border in the 1990’s, Chinese regimes have avoided placing decisive pressure on North Korea. Rather, Beijing has provided subsistence level aid. China has also tried to use mutually-beneficial opportunities, when possible, to reinvigorate its own economy in its industrial northeast. The Xi Administration would face substantial drawbacks if it pushed Kim Jong-un too far.
There are two sides to China-North Korea relations, and Pyongyang’s perspective is rarely portrayed accurately by outsiders. For millennia, Chinese and Koreans have been wary neighbors with the Chinese treating Korea as a vassal from which to collect tribute. Periodically China has been entangled in conflicts on the Peninsula. In every instance, the Koreans have come to see the Chinese as occupiers to be driven out. Particularly after the Korean War, although hundreds of thousands of Chinese died to save the Kim regime, and hundreds of thousands more helped rebuild North Korea afterward, Pyongyang gradually removed their role from the conflict’s history as taught to the people of the DPRK. In the years following the Armistice, Kim Il-sung purged Koreans with links to China and demonized Beijing via domestic propaganda. As North Korea’s economy has fallen into disarray while China’s has quickly risen, anti-Chinese propaganda has become necessary to tarnish Beijing’s success. Many North Koreans view China with a mixture of suspicion and envy.
Even if Beijing and Pyongyang were the best of partners, the Kim regime’s oppression and atrocious governance does not allow a true reform agenda. Three generations of the Kim family have persecuted their own people to retain power. In the mid-twentieth century, northern Korea was one of the most prosperous and industrialized regions in East Asia. However, after seven decades of Stalinism and other ill-fated policies, the Kim regime has utterly ruined the North Korean economy. To make matters worse, at the same time as North Korea’s economy has failed, China and South Korea have experienced tremendous growth. To maintain its power, Pyongyang has had to rely on its ability to maintain a closed society to prevent its people from comprehending the depths of the Kim family’s poor governance. Reform measures or any other package of incentives, short of directly providing aid to the Kim regime, would likely increase North Korea’s transparency and make it harder for the government to retain control. At its extreme, a loss of control could lead to domestic resistance, regime collapse, and retribution killings. Given how the Kim regime has treated its opponents, it would seem logical that it might expect to receive the same treatment in return. Under such conditions, Pyongyang may be unable to alter its policies or reach a negotiated settlement.
Recognizing the limitations of China’s ability to direct North Korean policies, considering Russia’s role in this issue is important. Although Moscow’s economic support for Pyongyang was interrupted by the collapse of the Soviet Union, its defense engagement never really ended. In 1992, the Makeyev Design Bureau, likely with the approval of the Russian Security Ministry, provided substantial assistance to Pyongyang as it developed the Musudan (a medium range ballistic missile). However, Moscow’s assistance is not limited to ballistic missile technology. During the late 1990’s, it likely provided North Korea with the kh-35, a coastal defense cruise missile. More recent cooperation has expanded beyond defense to economic interests. In particular, Russia has come to rely on North Korean slave labor to overcome its own labor inefficiencies in the Russian Far East. Part of a network of approximately forty states employing over 60,000 North Koreans, these people are expected to work extremely long hours, with little time off, for years without leave and with their families under strict supervision in North Korea. Moscow relies on Pyongyang for labor because it fears Chinese migrants would be harder to control and might create political problems later. Even if China reduces its support for North Korea, Russia has incentives to fill any potential gap.
To overcome the inherent challenges in dealing with Pyongyang requires a comprehensive plan from Washington, Tokyo, and Seoul intended to further stress the North Korean economy. In 2013, Kim Jong-un announced the byungjin policy to emphasize the parallel focus on nuclear weapons and economic development. Rather than devoting twenty-five percent of the state’s gross domestic product to the military, he intended on cutting defense costs by developing nuclear weapons, thereby reducing the need for conventional forces. By investing in a range of deterrence-by-denial capabilities, including conventional prompt strike and missile defense assets, the US and its allies can deny North Korea the opportunity to cut defense spending. Consequently, Pyongyang will not have the money from defense cuts to invest in the economy. The US, Japan, and South Korea could then explore other options to make it harder for North Koreans to do business abroad and even funnel North Korean won into the Hermit Kingdom. By increasing the money supply, Pyongyang would be faced with rising inflation rates and follow-on economic distortions. Consequently, a range of options exist to hinder North Korea’s economic development.
Particularly important is the need to pressure North Korea’s foreign supporters. Chinese and Russian companies remain the most notable backers of the Kim regime. Although Beijing is unlikely to take strong action against these firms, Washington may be able to pursue quiet means of making financial transactions difficult. For instance, curtailing third party work with Chinese companies in question may be an option. This would allow China to minimize its culpability. Unfortunately, Moscow is even less likely to take a strong position on its economic engagements with North Korea. As a result, the same practices should be explored with Russia while other means to isolate Moscow may be necessary. Particularly on the issue of North Korean slave laborers, the latest United Nations Security Council sanctions attempt to cap and then prevent more workers being sent abroad. However, enforcement mechanisms are problematic. By attempting to multilaterally sanction those that use North Korean slave labor, the US, Japan, and South Korea may be in a better position to forcibly change state actor policies on this issue. There remain opportunities to forestall foreign interactions with North Korea, but success requires a more determined and penetrating effort.
The US, Japan, and South Korea, as well as China, would greatly benefit from Washington, Tokyo, and Seoul taking a more direct approach to constraining Pyongyang. Such a strategy would lessen the dependency the first three have on Beijing. China, and those governments would be in a better position to pursue policies that could adversely impact Pyongyang. Specifically, by reducing the overtness in Beijing’s role, domestic and foreign pressure and attention on the Xi Administration can be relieved. Thus, rather than being seen as relenting to US demands, China can discreetly pursue policies that restrict or sever North Korea’s most disconcerting actions. As a result, Washington, Tokyo, and Seoul can more directly work to challenge Pyongyang’s recent economic success, albeit limited, while receiving indirect assistance from Beijing. Once Kim Jong-un has been sufficiently thwarted in his goals and is willing to negotiate on terms favourable to the US, Japan, South Korea, and even China, then the Xi Administration will have the option to have a more prominent role. Only by relying less on Beijing can Washington, Tokyo, and Seoul hope to make long term progress on forcing policy changes in Pyongyang.