Tag Archives: South Korea

Beijing’s Pyongyang Puzzle

IT IS UNUSUAL for Beijing to make public what has previously been a private suggestion that the United States stops its annual two-month military exercises with South Korea in exchange for North Korea halting its nuclear and missile programmes.

It is a trade-off that Washington and Seoul have equally publicly rejected, to no one’s very great surprise. But it indicates a growing sense of urgency on Beijing’s part about the situation on the Korean peninsula especially given the policy vacuums in both Washington and Seoul caused by the new Trump administration and the expected imminent impeachment of President Park Geun-hye respectively.

Pyongyang has said that the four missiles it launched earlier this week were a test strike against US bases in Japan. Provocative language. The same day, the first components of the THAAD missile defence system arrived in South Korea — a deployment seen similarly provocatively in Pyongyang but also in Beijing.

Beijing’s denial of reports of retaliatory pressure on South Korean businesses convinces few.

Meanwhile, the shadow of February’s fatal attack on North Korean leader Kim Jong-un’s half-brother, Kim Jong-nam, at Kuala Lumpur airport continues to fall widely. If, as is widely suspected, it was a North Korean hit, and one involving chemical weapons,  then the Trump administration may move to reverse President George W Bush’s 2008 delisting of Pyongyang as a state sponsor of terrorism.

That, in turn, would dash the hopes of the likely next government of South Korea that the Trump administration may be more willing to enter dialogue with North Korea. On the campaign trail, candidate Donald Trump had said he would be prepared to meet Kim Jong-un, though he has not repeated the offer as president.

The next South Korean government, whoever leads it, it likely to return to the ‘sunshine’ policy of greater engagement with North Korea than the current scandal-embroiled one.

Some evidence is now emerging that the Obama administration was quietly taking a harder line against the North than appeared on the the surface, cyberhacking North Korean missile launches last year, with some success, in retaliation for the believed North Korean hacking of Sony Pictures in 2014. 

However, the Trump administration, in the absence of a better shaped policy, has mainly fallen back on browbeating China to do more to rein in its neighbour, a capacity it may not have, or at least to the degree Washington believes. For its part, China, under whose protection Kim Jong-nam had lived in Macau and Beijing, is hopeful that diplomacy can replace stand-off and the unsettling uncertainty that goes with it.

Last month, it suspended coal imports from North Korea until the end of this year, a hefty blow to North Korea’s revenue as it accounts for two-fifths of the country’s export earnings, and the toughest sanctions China has imposed to date. Beijing had previously been using a ‘living-standards’ loophole in the UN sanctions against North Korea to sustain the coal trade despite its formal adherence to them.

That it has now changed its stance on this indicates both the frustration of many Chinese officials at what looks like an increasingly anachronistic ally in Pyongyang and their impotence to do more.

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Trade Drives Shifting Alignments Of Northeast Asia

LET US LOOK at President Xi Jinping’s visit to Seoul and Japan’s embryonic rapprochement with Pyongyang in the hard light of commerce. To this Bystander, it is that more than politics that is reshaping the alignments of the region.

China has been South Korea’s leading trade partner for the past decade. It now accounts for a quarter of South Korea’s trade, and a larger share than that of the U.S. and Japan combined. China-South Korea trade will if anything grow, as a result of a forthcoming free trade agreement between the two countries and a new agreement to make more yuan and won directly convertible.

In raw numbers, China-South Korea trade is more than 40 times greater than China’s trade with North Korea, $247 billion vs. $6.6 billion, even though the latter has trebled since 2007 as Beijing has sought to ease Kim Jong Un’s regime back from the brink of Beijing’s nightmare — an economic collapse of the North triggering a flood of refugees across the border into Jilin and Liaoning provinces.

A new generation of leaders in Beijing views Pyongyang differently than its predecessors. More than half a century on from the end of the Korean War, unwavering support of comrades-in-arms just seems outdated and especially now China, South Korea and Japan have become economic powers in their own right. Beijing wants to distance itself from Pyongyang, though not by so much it allows room for Tokyo and increasingly Moscow to step in. It is telling that Xi’s recent visit to Seoul was his fifth meeting with his strongly pro-U.S. South Korean counterpart Park Geun-hye since becoming president though he has yet to visit Pyongyang.

Japan’s latest promise to ease some minor sanctions against North Korea in return for Pyongyang re-investigating abductions of Japanese nationals by North Koreans in the 1970s and 1980s is a sign of how Tokyo is working the new folds in the regional landscape. Continuing concerns about Pyongyang’s nuclear programme in the unpredictable hands of Kim Jong Un will limit how far Tokyo will want to carry its rapprochement, and Washington won’t let it go too far for the same reason.

The North’s nuclear ambitions remain the elephant in the room for China, too. Xi is unlikely to push Kim as hard on this as Park would like. In Seoul, he avoided any sign of support for Park’s criticism of the programme and stuck to Beijing’s line of calling for the denuclearization of the peninsula.

Nor will the U.S. want relations between one of its two main Asian allies and China to become too cosy. On that front, it will take some comfort in the fact that Park rejected Xi’s proposal of a joint celebration of next year’s 70th anniversary of Korea’s liberation from Japan at the end of World War II. Every leader in the region has a middle against which he or she needs to play two ends. In contrast to the dangerous eddies of northeast Asian geopolitics, the course of commerce runs swiftly and truer.

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North Korea’s Chinese Or Chinese Knock-Off Drones

REPORTS COMING OUT of Seoul about four North Korean drones that crashed in South Korea raise an awkward question for two Chinese companies. How did what appear to be China TranComm’s SKY-09P and MicroFly’s UV10CAM drones, or knock-offs of same,  end up in the employ of the North Korean military?

South Korean intelligence says the unmanned arial vehicles were programmed to fly from the North over South Korean military installations, photograph them, and then return to the North. The North Korea Tech blog, which did the early work of publicly sourcing the drones, has pictures and more detail.

Both drone models are sold commercially, but should not have been sold to North Korea in contravention of international sanctions against Pyongyang. China TranComm, for one, has denied any involvement. South Korean press reports suggest the drones were imported through middle men in Hong Kong, a well trodden trade route, and then remodeled or possibly copied.

These are not sophisticated machines, and there has been speculation that the North Korean military have been making a version of their own since 2010. The three SKY-09Ps or SKY-09P clones, if that is what they were, found in South Korea crashed because of technical malfunctions while the UV10CAM ran out of fuel.

Pyongyang’s drones have sufficient range, when not falling out of the sky, to reach the south of the peninsula. The fear is that they could be used to carry a deadlier payload than a digital camera.

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China’s TV And Film Industries: Unexploited Soft Power

A report crosses this Bystander’s desk from Oxford Economics, a consultancy commissioned to quantify the economic impact of China’s film and TV industries. The commission comes from the Motion Picture Association of America, Hollywood’s lobbying arm, and the China Film Distributors and Exhibitors Association. It is, no doubt, intended as an opportune prod in the direction of more opening of China’s domestic film and TV markets by emphasizing the potential for growth at a time when boosting cultural industries and “going out” is to the forefront 0f Beijing’s mind.

The reports lays out quite how significant, fast-growing, and promising the industry is — as would be expected in a country with a large population, strong economic growth and rising incomes. Oxford Economics tots up for 2011 a 100 billion yuan ($15.5 billion) contribution to GDP, 909,000 jobs and 22 billion yuan in tax revenue from the industry directly.

Taking into account the multiplier effect across the rest of the economy, the report boosts those numbers to a 272 billion yuan contribution to GDP, 4.5 million jobs and 57 billion yuan in tax revenues. That later GDP number is equivalent to 0.6% of total GDP, similar to the contributions of  the computer and telecoms equipment industries. Where the film and TV industries are much different is in their level of exports. Total exports in 2011, Oxford Economics reckons, were 2.3 billion yuan, 90% of which was accounted for by film. The telecoms equipment makers did more than 10 times as much each quarter.

Cultural exports are these days a central part of a country’s soft power — as Hollywood’s bear testament, just as much as do China’s tight quotas on foreign film imports. While the leadership in Beijing is now paying more attention to this aspect of China’s global projection of itself, China has not been able to convert its popular arts and culture into an arm of diplomacy in the way that, say, its neighbour South Korea has. Hallyu,  a mix of popular South Korean films, TV, food and K-pop music culminating in the Gangnam-style phenomenon, has proven to be an extraordinary calling card for the country. South Korea has risen to 11th on Monocle magazine’s annual ranking of soft power, a list on which China doesn’t make the top 20.

It has also made South Korea a destination for cultural tourists, particularly from the rest of the region. What little film and TV tourism there is in China is local and localized. That is a hugely untapped opportunity, the Oxford Economics report suggests, treading safe ground rather than venturing into the deeper waters of exporting cultural values and projecting soft power. In the same vein, it casts the impact of hallyu in the light of domestic tourism within South Korea.

The unsaid part highlights another difference between South Korea and China, whose state-planned cultural exports have focused on traditional high-culture aspects of China’s arts and heritage, as might be expected of programmes devised by government officials and intellectuals. South Korea’s cultural image is very much a reflection of its contemporary and popular culture, which is driven, for better or worse, by a commercial market. China, where even popular TV is sanitized for social correctness, doesn’t have such a readily accessible and identifiable non-political contemporary culture, or the rambunctious marketplace to nurture it.

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China, Japan, South Korea Free Trade Talks Suspended

The maritime sovereignty dispute between China and Japan has derailed discussions about creating a free-trade zone involving the world’s second and third largest economies plus South Korea. Chen Yulu, a People’s Bank of China advisor, broke the news at a meeting of central bankers from the three countries. He said he hoped the suspension of the free trade discussions was temporary. “It will be a big loss for Asia if the process is terminated,” he told the Reuters news agency.  Leaders of the three countries have been discussing creating a free-trade zone for some years, certainly through several cycles of ebbing and flowing relations between Tokyo and Beijing. This Bystander expects the free trade talks to survive this latest nadir.

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Beijing, Tokyo and Seoul Chat Chummily About An FTA

Despite the diplomatic tensions over disputed islands in the East China Sea, trilateral talks between China, Japan and South Korea on setting up a Northeast Asia free-trade agreement (FTA) are continuing. The second round of working talks among officials from the three countries was held this week in Qingdao. The goal remains to start the formal negotiations on the agreement by the end of this year.

As is always the case with free trade agreements there are plenty of potential pitfalls ahead as domestic vested interests rear their heads. One example is Japan’s farmers who have stalled a mooted bilateral deal between Tokyo and Seoul for almost a decade. But Tokyo won’t want to be cut out if Seoul and Beijing  complete their proposed bilateral deal. Nor will Beijing want to do anything to drive Tokyo towards the Washington-led TransPacific Partnership.

The three countries are already closely tied by trade and investment as well as physical proximity. No matter how rough the diplomatic waters between the three get, all have an interest in plainer sailing on trade.

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Signs It Is An Anniversary Of The End Of World War II

Ways to tell it must be the anniversary of the end of World War Two:

  • Japan arrests Chinese activists who land on one of the Senkakus, known as the Diaoyus to China, the islands in the East China Sea islands whose ownership is disputed by the two countries;
  • Beijing lodges a strong protest with Tokyo;
  • Japanese cabinet ministers make their annual controversial visit to the Yasukuni shrine for the war dead in Tokyo;

This year, add something new to the list: South Korea’s president making remarks about Japan’s Emperor, drawing a protest from Tokyo that they were insulting. Lee Myung-bak told a group of teachers that if Emperor Akihito wants to visit South Korea (something that is apparently in no one’s travel plans) he should apologize more sincerely than his 1990 expression of “deepest regrets” over the war.

More than six decades on, the war in East Asia still casts a long shadow over the region. Tapping into anti-Japanese sentiment remains a surefire way to seek public support in South Korea and China. This particular year, with tensions rising over territorial claims in both the East and South China Seas, its shadow risks being darker and heavier than usual.

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