Rodger Baker – Economy Watch

China & North Korea: A Historically Tense Alliance Built On Necessity

Rodger Baker — Fri, 19 Apr 2013 07:34:16 +0000

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China & North Korea’s relationship can be traced back to more than a thousand years; and just like today, the relationship between China and North Korea has always been one of mutual necessity. Nonetheless, a rift now appears to be emerging between the long-time allies. North Korea’s continued use of a threatening posture, if it fails to gain concessions and shows China’s inability to influence its smaller neighbour, may ultimately be seen by China as detrimental to its own interests.

China appears to be growing frustrated with North Korea’s behaviour, perhaps to the point of changing its long-standing support for Pyongyang. As North Korea’s largest economic sponsor, Beijing has provided the North Korean regime with crucial aid for years and offered it diplomatic protection against the United States and other powers. To outsiders, China’s alliance with North Korea seems like a Cold War relic with little reason for persisting into the 21st century. However, Beijing’s continued support for Pyongyang is not rooted in shared ideology or past cooperation nearly as much as in China’s own security calculations.

Perhaps nothing sums up the modern relationship more effectively than the oft repeated comment that the two countries are “as close as lips and teeth.” Far from a statement of intense friendship, the completion of that Chinese aphorism – “When the lips are gone, the teeth will be cold” – highlights China’s interest in propping up the North Korean regime. North Korea serves as a buffer state for China’s northeast, and though Pyongyang can exploit that need, the North Korean leadership harbours no illusion that China is truly interested in the survival of any particular North Korean regime so long as Beijing can keep its buffer.

Whether China is seriously considering a change in relations with North Korea, ties between the two countries are shaped as much by geography and history as they are by choice. The Korean Peninsula abuts China’s northeast, along Manchuria. The Yalu River separates North Korea from China, and the area on the western edge of the border functions as a gateway between the two countries along an otherwise largely mountainous border. The geography of the Korean Peninsula, as seen several times in the past, offers little resistance to rapid military manoeuvres from north to south or vice versa.

At times, this border area was a troublesome spot for Chinese empires, which had to contend with various invaders and growing Korean military strength. At other times, the peninsula served as a conduit for Chinese culture to Japan – and intermittently as the main highway for military confrontation between China and Japan. During the 19th century and the expansion of European and American activity in Asia, if foreign countries had dominated Korea, it would have further undermined China’s already faltering national security. And during the Cold War, North Korea provided a strategic buffer against U.S. forces in Japan and South Korea, a role it still plays today.

A History Of Antagonism

China and North Korea draw heavily from history in assessing each other’s strategic positions, as well as their own. China sees North Korea as a useful buffer but one that can draw China into wars and potentially weaken or at least delay China’s attempts at achieving its own strategic imperatives. North Korea sees China as a necessary partner, one that through careful manipulation will continue to fund and protect North Korea, but always with the risk of North Korea losing control of its own fate to the Chinese. These are not new ideas – they draw from centuries of interactions, and both countries take different lessons from that history.

The North Koreans trace their lineage and in part their national philosophy to the Koguryo Kingdom, which lasted from 37 B.C. to 668 A.D., was centred in what is now North Korea and stretched well into modern-day China’s northeast. During the seventh century, one Chinese dynasty wore itself out trying to expand into Koguryo, and that dynasty’s successor was successful only after briefly allying with the dominant kingdom in what is now South Korea. The Chinese dynasties’ moves against the Koguryo Kingdom reflected their concerns about having a strong power on China’s frontier, a concern that continues to this day. China and both Koreas still have brief academic spats over the historical affinity of Koguryo, with China claiming it was a Chinese dynasty, in part to justify Beijing’s continued oversight of North Korea but also to challenge any potential reunified Korea’s claims to the ethnic Korean population that still resides on the Chinese side of the Yalu River.

The Korean Peninsula was also used as an invasion route between China and Japan. During the 13th century, after more than two decades of conflict, the Yuan Dynasty finally beat the ruling Korean kingdom into submission and used Korean shipbuilders, soldiers and supplies to launch two assaults against Japan, both of which ultimately failed. The Japanese, following unification under Toyotomi Hideyoshi some three centuries later, launched a large-scale invasion of Korea on their way to Ming China. The six-year war highlighted one of the weaknesses of Korea’s defence – the Japanese moved rapidly up the peninsula, quickly taking Seoul, Kaesong and Pyongyang. Ming forces rushed troops into Korea to block the rapidly advancing Japanese, who had all but brushed aside the unprepared Korean forces.

The combination of Chinese cannon and mobile troops from southern China, plus the ability of the Korean navy to cut Japanese supply lines, turned the tide, but throughout the intervention, the Chinese and Koreans found little to agree upon. Korea’s ruling Chosun Kingdom saw itself as defending Ming China from the Japanese aggressors and demanded the utter defeat of the Japanese and if possible their subjugation. The Koreans further feared China would use the opportunity to leave its forces on the peninsula permanently. The Chinese were willing to settle for the retention of a buffer Korean state and considered accepting Japanese occupation of southern Korea, calling frequent cease-fires during the war that the Koreans saw as too beneficial to Japanese and Chinese interests but not to their own. The intervention during the Japanese invasion, like the later intervention during the Korean War from 1950 to 1953, was not based on the interests of the Koreans but very much on the interests of the Chinese.

[quote]Despite Korea’s concerns about possible Chinese domination, since the seventh century the various Korean kingdoms managed to largely retain their independence by nominally acceding to China’s imperial vision and accepting a special relationship with the Chinese dynasties. This allowed China to remain confident in Korea’s loyalty on the border and gave Korea a relative assurance that China would not invade it. For both, it was a combination of convenience and necessity that drove relations.[/quote]

The pattern continued with only a few interruptions into the 19th century, even as China was being worn down by European colonial powers. China vigorously defended Korea’s right to remain isolated from the rest of the world. Beijing was not strong enough to use military power to ensure Korea’s continued role as a strategic buffer but rather exploited its special relationship with Korea diplomatically. Beijing would alternate between claiming a suzerainty relationship with Korea, making it the only path to dialogue with the Hermit Kingdom, and claiming that despite the special relationship the Koreans set their own foreign policy and China was not responsible for their actions. China’s main objective here was to keep Korea out of the hands of foreigners.

Ultimately, China failed. Amid the complex manoeuvring between the Chinese, Japanese, Russians, Koreans and others in the early 20th century, Japan took control of the Korean Peninsula. Holding Korea effectively ensured that there was little chance that China or another power could use the territory to stage an invasion of Japan. Possession of Korea also helped the Japanese to seize more of Manchuria, reinforcing to China just how important Korea is to China’s national security interests.

Korea As A Strategic Asset

At the end of World War II, China was focused on its internal civil war and was not yet prepared to re-establish a special relationship with Korea. But by 1949, the Chinese Communists had largely emerged victorious at home and the Soviet occupying forces in North Korea had left. North Korea’s new Communist government, formed after the Japanese withdrawal and the peninsula’s division in 1945, consulted with or perhaps manipulated Moscow and Beijing into offering their political and military backing for an invasion of the South.

At the same time that Pyongyang was preparing its invasion into South Korea, China was preparing a cross-strait invasion of Taiwan. But China’s plans had to be shelved. Only days after hostilities broke out between North and South Korea in June 1950, the United States deployed ships to the Taiwan Strait to protect the Nationalist government in Taipei. When the North’s forces were halted and pushed back to the Yalu months later, China had no choice but to shift its attention away from Taiwan and enter the Korean War to deal with the much more pressing threat along its border.

The Soviets, concerned that a successful move by Beijing to defeat the Nationalists in Taiwan would then free Beijing to make political overtures to the United States, gained in the Korean War continued animosity between the United States and China. North Korea’s actions, while they could have been beneficial for China had they succeeded, instead undermined Beijing’s reconquest of Taiwan, locked Communist China into two more decades of contentious relations with the United States and ultimately left China responsible for supporting a faltering state on a critical border. The North Koreans were grateful for Chinese intervention but recognized that, as in past interventions, the Chinese were once again willing to settle for a divided Korea, so long as they could retain their buffer.

Although the North Koreans were able to draw on the emerging Sino-Soviet split after the Korean War to gain economic concessions from the competing Communist powers, the collapse of the Soviet Union and the end of the Cold War left the North Korean regime with a stark choice: risk losing control over the country amid attempts at reform and opening (the example of the Soviet Union and much of Eastern Europe did little to encourage this path) or accept the risk of a single sponsor state in China. Pyongyang sought another path; it would build a strong domestic deterrent to any military action while also threatening to use that deterrent to try to extract economic concessions out of the Americans, Japanese, South Koreans and anyone else concerned about peace and stability. Pyongyang would also draw on China’s continued fear of losing its strategic buffer.

[quote]Although largely effective in the past, this policy is beginning to see diminishing returns. North Korea is now even more dependent upon China than before, but China is as much a hostage to the relationship as North Korea is. [/quote]

Beijing has used the various North Korean crises to its own advantage, offering to mediate talks in return for political concessions from the United States or South Korea, playing a very similar game as it did during the colonial era by simultaneously asserting a special relationship with North Korea and denying responsibility for North Korean actions. For China’s leaders, this once served as a very useful way of managing regional relations and countering U.S. challenges to Chinese policies, such as currency manipulation. But for China, too, the policy is beginning to lose efficacy, and Washington is increasingly calling on China to either assert itself in dealing with Pyongyang or be sidelined. Washington may even be seeking to circumvent China, turning to India and Mongolia as potential interlocutors.

For China, North Korea remains a necessary strategic buffer, and in a unification scenario, the most China can tolerate is a neutral Korea that leans toward Beijing. For North Korea, Beijing’s need for a buffer may ensure that China will defend the North against an attack, but it doesn’t guarantee that Beijing would preserve the North Korean regime. Beijing may be just as well served by a more pliant North Korea as by the current government. The Chinese have already intimated that in a collapse or a war scenario, they may seize Pyongyang and hold the northern portion of Korea, effectively taking on responsibility for the management of the buffer zone, even if this is not the optimal solution.

North Korea’s continued use of a threatening posture, if it fails to gain concessions and shows China’s inability to influence its smaller neighbour, may ultimately be seen by China as detrimental to its own interests. This is the message China is now spreading via its academics and others, both in the domestic media and abroad. In return, North Korea, in commentaries in its state media, has suggested that small powers cannot trust the promises of big powers to defend them, and thus must build their own strong deterrent.

At the rhetorical level, a rift is emerging between Beijing and Pyongyang. Since both countries have new leadership, it is not surprising that they are uncomfortable with one another at this time. Both use North Korea’s continued crises for their own advantage, and both see that that approach is not working as well as it used to. During his recent visit to China, U.S. Secretary of State John Kerry sought Beijing’s help in understanding the behavior of North Korea and in reining in Pyongyang’s threatening statements and actions.

Beijing countered that Washington needs to engage Pyongyang in dialogue but that China itself has not established a close relationship with the new North Korean leadership. The subtext, even before the Kerry visit, was that Beijing itself is growing exasperated with Pyongyang’s actions, which are outside the realm of what China considers acceptable, and that Chinese academics, if not the leadership, are now openly discussing a possible break with North Korea and China’s near unlimited support of its belligerent neighbour.

This may be another feint. The Chinese once again may be seeking to trade their assistance with North Korea for political concessions elsewhere. And with North Korea less predictable given its new leader, these concessions may have to be higher than in the past. Washington appears to have already anticipated the Chinese counter and has suggested it could reverse some of its recent deployments of missile defence systems to the region if China intervenes with the North. There is some irony in the United States using the North Korean playbook in dealing with China – Washington essentially escalated the military situation with the missile defence deployment and is now offering to return to only slightly above the pre-crisis status quo in return for political concessions, namely calming North Korea.

[quote]North Korea’s actions are beginning to invite responses that threaten China’s strategic interests, from expanded U.S. missile defence to accelerating Japanese remilitarization to the increased potential for closer Japanese-South Korean military cooperation. If anything makes China begin to question which country has the upper hand in its relationship with North Korea, this may be it.[/quote]

By Rodger Baker, Stratfor

Rodger Baker is the Vice-President of East Asia Analysis at the private intelligence corporation Stratfor. He leads a global team of analysts, focusing on topics such as global political and economic affairs, U.S.-Chinese relations and East Asian politics.

China and North Korea: A Tangled Partnership is republished with permission of Stratfor.

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The post China & North Korea: A Historically Tense Alliance Built On Necessity appeared first on Economy Watch.

The China-Japan Rivalry Renewed: Will Asia’s Geopolitical Balance Shift Once Again?

Rodger Baker — Fri, 28 Sep 2012 08:02:36 +0000

Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.

Forty years after China and Japan first commenced normalized diplomatic relations, a group of islands – known as Diaoyu and Senkaku respectively – is now threatening to reignite past rivalries, including both nations’ claims to geopolitical power in the region. Behind the dispute lies several considerations, including handling internal and international political relationships, which both countries must now resolve in order to avoid a military conflict.

September 29 will mark 40 years of normalized diplomatic relations between China and Japan, two countries that spent much of the 20th century in mutual enmity if not at outright war. The anniversary comes at a low point in Sino-Japanese relations amid a dispute over an island chain in the East China Sea known as the Senkaku Islands in Japan and Diaoyu Islands in China.

These islands, which are little more than uninhabited rocks, are not particularly valuable on their own. However, nationalist factions in both countries have used them to enflame old animosities; in China, the government has even helped organize the protests over Japan’s plan to purchase and nationalize the islands from their private owner.

But China’s increased assertiveness is not limited only to this issue. Beijing has undertaken a high-profile expansion and improvement of its navy as a way to help safeguard its maritime interests, which Japan – an island nation necessarily dependent on access to sea-lanes – naturally views as a threat. Driven by its economic and political needs, China’s expanded military activity may awaken Japan from the pacifist slumber that has characterized it since the end of World War II.

An Old Conflict’s New Prominence

The current tensions surrounding the disputed islands began in April. During a visit to the United States, Tokyo Governor Shintaro Ishihara, a hard-line nationalist known for his 1989 book The Japan That Can Say No, which advocated for a stronger international role for Japan not tied to U.S. interests or influence, said that the Tokyo municipal government was planning to buy three of the five Senkaku/Diaoyu islands from their private Japanese owner. Ishihara’s comments did little to stir up tensions at the time, but subsequent efforts to raise funds and press forward with the plan drew the attention and ultimately the involvement of the Japanese central government. The efforts also gave China a way to distract from its military and political standoff with the Philippines over control of parts of the Spratly Islands in the South China Sea.

[quote]For decades, Tokyo and Beijing generally abided by a tacit agreement to keep the islands dispute quiet. Japan agreed not to carry out any new construction or let anyone land on the islands; China agreed to delay assertion of any claim to the islands and not let the dispute interfere with trade and political relations. Although flare-ups occurred, usually triggered by some altercation between the Japanese coast guard and Chinese fishing vessels or by nationalist Japanese or Chinese activists trying to land on the islands, the lingering territorial dispute played only a minor role in bilateral relations.[/quote]

However, Ishihara’s plans for the Tokyo municipal government to take over the islands and eventually build security outposts there forced the Japanese government’s hand. Facing domestic political pressure to secure Japan’s claim to the islands, the government determined that the “nationalization” of the islands was the least contentious option. By keeping control over construction and landings, the central government would be able to keep up its side of the tacit agreement with China on managing the islands.

China saw Japan’s proposed nationalization as an opportunity to exploit. Even as Japan was debating what action to take, China began stirring up anti-Japanese sentiment and Beijing tacitly backed the move by a group of Hong Kong activists in August to sail to and land on the disputed islands. At the same time, Beijing prevented a Chinese-based fishing vessel from attempting the same thing, using Hong Kong’s semi-autonomous status as a way to distance itself from the action and retain greater flexibility in dealing with Japan.

As expected, the Japanese coast guard arrested the Hong Kong activists and impounded their ship, but Tokyo also swiftly released them to avoid escalating tensions. Less than a month later, after Japan’s final decision to purchase the islands from their private Japanese owner, anti-Japanese protests swept China, in many places devolving into riots and vandalism targeting Japanese products and companies. Although many of these protests were stage-managed by the government, the Chinese began to clamp down when some demonstrations got out of control. While still exploiting the anti-Japanese rhetoric, Chinese state-run media outlets have highlighted local governments’ efforts to identify and punish protesters who turned violent and warn that nationalist pride is no excuse for destructive behaviour.

Presently, both China and Japan are working to keep the dispute within manageable parameters after a month of heightened tensions. China has shifted to disrupting trade with Japan on a local level, with some Japanese products reportedly taking much longer to clear customs, while Japan has dispatched a deputy foreign minister for discussions with Beijing. Chinese maritime surveillance ships continue to make incursions into the area around the disputed islands, and there are reports of hundreds or even thousands of Chinese fishing vessels in the East China Sea gathered near the waters around the islands, but both Japan and China appear to be controlling their actions. Neither side can publicly give in on its territorial stance, and both are looking for ways to gain politically without allowing the situation to degrade further.

Political Dilemmas in Beijing and Tokyo

The islands dispute is occurring as China and Japan, the world’s second- and third-largest economies, are both experiencing political crises at home and facing uncertain economic paths forward. But the dispute also reflects the very different positions of the two countries in their developmental history and in East Asia’s balance of power.

China, the emerging power in Asia, has seen decades of rapid economic growth but is now confronted with a systemic crisis, one already experienced by Japan in the early 1990s and by South Korea and the other Asian tigers later in the decade. China is reaching the limits of the debt-financed, export-driven economic model and must now deal with the economic and social consequences of this change. That this comes amid a once-in-a-decade leadership transition only exacerbates China’s political unease as it debates options for transitioning to a more sustainable economic model. But while China’s economic expansion may have plateau-ed, its military development is still growing.

The Chinese military is becoming a more modern fighting force, more active in influencing Chinese foreign policy and more assertive of its role regionally. The People’s Liberation Army Navy on Sept. 23 accepted the delivery of China’s first aircraft carrier, and the ship serves as a symbol of the country’s military expansion. While Beijing views the carrier as a tool to assert Chinese interests regionally (and perhaps around the globe over the longer term) in the same manner that the United States uses its carrier fleet, for now China has only one, and the country is new to carrier fleet and aviation operations. Having a single carrier offers perhaps more limitations than opportunities for its use, all while raising the concerns and inviting reaction from neighbouring states.

Related: China Economy

Japan, by contrast, has seen two decades of economic malaise characterized by a general stagnation in growth, though not necessarily a devolution of overall economic power. Still, it took those two decades for the Chinese economy, growing at double-digit rates, to even catch the Japanese economy. Despite the malaise, there is plenty of latent strength in the Japanese economy. Japan’s main problem is its lack of economic dynamism, a concern that is beginning to be reflected in Japanese politics, where new forces are rising to challenge the political status quo. The long-dominant Liberal Democratic Party lost power to the opposition Democratic Party of Japan in 2009, and both mainstream parties are facing new challenges from independents, non-traditional candidates and the emerging regionalist parties, which espouse nationalism and call for a more aggressive foreign policy.

Even before the rise of the regionalist parties, Japan had begun moving slowly but inexorably from its post-World War II military constraints. With China’s growing military strength, North Korea’s nuclear weapons program and even South Korean military expansion, Japan has cautiously watched as the potential threats to its maritime interests have emerged, and it has begun to take action. The United States, in part because it wants to share the burden of maintaining security with its allies, has encouraged Tokyo’s efforts to take a more active role in regional and international security, commensurate with Japan’s overall economic influence.

Concurrent with Japan’s economic stagnation, the past two decades have seen the country quietly reform its Self-Defence Forces, expanding the allowable missions as it re-interprets the country’s constitutionally mandated restrictions on offensive activity. For example, Japan has raised the status of the defence agency to the defence ministry, expanded joint training operations within its armed forces and with their civilian counterparts, shifted its views on the joint development and sale of weapons systems, integrated more heavily with U.S. anti-missile systems and begun deploying its own helicopter carriers.

Related: Japan Economy

Contest for East Asian Supremacy

China is struggling with the new role of the military in its foreign relations, while Japan is seeing a slow re-emergence of the military as a tool of its foreign relations. China’s two-decade-plus surge in economic growth is reaching its logical limit, yet given the sheer size of China’s population and its lack of progress switching to a more consumption-based economy, Beijing still has a long way to go before it achieves any sort of equitable distribution of resources and benefits. This leaves China’s leaders facing rising social tensions with fewer new resources at their disposal. Japan, after two decades of society effectively agreeing to preserve social stability at the cost of economic restructuring and upheaval, is now reaching the limits of its patience with a bureaucratic system that is best known for its inertia.

[quote]Both countries are seeing a rise in the acceptability of nationalism, both are envisioning an increasingly active role for their militaries, and both occupy the same strategic space. With Washington increasing its focus on the Asia-Pacific region, Beijing is worried that a resurgent Japan could assist the United States on constraining China in an echo of the Cold War containment strategy.[/quote]

We are now seeing the early stage of another shift in Asian power. It is perhaps no coincidence that the 1972 re-establishment of diplomatic relations between China and Japan followed U.S. President Richard Nixon’s historic visit to China. The Senkaku/Diaoyu islands were not even an issue at the time, since they were still under U.S. administration. Japan’s defence was largely subsumed by the United States, and Japan had long ago traded away its military rights for easy access to U.S. markets and U.S. protection. The shift in U.S.-China relations opened the way for the rapid development of China-Japan relations.

The United States’ underlying interest is maintaining a perpetual balance between Asia’s two key powers so neither is able to challenging Washington’s own primacy in the Pacific. During World War II, this led the United States to lend support to China in its struggle against imperial Japan. The United States’ current role backing a Japanese military resurgence against China’s growing power falls along the same line. As China lurches into a new economic cycle, one that will very likely force deep shifts in the country’s internal political economy, it is not hard to imagine China and Japan’s underlying geopolitical balance shifting again. And when that happens, so too could the role of the United States.

By Rodger Baker, Stratfor

Understanding the China-Japan Island Conflict is republished with permission of Stratfor.

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