China's influence onto North Korea's program of economic reform
By Jerzy Bayer

I.  Initial and failed attempts by North Korea to copy some Chinese
reform measures
Over the final decade of Kim Il Sung's rule primary attempts
were made by North Korea to copy some elements of the Chinese reforms and
modernization program. In early 80-ies North Korea assessed China's reform
and opening program positively and in 1984, Kim Il Sung approved a concept
envisaging joint ventures between North Korean enterprises and foreign
investors. In September of the same year the Supreme People's Assembly
confirmed that concept when it voted it into law. A set of relevant
regulations includes among other documents "The Law of the Democratic
People's Republic of Korea on Foreign Enterprises" and "Regulations for the
Implementation of the D. P. R. K. On Wholly Foreign-Owned Enterprises". As
the regulations were neither precisely formulated nor properly implemented
and overall conditions in the country were far from being ripe for any kind
of foreign economic presence the results were more than modest: only some
150 mln USD in some 100 projects were invested over almost ten years, i. e.
since lat 1984 through early 1993. Neither the political system of North
Korea, nor its economic structure were even partly ready for such immense
innovations. Neither had the North Korean leadership any will and
determination to pursue the reform policy as its own existence might be at
stake in the wake of any more profound changes to the system.  
*
II  Generally negative attitude of the North Korean leadership
toward the Chinese reform program in the 90-ies
* As reform and opening in China had been progressing over the
80-ies and particularly after China and South Korea established full
diplomatic relations 1992 North Korea rejected the Chinese model. Both Kim
Il Sung and his son and successor Kim Jong Il were in fact against any
far-reaching reforms in North Korea. During his trips to China in 1989 and
1991 Kim Il Sung openly voiced reservations against the reform and opening
policy. Even visits to provinces where the reform program had already
yielded conspicuous results (like Jiangsu and Shandong with the latter
already then nurturing particularly close economic ties to South Korea) were
not able to convince him and make him change his mind. North Korea was
openly criticizing China's economic policies.
* Documents on foreign economic activity approved by the North
Koran legislature in 1992 are noticeably modeled after equivalent Chinese
legal acts and were evidently adopted under China's pressure only. For
example, fully foreign-owned enterprises were allowed in the Rajin-Sonbong
Free Trade and Economic Zone only. The date of approval was not incidental
as it coincided with a substantial change in China's approach to foreign
economic relations, i.e. applying world standards of the market economy and
breaking with the ideologically motivated 'economic cooperation'.
* As late as in 1999 both 'Nodong Sinmun' and 'Kulloja'
editorials explicitly criticized the Chinese reform program from the point
of the ideological principles. In their mind, "predominance of material
incentives over political and moral ones runs counter to the fundamental
nature of the socialist system", is "an antithesis of socialism" and is
"contrary to the very theory of the socialist market economy". The North
Korean party mouthpieces were still more critical of the Chinese call for
"liberation of thought" ("jiefang sixiang"), i. e. removing ideological
shackles. One of the main objects of criticism was the Shanghai Pudong
development zone.

III. China's pressure onto North Korea to modernize its economy
and attain relative self-sufficiency.
* As soon as the reform and modernization program started
bringing fruits China verified its commitments to political and economic
partners. Cooperation and a specific pattern of trade-cum-assistance in
relations with North Korea was more and more perceived as a burden and a
liability than an asset for China. In 1992 a vital decision was made in
China to cease the barter trade with North Korea and turn to 'universal
forms of trade', i. e. internationally adopted financial dealings based on
market prices. Chinese leaders and officials at all levels then became
active in trying to persuade North Korea to implement changes in its
economic structure and drop the self-isolation policy as China was already
not able to provide any more large scale and free of charge assistance.
North Korean delegations were introduced to the success of economic reforms
in China's southern provinces and their special economic zones, particularly
to Shenzhen. In November, 1990, the then Prime Minister of North Korea, Yon
Hyong Muk heard from Secretary General of the CCP CC,  Jiang Zemin that
"China could pursue the open door policy and maintain its socialist road at
the same time. The economic reform and the socialist thought are mutually
supportive[...] and socialism could not develop among economic hardships".
It was one of the clearest and most emphatical suggestions that North Korea
should not be afraid of reforms and opening to the world. Other Chinese
officials were bringing home the message that under reforms modeled after
the Chinese pattern "both the nation and the country will benefit and the
leadership and the party will remain in power as reformers and saviors". As
many Chinese experts point out a formal justification and substantiation of
reforms would be perfectly possible even from the point of view of the
'juchhe' ideology. 
* China's pressure resulted not to a small extent from its
exhaustion with perpetual demands by Pyongyang to increase or at least to
maintain the economic assistance providing the genuine lifeline to the
ailing North Korean economy and its suffering population. China's economic
relations with North Korea over dozens of years straddled between trade and
assistance. The accurate value of China's assistance has never been
published but according to some estimates - American (American Enterprise
Institute), Chinese (Shanghai Academy of Social Sciences) and South Korean
(KOTRA) - its annual dimension amounts to 470 mln USD and a total between
1998 and 2000 may have reached a figure between 30 and 50 bln USD apart from
humanitarian and military assistance (the latter being evaluated between 300
and 500 mln USD a year). There is a common perception among Chinese scholars
and officials that over the last 50 years billions and billions of dollars
have been wasted to prop up the inefficient North Korean economy. In
official terms  China attempts to minimize it6s assistance - during the
second round of six-party negotiations in Beijing in February, 2004 the
Chinese Foreign Ministry assured that "the economic assistance to North
Korea had been provided within the scope of China's possibility to let the
DPRK surmount temporary economic difficulties and rebuild the economy"   
* In China's opinion, refraining from implementation of
reforms in North Korea is bound to bring about petrification of an archaic
political system, deepening the isolation and nursing dangerous tensions
within the society. As early as at the beginning of the 90-ies some Chinese
experts already branded the economic assistance to North Korea as 'useless'
and 'nonsense' and being earmarked mainly for the North Korean military and
not for the needy population. It was only for strategic reasons that the
assistance was still being provided. Towards the end of the 90-ies and in
recent years Chinese experts point out that although indoctrination, hunger,
poverty, strictly regulated daily life etc. are nothing new to the North
Korean society then under the circumstances of 'an intensive increase in
those phenomena' one could expect that the North Korean system attain the
limits of its applicability and cause a breakdown of impredictable political
and social proportions.     
* In 2003 China's doubts and reservations about the North
Korean political and economic system for the first time were expressed in
public. In particular, durability and stability of the system were more and
more frequently questioned. Moreover, while in earlier analyses China  - at
least in official remarks - was sure that the North  Korean leadership would
be able to govern and provide stability, now it prefers a more cautious
approach saying that the leadership in Pyongyang would hold on power "for
some time to come" if it embarks on the road of reforms similar to those of
China. Some Chinese officials and even media mentioned differences between
the Chinese modernization program and North Korean reformatory steps and
hinted between the lines - like e. c. 'Renmin  Ribao' in its commentary on
10th October, 2002 - that so far-reaching and swiftly implemented reforms as
they were in case of the completely unprepared North Korea might weigh on
the stability of state structures. 
* China's pressure was measured but constant. Though China
used to repeatedly voice its cautious stance saying that "each country
should act along its specific lines and a model adopted by one country is
not necessary feasible for another one" Chinese leaders did their utmost to
bring a harsh message home to their North Korean counterparts. In
mid-August, 2003, prior to the first round of the six-party talks on the
North Korean nuclear crisis in Beijing, Hu Jintao, the president of China
and the party chief, in almost ultimative terms, through his messengers to
Pyongyang requested Kim Jong Il  to terminate the WMD program and focus on
economy. He meant that North Korea should achieve economic self-sufficiency
in crucial fields like agricultural production, including provision of
foodstuffs, daily necessities, basic amenities etc. Representatives of the
CPC  CC who visited Pyongyang in August, 2003, on the eve of the upcoming
six-party talks on a mission to convince North Korea (i. e. Kim Jong Il) to
participate in those negotiations hit the point with a very blunt diagnosis
that "destabilization and disorder resulting from the economic failure and
breakdown could become as much of a danger for the DPRK as an American
aggression". Albeit Kim Jong Il nodded his assent to the talks he
nevertheless resisted to Hu Jintao's and China's pressure to follow China
and institute an opening policy. Later on, in October, 2003, the president
of Standing Committee of the National People's Congress of China, Wu
Bangguo, on a state visit to Pyongyang brought with him a grant of 25 mln
USD meant as an 'assistance' to North Korea and in fact being a gift for Kim
Jong Il in recognition of his approval for Beijing negotiations.

IV. North Korea's economic failure as a backdrop of the new
economic policy - some aspects in Chinese assessments: 
Chinese experts are sure that North Korea urgently needs economic
reforms if the country is supposed to survive. Three major elements are
underlined in evaluations and assessments of the North Korean economy being
in doldrums: lack of foodstuffs, energy shortages and lack of capital.
According to Chinese estimates, between the end of the 80-ies and 1995 the
agricultural production in North Korea dropped by not less than 50 % to some
2.5 ~ 2.6 mln tons (which is a level much lower than what South Korean
experts tend to believe, i. e. 3.69 mln tons). The main reasons for that
were: negligence of the irrigation system, consecutive inundations, lack of
fertilizers, insufficient mechanization, technological backwardness. The
crisis in agriculture brought about the breakdown of the food distribution
system. Both the agricultural and the industrial production have been
continuously decreasing over the 90-ies and after 2000 by some 10 % on an
annual basis; this, again, is double that estimate than what South Korean
analysts have calculated (i.e. 5 % annually). The specter of an economic
failure, accumulating crisis phenomena and a looming implosion of the system
must have been underlying factors behind North Korea's decisions to study
the Chinese model.  

V. Kim Jong Il's 2001 tour of Shanghai's Pudong as a source of
inspiration
Kim Jong Il's working visit to Shanghai between January 16th and
20th seems to have marked a breakthrough in North Korea's economic policy,
at least as far as concepts are concerned. Being hosted by the then Prime
Minister of China, Zhu Rongji who himself had served as a mayor of Shanghai
and coordinated initial modernization measures in that metropolis Kim Jong
Il had a chance to get acquainted with remarkable changes that had ensued in
the economic capital of China since his previous stay there in 1983. The
North Korean leader visited Shanghai Huahong NEC Electronics Co. With the
1.2 bln  Japanese investment input, Shanghai General Motors Automotive Co.
(US investment of approx. 1.5 bln USD), Shanghai Bell Co. (French capital)
and a number of other enterprises. His visit to the GM factory was said to
have been his first ever face-to-face contact with so much despised American
capitalism. Some of those enterprises are located in the modern district of
Pudong which only two years before was subject to harsh ideological
criticism by North Korean media as a hotbed of deviation from pure
socialism. Key points of his interest were: foreign investment influx and
relevant legal regulations, market economy rules, efficiency incentives, the
state's role in guiding and supervising economic development, economic
structure transformation, export offensive. The Shanghai Stock Exchange
offered professional education courses for North Korean economists. Kim Jong
Il heaped much praise onto both Pudong and Shanghai and the Chinese
modernization policy in general. Methods and speed of reforms became
predominant topics of his discussions with Zhu Rongji. His entourage
consisted of both representatives of the young generation of managers and
technocrats and conservative party experts renowned for their opposition and
fierce resistance to any reform steps. The message of the visit was obvious:
to demonstrate to opponents of any changes that economic reforms might
succeed in absence of any major political threat, with the political system
being fully preserved, stability being upheld and the role of the party
being as strong as ever. Kim Jong Il's trip to China was accompanied by
carefully orchestrated voices of his propaganda machine as 'Nodong Sinmun'
called for 'innovative thinking', 'liberation from fixed patterns' and
'learning from structures and rule sin other countries'. Those publications
almost exactly copied similar Chinese explanations justifying the need of
reforms at the turn of the 70-ies and the 80-ies.  Shanghai as a main
destination of Kim Jong Il's China trip and the conspicuous tour of once so
heavily criticized Pudong - considered to be a symbol and a major showcase
of China's modernization success - may have proven a substantial change of
mind among the North Korean leadership in economic affairs. Kim Jong Il
could not contain himself and termed Pudong 'a miracle' which speaks volumes
about his attitude. His interest in Chinese reforms was confirmed in April,
2004, when he visited China again on an unofficial trip (19 - 21.04.2004). 

VI.  Practical steps in the North Korean economic reform in 2002:
* Special economic zones in Kaesong (north of DMZ) and Sinuichu (at
the Chinese border opposite the Chinese town of Dandong in the Liaoning
province) were established although China is skeptical about prospects for
the latter in absence of any substantial financial input (the Kaesong zone
enjoys much interest from South Korea companies). 
* The traditional system of basic goods rationing and relevant coupons
was canceled as of 1st July, 2002. The state controlled distribution of all
daily necessities ceased to exist and was replaced by a makeshift market
regulations.
* State subsidies wre withdrawn form industry and the economic
calculation and market regulations were introduced to an absolutely
unprepared environment sometimes bore a curious nature as some industrial
enterprises, requested by the state authorities to produce tangible,
profit-based economic results in form of high income and revenues in order
to cover current depreciation of their plants, started dismantling their
equipment and  selling it to China as scrap !
* Prices were deregulated and subsequently skyrocketed overnight (in
case of rice from 0.08 won per one kilogram to 44 won, i.e. 550-fold !) as
there was no effective price system control due to the lack of preparation
on the part of relevant institutions and even basic knowledge of any market
mechanisms.
* In the wake of the above additional currency supply was emitted to
cover new expenses like raised salaries and incentives. That sparked an
abrupt inflation when an average salary of a manufacturing worker hiked from
110 won a month to 2,000 won but for government officials, soldiers, miners
and farmers the increase was 60-fold. Producers were offered strong material
incentives in order to boost their activity.

VI.  The new economic program in North Korea - a comparison with the
Chinese model
* North Korea has not experienced the same reform stimulus as
China did at the time of both the 'Great Leap Forward' and the infamous
'Cultural Revolution' which marked the overall failure of Mao Zedong's
economic policies. 
* North Korea has not discarded the supremacy of the 'juchhe'
idea and its inherent economic component which immediately raises questions
about practicality of reformatory steps. China's Deng Xiaoping, although he
had never claimed to be the only interpreter of Mao's thought, was brave
enough to criticize and shelve many Maoist dogmas and conservative policies,
both in politics and in economy, which laid a sound groundwork for future
reforms. In case of North Korea Kim Jong Il enjoys a unique position of the
only custodian and commentator of the 'juchhe' idea which makes it extremely
difficult for him to undercut its basic tenets. 
* In spite of Deng Xiaoping's role Chinese model of leadership
has been a collective one while in North Korea it has always been a one-man
decision-making center (i. e. Kim Il Sung or Kim Jong Il). Under those
circumstances no change is imaginable unless it comes from the very top of
the power structure.
* The new economic policy in North Korea was initiated in the
cities in mid-2002 (officially as of 01st July, 2002) and not in the
countryside as it was in the case of China. Free market rules were
introduced and surplus products of agriculture, handicraft and industry went
on sale with liberal prices. The new measures were gradually applied in
other sectors of economy and other parts of the country. The private economy
was in fact officially sanctioned as it had already existed in North Korea
since early 90-ies, i. e. since first symptoms of an acute economic crisis
and a breakdown emerged. When the program of economic reforms was
implemented in China agriculture - with some 70 % of the population living
and being then employed there - was still the very foundation of the economy
while in North Korea it is approximately 30 %. The unquestionable success of
those reforms after 1979 enabled the Chinese leadership to gradually
transfer selected elements of the reform program to the industrial sector as
of 1984. Mostly due to its experience drawn from the Korean War (1950-53)
just after termination of hostilities North Korea declared the industry to
form a backbone of its economy. With numerous schemes and fixed patterns of
planning, operation, financing etc. established and petrified over the past
decades the North Korean industry offers very limited possibilities to
maneuver toward any substantial alternation of its structure and a
breakthrough in its performance.
* While in China the responsibility system that was introduced
in agriculture at the turn of the 70-ies and the 80-ies focused on a peasant
family as a basic economic unit in the countryside, in North Korea a group
of families became a core of the new system instead. In this way, the Korean
model retained a more collective nature which was less controversial and
more compatible with the general ideological pillars and in line with the
economic system.
* Contrary to China's situation at the beginning of the reform
process, in North Korea industrialization, urbanization, deep penetration of
the agriculture and related branches of economy by socialist schemes and
dogmas (including the mandatory planning) have proceeded much further which
constitutes an important structural and psychological barrier for any
reforms. 
* Reforms in agriculture were limited to a material sphere
only- i. e. stimulating production - while the aspect of land property (even
in form of a lease) was not mentioned at all
* While industrial enterprises were allowed to sell their
surplus production on a free market and some forms of incentives were
introduced for the working staff in factories, the managers were not covered
by the 'production responsibility system' and crucial decisions on matters
conducive to efficiency - like salaries, promotions and demotions, personnel
employment and reduction etc. - remained outside their scope of activity
although they do decide over matters related to production.  
* In China prices were being liberalized gradually and an
adjustment of salaries was following suit while in North Korea all measures
were taken at one go when prices adopted market dimensions and salaries were
artificially raised on the same day. This way, instead of stimulating
efficiency and providing bonuses, the increased salaries in fact only
compounded economic hardships at the backdrop of continuous short supply of
essential goods as they prompted incontrollable inflation. Moreover, market
regulations were disregarded when price level was established with such
basic elements like production costs, supply and demand were being left out.
Some experts (e.g. Gordon Chang) evaluate the results of the price reform as
a major disaster as there seems to be no exact program of consecutive and
consistent measures to be taken in North Korea. In China the path was clear:
firstly agriculture was denationalized, secondly  the light industry was
privatized, thirdly foreign trade and investment were liberalized, fourthly
state-owned enterprises in the heavy industry sector were made accessible
for the private business and finally the time is coming to deal with the
outdated banking system once other sectors have already registered solid
growth, stability and progress. .
* Chinese reforms were and still are extended in time as a
gradual and consistent process divided into specific and precise stages and
phases while in North Korea it is rather more of another campaign of a
political and ideological sort like many other campaigns in the past. The
North Korean prime minister, Pak Pong Ju, confirmed that way of thinking in
his speech at the session of the Supreme National Assembly on March 28th,
2004 when he called for a 'leaping progress' in economy this year.    
* Due to its limited surface North Korea has no possibility to
try economic reforms in a sense they were tested in China where special
economic zones were conveniently carved out of the vast territory.
* In the sphere of finance no tax regulations beneficial for
market mechanisms and foreign investment were announced nor even mentioned
while in China those constituted one of the major pillars of the economic
modernization program.
* In spite of using euros and Japanese yen as basic foreign
currencies North Korea still continues a practice of maintaining an
artificial three-tiered money system with 'foreign exchange certificates'
('pakkundon') which in case of China ceased to be circulated in early
90-ies. The inefficient financial system opens large vistas for the currency
black market as e. g. one euro is officially worth 171 won but it fetches
more than 1,400 won az the semi-official exchange rate. 
* In banking a very rigid set of regulations was kept
unchanged. An enterprise still is allowed to operate only one account at the
central bank which supervises all transactions and financial operation of
that enterprise. In China much more flexibility and liberty was granted to
enterprises in financial matters.
* In investment North Korea had no chance to rival China as
for the amount of foreign capital influx. China was vastly assisted first by
its overseas Chinese and only second by other foreign investors while the
only Korean community abroad which is favorably inclined toward North Korea
is the Chongnyon association in Japan with its some 300 thousand members and
hardly any big economic and financial powerhouses but for Sanyo.  
* Taiwan has been playing an important role in the
implementation of China's reform program. At the same time Taiwan does not
constitute any danger to China as it is no match, both in terms of
population, land area, economy and military strength while   North Korea has
to take into account the superiority of the capitalist South in every
possible respect thus seriously undermining confidence (if any), limiting
closer contacts and forestalling any wider cooperation 
* Already at the initial stage of the reform program China
secured the peaceful atmosphere when it normalized and then enjoyed good and
still improving relations not only with its neighbors but first of all with
major world powers and global and regional financial institutions (World
Bank, IMF, ADB) which provided most funds so badly needed for the
modernization of the Middle Kingdom. The friendly political environment
became an indisputable precondition for China's modernization program. In
this respect North Korea had no chance to follow China's example as it is
still at odds with the USA and Japan and at loggerheads with important
international organizations like IAEA and also has a very long and bad
record of insolvency lack of honesty in treating foreign financial
obligations which effectively scares presumable partners away. The nuclear
blackmail game being played by North Korea since late 2002 to win
concessions on the part of the US and other Western countries has evidently
turned counterproductive as no one as ready to deal with the country using
its nuclear  arsenal as an argument in international dealings.
* The 'Songun' - 'Military First' - policy declared by Kiom
Jong Il is in fact a direct or indirect barrier to economic recovery of
North Korea and still more counterproductive to any reform (or
'modernization') attempt. In China army was just one of the beneficiaries of
the modernization program and not the main profiteer.
* In a contrast with China's policy North Korea is reluctant
to open widely to the outside world. E. c. numerous clauses in regulations
referring to foreign presence and investment tightly restrict movement of
foreigners and their professional activity. 
* Divergence of opinions on future economic measures in North
Korea results from a generation split as younger officials are more open to
changes while their older counterparts seem immune to any hint of real
deviation from strict socialist patterns.
* There are multiplying indications pointing to a superficial
and perfunctory nature of North Korean reforms. They all but seem to aim at
limiting the aftermath of the economic crisis which had been assuming
dangerous proportions for the ruling elite,  assure its survival and arrest
the continued deterioration of the economy but not at any genuine economic
restructuring. Some reformatory steps seem to be of a situational nature, i.
e. coping with immediate problems which call for an urgent solution and not
of a dispositional nature, i. e. instituting profound and fundamental
changes in the economic system. A clear signal to that effect appeared in a
pro-Pyongyang daily published by the Chongnyon in Japan which stated as
early as February, 2001 that the DPRK would not follow the Chinese policy of
modernization and selected enrichment for some strata of the society that
had been a linchpin of Deng Xiaoping's concept of moneymaking.  
* North Korea vehemently opooses any mention of a 'reform' as
that notion would explicitl<< imply a failure of socialism. A term
'hyundaehwa' - 'modenization' - is put into use instead.

VII.  Hesitations and doubts versus more practical steps on the part of
Pyongyang
* Fear of negative social consequences to the tune of China's
movement for democracy and subsequent Tian'anmen events in April through
June, 1989. Pyongyang is obviously aware of drawbacks and shortcomings of
the 'juchhe' ideology, particularly in the economic field, but the last
thing the North Korean leadership would be supposed to do is to let that
ideology doom to failure which would be tantamount to not only compromising
that ideology but first of all to undermining their own legitimacy. 
* In spite of lingering fears of 'capitalist contamination'
and infiltration of Western values North Korea noticed a very important
aspect of Chinese reforms: that they might be successfully carried out
without any major political side effects like 'democratization' and
uprooting the party power. What really counts for North Korea is a model of
'a hard state' and 'a soft economy'. 
* North Korean study groups are supposed to frequent China in
bigger numbers than hitherto but no breath taking results should be expected
in economic developments in North Korea. On a darker note, the topic of
economic modernization was conspicuously absent from this year reports to
the Supreme People's Assembly by both North Korea Prime Minister, Pak Pong
Ju and the finance minister, Mu Il Bong.  
* North Korean propaganda mouthpieces virtually dropped their
critical tunes and have been recently more and more informative about
China's economic progress quoting accurate figures and introducing the North
Korean public to specific development projects, e. c. in agriculture,
energy, environmental protection etc. 
* So far the economic policies implemented over the last three
years do not amount to evidence that North Korea is fully committed to
economic reforms and the modernization program seems to have largely failed
to deliver. New financial instruments - like People's Life Bonds ('Inmin
Saenghwal Kongch'ae') the citizens were strongly encouraged to purchase in
order to surrender their holdings of hard currency - have virtually not
worked as they were a misconception from the very beginning: there is no
solid backdrop in the economy to rely on.  Nevertheless there are first
signs of change in a rigid society as North Koreans are becoming more
capitalistic and less passively reliant on the state. Thus social and
economic relationships have been modified to a great extent at the grass
root level which spells ill for the present form of government. 

VIII. The scope of China's influence onto the policy of the North Korean
leadership
It is evidently limited and exaggerated. China is situated in an
uncomfortable position between a rock and a hard place as it has to prompt
North Korea into conducting economic reforms as indispensable means to
enable its survival and reduce China's financial burden but on the other
hand it has to keep North Korea on a life line and  prop up the regime of
Kim Jong Il lest it collapse. Bearing in mind the vulnerability of the North
Korean political system China has also opposed and surely will oppose any
international movements that could precipitate that undesirable downfall. As
China is both keen on keeping the North Korean status quo, i. e. upholding a
socialist state and on the other hand it strongly insists on Pyongyang to
redress its economy there is a state of ambiguity and perplexity in
Beijing's policies. All that is being done in the name of the socialist
brotherhood which is of primary importance to China as abandoning North
Korea would undermine the ideological credence of China's leadership. Kim
Jong Il is very much aware of that state of affairs and plays his own game
sometimes bowing to China's pressure and sometimes effectively resisting it.
That interdependence and entanglement of interests on both sides defies
assumptions on China's relative strength and North Korea's weakness, i.e.
susceptibility to pressure. Further on, it means that China's influence on
North Korea is not as potent as supposed and grossly exaggerated but
nevertheless it is decisive.    



J. Bayer