Tag Archive | "north korea"

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Provoking the Market: Investors More Worried about Washington’s Response than Pyongyang’s Provocations

By Kyle Ferrier

Analysts have attributed recent market downturns to North Korean provocations, but investors seem to be reacting more negatively to responses from the Trump administration.

Prior to North Korea’s sixth nuclear test on Sunday, Kim Jong-un was cited as a key contributor to recent developments in global markets. The fall in the value of the dollar and the strengthening of the euro and gold this summer have at least been somewhat linked to North Korean provocations. For the dollar and the euro, North Korea is at most exacerbating these trends, not causing them. Since the end of last year, the dollar has been in general decline and the value of the euro has steadily grown. This is primarily driven by looser monetary and fiscal policy in Europe as the Federal Reserve plans to unwind its balance sheet and the White House faces hurdles in its tax reform and infrastructure initiatives. It is harder, however, to argue Pyongyang has played an equally minor role in higher gold prices. Yet, movements in the price of gold and South Korea’s KOSPI stock index this year suggests investors are more concerned with uncertainty stemming from the Trump administration’s approach to North Korea.

Graph of the price of gold, March to September 2017

Graph of the price of gold, March to September 2017

The conventional wisdom has been that the financial impact of North Korean provocations in South Korea decreases over time. My analysis of North Korea’s nuclear tests, long-range rocket launches, and military provocations along the DMZ through February 2016 (after its second “satellite launch” attempt) found this line of thinking applied to nuclear tests, but could not fully explain the other two categories. It is more accurate to state that the impact of North Korean provocations on markets in Seoul depends on whether a given event is viewed to be outside the context of normal geopolitical developments. That the financial impact of North Korean provocations generally diminished merely illustrated investors had been through similar events and their bottom line was minimally affected. It was not necessarily an indicator of future reactions, particularly as circumstances surrounding each provocation can change dramatically.

KOSPI stock index, March to September 2017

KOSPI stock index, March to September 2017

Significant drops in the KOSPI corresponding with North Korean provocations in January and February last year raised concerns that markets were reacting to Pyongyang at levels not seen since the shelling of Yeonpyeong island in 2010, but these can be chalked up to coincidence rather than cause. These concerns were renewed later last year in the aftermath of North Korea’s fifth nuclear test on September 9. Many news outlets linked the 1.25 percent drop in the KOSPI that day to the test, but this was also coincidence and not cause. Of the 1.25 percent drop, only around 0.07 percent occurred after news first broke of the nuclear test at 9:45am. The fall in the KOSPI as well as the won was much more likely linked to Samsung’s Galaxy Note 7 woes as well as a slowdown in global markets. Thus, from 2010 through the end of 2016, North Korean provocations had a negligible impact on markets in Seoul.

The KOSPI’s reaction to the North’s latest nuclear test is the clearest indication that this trend has ended in 2017. On September 4, the first trading day after the test, the KOSPI opened 1.73 percent lower. Though some of these losses were gained back, it was down 1.19 percent by the end of trading. Unlike the previous test last year, the sixth nuclear test is most likely to blame for this drop. The only other instance of a notable drop in the KOSPI caused by a provocation was in response to the July 4 ICBM, though its impact was minimal: The KOSPI closed 0.58 percent lower that day and took five days to recover. The ICBM launch on July 28 saw almost no change in the KOSPI or the value of the won. And, the August 29 ballistic missile that flew over Japan was only met with a 0.23 drop, which was made back the next day.

Timeline of North Korea's rocket launches and their impact on the South Korean KOSPI stock index

Timeline of North Korea’s rocket launches and their impact on the South Korean KOSPI stock index.

That markets would react to the earlier ICBM launch and the nuclear test makes a degree of sense, considering that both added a new component of geopolitical risk on the Korean Peninsula. The July 4 missile launch was the first time Pyongyang demonstrated its capability of hitting a U.S. state and the nuclear test also possibly revealed its ability to miniaturize a nuclear weapon.

However, from stronger market responses to the Trump administration’s approach towards Kim Jong-un, it is highly likely that Washington is playing a greater role in the negative market reactions to Pyongyang this year. From April 4 to 11, the height of confusion over the whereabouts of the USS Carl Vinson, the KOSPI fell six straight days, totaling to a 2 percent loss. From August 8 to 11, after Trump’s “fire and fury” comments, it fell four consecutive days, amounting to more than a 3 percent loss. “Fire and fury” was also a retort to the July 28 ICBM launch, which ironically had no discernible financial impact in Seoul.

Table of North Korea's nuclear tests and their impact on South Korea's KOSPI stock index

Table of North Korea’s nuclear tests and their impact on South Korea’s KOSPI stock index.

Both incidents also had a bigger impact on the price of gold than did North Korean provocations.  Between April 3 to 13 the price of gold shot up 2.75 percent. It rose again by 2.5 percent from August 8 to 11. Market responses to the provocations in July were mere blips by comparison. Gold rose a quarter percent on July 4, but was back to its previous price within two days, and the price actually fell after the subsequent ICBM launch. Though the August 29 and September 3 provocations were met with steep price increases – 2 percent and 0.68 percent, respectively – these reactions seem to be heavily influenced by Trump’s “fire and fury” comments, evidenced by the current increase in gold prices starting around the time of his remarks.

While harder to judge from the KOPSI alone, the comparison with gold prices implies that this week’s drop in the KOSPI was a product of market nervousness about how the U.S. might reply to the test, not North Korea. Further, if geopolitical concerns did play a role in the KOSPI in early July, they were likely caused by anxieties about a U.S. response, fueled by the USS Carl Vinson incident and Trump’s “disruptive” foreign policy.

Although these reactions are relatively minor and fleeting in the grand scheme of markets, they provide a window into how investors view geopolitical developments on the Korean Peninsula. They may only reflect temporary sentiments, but present the strongest case there has been in recent years that Washington is perceived as the primary driver of risk on the peninsula, not Pyongyang.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Photo from the Rafael Matsunaga’s photostream on flickr Creative Commons.

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Pyongyang’s Deficit Soars: Won Steady But for How Long?

By William Brown

ICBMs are not the only things soaring in North Korean skies.  Comprehensive second quarter data released by China Customs last week shows a huge jump in North Korea’s trade deficit with China—sharply falling North Korean exports and flat imports, a double bad combination.  And, potentially troubling to the Kim regime, the composition of trade seems to be promoting market activity rather than the decrepit, but still enormous, command economy.

China North Korea Trade Balance
*  China stopped reporting crude oil shipments in first quarter 2014 but the trade is reliably said to be continuing, probably at the old aid agreement terms which provides about 150,000 tons of crude each quarter.  The charts, above and below, have added in the value of that volume at generally declining Chinese crude oil export prices–$50 million in the most recent quarter.

Pyongyang has been able to keep a clamp on the exchange rate—won can be traded informally for U.S. dollars in markets around the country—but likely at some cost to the government’s reserves and its ability to expand money supply without sparking inflation, and perhaps with a little help from the balloons. But food and other commodity prices, meanwhile, may be on an upswing as drought followed by flooding diminishes prospects for the critical fall rice crop, and as worries about Chinese supplies may have pushed up gasoline and diesel prices.  An informal inflation index produced by DailyNK has inflation rising to a 16 percent rate in July, suggesting Kim’s signal achievement of fighting inflation may be at risk.

Officially, the Chinese data show a $174 million North Korean deficit in June and $574 million for the quarter, both at record levels. Considering China has taken its crude oil exports “off the books,” the actual North Korean deficit is probably even larger — in the graphics below we have added between $115 to $50 million each quarter to North Korean imports since 2014 to account for the oil.

China North Korea Trade exports and imports

How North Korea finances this large deficit in the face of sanctions on its nuclear and missile activities is not well understood, making policy analysis of those sanctions next to useless. Even South Korea’s Bank of Korea, which bravely estimates North Korean GDP, says it can’t guess at the country’s balance of payments or its hard currency reserves.  But for the sake of argument, and given the trade deficit with China has averaged about $200 million a quarter for the better part of a decade, it would seem reasonable to expect that about this amount of hard currency is earned or borrowed in a combination of net trade with other countries; foreign aid to North Korea including the offset for the crude oil; UN and other international expenditures inside North Korea; small amounts of inward foreign investment and loans; remittances from overseas workers and refugees or Korean immigrant families in Japan, South Korea, China and Russia; and tourism.

  • Probably to re-build domestic confidence after the country experienced a disastrous currency redenomination in 2009, followed by hyperinflation in 2010, Pyongyang’s monetary authorities appear to have fixed the unofficial won’s value at just above 8,000 won per dollar, and began to ignore the official 135 won per dollar rate.  Monetary stability since then is impressive, probably owing to some combination of market price caps, restrictions on the use of foreign currency, conservativism in expanding won credit, direct intervention using the regime’s own reserves and, most interestingly, a willingness to allow legal trading and use of dollars in the market places. And now, with five years of stability, won holders appear satisfied not to chase the dollar.
  • Still, the mystery of the day is why smart money dealers in Pyongyang aren’t taking advantage of the deteriorating export situation by buying up U.S. dollars and forcing a panic.  Either something else is happening that we don’t know about or there is trouble ahead for the country’s always-tenuous finances. One easily can imagine another breakout in favor of the dollar and panic selling of won—hugely disruptive in North Korea’s newly forming half-market economy.

North Korean Won

  

North Korean Exports Labor Intensive and Mining Products

North Korean exports to China fell to only $361 million in the second quarter, the lowest level since 2010, and even this was suppported by generally higher prices for most items.  Major export commodities included:

  • Apparel and other textiles accounted for almost half of its exports—$149 million, up from $145 million in second quarter 2016.
  • Ferrous and non-ferrous ores rose to $78 million, up from $65 million.
  • Fish product exports at $67 million, were up sharply from $31 million.
  • In contrast, mineral products, including coal, was recorded at only $2 million, down from $236 million in the same period of 2016.

None of these items would appear to be big hard currency earners for the regime, although they help provide employment.  Labor intensive textiles exports have grown in recent years as the industry makes better use of its antiquated mills, allowing exporters to pay workers directly in some cases and thus improving productivity of labor and capital alike.  Ore exports would seem problematic, given the UN sanctions against them, but Chinese firms were said to have invested heavily in the huge Musan iron ore complex on the border with China some years ago and may now be recouping investment costs by trucking the ore over into China.  This mine previously served North Korea’s largest industrial complex, the Kimchaek iron and steel mill in Chongjin, which is now dilapidated and only marginally productive. So the iron ore earnings may be coming at the expense of higher value-added steel products once exported from that plant and are likely controversial, even in North Korea, as they are thought of as a giveaway of the nation’s natural resources. China has also invested in a copper mine, and likely in other non-ferrous metals, but results from these are spotty and now largely sanctioned.  Fish products are essentially traded by fishing boats, with flows going both ways depending on the season.

Textiles lead North Korea’s imports

Imports from China also appear to be increasingly driven by consumer rather than government or investment demand.  Textiles, cell phones and television imports are growing at the expense of some industrial inputs and agricultural inputs, and cereals. Petroleum product imports, plus gasoline and diesel fuels, remain sanctioned and low.

  • Textiles and apparel imports reached $258 million, up from $198 million in second quarter 2016.
  • TV and cell phone imports totalled $50 million, up from $38 million.
  • Food products of all kinds registered $123 million, up from $96 million.
  • Diesel, gasoline, and kerosene imports were $19 million, down from $31 million, again from second quarter of 2016.

 

Selected Imports from China

 

Visibility of Chinese-made consumer products among the general public is spreading the suggestion that the economy is doing fairly well—South Korea’s Bank of Korea estimated last week that North Korea’s proxy GDP rose 3.9 percent in 2016, the fastest in well over a decade and this despite the sanctions. But a large question is how far the regime will let this go, given what is clearly a big drain on limited foreign exchange.  Grain imports also rose slightly in the second quarter but remain much lower than in the recent past, and may need to rise much more if the fall harvest turns out to be weak.  Some grain is provided by foreign aid agencies, purchased in China and shipped to North Korea, thus counting as a North Korean import in the trade accounts, but with an offsetting credit in the (unpublished)  transfers account.

William Brown is an Adjunct Professor at the Georgetown University School of Foreign Service and a Non-Resident Fellow at the Korea Economic Institute of America. He is retired from the federal government. The views expressed here are the author’s alone.

Illustration by Jenna Gibson, KEI.

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Target of New North Korea Sanctions Bill: Finances

By Phil Eskeland

(“That’s Where the Money Is.”[1])

Last week, the House of Representatives and the Senate overwhelming passed and sent to President Trump’s desk a new sanctions bill for his expected signature. The bill originally focused on Russia and Iran when it was first adopted by the Senate, but was expanded after bipartisan, bicameral negotiations to include sanctions provisions against North Korea as well.  With all the talk in Washington about the inability of different sides to work together, few issues unite more U.S. public policymakers on both sides of the political spectrum than getting tougher on North Korea.  Last May, the House of Representatives passed the Korea Interdiction and Modernization of Sanctions Act (H.R. 1644) by another overwhelming bipartisan vote of 419 to 1.  Essentially, this new sanctions bill – Countering America’s Adversaries through Sanctions Act (H.R. 3364) – takes almost every word from the House-passed North Korea sanctions bill to include it as part of Title III.

Much of the attention to this legislation has been directed at the first title of the bill affecting Russia.  The debate has primarily focused Congressional limitations on the flexibility given to the Executive Branch to implement the bill.  In the past, most sanctions-related legislation grants the President some discretion to waive or delay the imposition of sanctions, because the U.S. government may need flexibility in diplomacy and cannot wait for Congress to pass a bill to amend or end sanctions.  If there was any constraints on the Executive Branch, it was usually done when there was divided government (i.e., the Republican Congress passed the Helms-Burton Act in 1996, when Democrat President Bill Clinton was in office, that placed into statutory law many of the presidential Executive Orders affecting U.S. trade with Cuba, and thus cannot be unilaterally lifted or altered by the President without the consent of Congress).  It is interesting to observe a Republican Congress reasserting itself as a co-equal branch of government by imposing a series of constraints on the ability of a Republican president to unilaterally waive part of the sanctions against Russia.

However, any additional Congressional limitations on the President’s ability to waive or delay the imposition of these new sanctions do not affect the provisions of the bill dealing with North Korea, despite a last-minute effort by some Senate Republicans.  Nonetheless, the primary purpose of Title III of H.R. 3364 is to close loopholes and target new areas to deprive the North Korean regime of the money it needs to operate.  The fundamental philosophy behind the effort is to “cut off the Kim Jong Un regime’s access to hard cash” and “to restrict North Korea’s ability to engage in illicit trade.”

How does this bill accomplish these goals?  First, the legislation mandates sanctions against foreign persons who engage in five activities that have been identified as major revenue-generating activities for the North Korean regime – high-value metals or minerals, such as gold and “rare earths;” military-use fuel; vessel services; insurance for these vessels; and correspondent accounts, which are used in foreign currency exchanges to convert U.S. dollars into North Korean won.

Second, H.R. 3364 increases the discretionary authority of the U.S. government to impose sanctions on persons who engage in one or more of 11 different activities that generate revenue for North Korea, including those who import North Korean coal, iron, or iron ore above the limits set by the United Nations (U.N.) Security Council resolutions; who buys textiles or fishing rights from North Korea; who transfers bulk cash or precious metals or gemstones to North Korea; who facilitates the on-line commercial activities of North Korea, such as on-line gambling; who purchases agricultural products from North Korea; and who are engaged in the use of overseas North Korean laborers.

Third, there is a provision closing one loophole in the international financial system that would prohibit North Korea’s use of indirect correspondent accounts.  These accounts temporarily use U.S. dollars when converting one foreign currency into another, such as North Korean won.  The aim of this provision is to further cut off North Korea from the U.S. financial system and restrict the ability of the DPRK to conduct business with other nations.

Fourth, the legislation curtails certain types of foreign aid to countries that buy or sell North Korea military equipment in the effort to dry up another source of revenue to the regime.  Nations will have a choice: buy North Korean conventional weapons or receive U.S. foreign aid to help their people.

Fifth, H.R. 3364 augments sanctions that target revenue generated from North Korea overseas laborers who work under inhumane conditions.  It would ban the importation into the U.S. of any product made by these laborers.  The bill would also sanction foreign individuals who employ North Korean laborers.

The legislation also ensures that humanitarian aid destined for North Korea is not affected by heightened U.S. sanctions.  However, H.R. 3364 did not retain a provision in the original House version that contained an exemption for planning family reunification meetings with relatives in North Korea, including those from the Korean-American community meaning that family reunions will still be subject to sanctions.  In addition, the bill contains a reward for informants who report violations of financial sanctions on North Korea, in the hopes of increasing the government’s ability to enforce these sanctions.  Finally, it requires a report from the Administration within 90 days after the bill becomes law on the efficacy of putting North Korea back on the State Sponsors of Terrorism list. The debate over reinstating North Korea on the list was revitalized in light of the assassination of King Jong Nam, the exiled half-brother of the ruling leader of North Korea, at the Kuala Lumpur international airport in Malaysia using the VX nerve agent, a banned chemical weapon.

H.R. 3364 should not be seen as an end-goal, but as part of a continuing process of ratcheting up pressure on North Korea to denuclearize.  As this bill is implemented, North Korea will find new ways to evade sanctions.  Further legislation or action by other nations and the U.N. Security Council may be required to further clamp down on these loopholes.  However, the question remains unresolved if heightened sanctions from both the U.S. and the international community will produce the desired outcome – a nuclear-free Korean Peninsula – particularly before North Korea acquires the ability to launch a nuclear warhead on top of an intercontinental ballistic missile (ICBM) capable of reaching the mainland of the United States.   Sanctions are only as strong as its weakest link.  Thus, North Korea’s main trading partner, China, needs to do much more if it is to live up to its rhetoric that “they will strive for the complete, verifiable and irreversible denuclearization of the Korean Peninsula.”

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Image from Shawn Clover’s photostream on flickr Creative Commons.      
———-
[1] Response by bank robber Willie Sutton to the question as to why he robbed banks, January 20, 1951, edition of the Saturday Evening Post, “Someday, They’ll Get Slick Willie Sutton.”

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Drought in North Korea — What Should Be the Response?

By Robert R. King

Just a few days ago, the UN Food and Agriculture Organization (FAO) issued a report that North Korea is facing its worst drought in 16 years.  The report, prepared by the FAO in cooperation with the European Union’s Joint Research Center, concludes that the period April through June of this year was particularly dry, which has delayed planting and stunted plant growth in key crop-growing areas.  Food security in the DPRK has been precarious since the famine of the late 1990s and early 2000s, and now the UN agency is warning that “cereal output may decrease significantly.”

The other shoe that has yet to drop this year are floods.  North Korea frequently faces late summer monsoon rains and occasional typhoon rains in September that complicate farm production.  Because North Korean government policies limit private farming on good farm land in the flatter bottomlands, farmers end up over-cultivating hillsides.  Then when the late-summer rains come, they can accelerate the runoff, causing devastating damage to the hillsides through erosion.

The late August 2016 floods along the Tumen River on the northern DPRK border with China and Russia were caused by Typhoon Lionrock.  In North Korea, the floods killed over 500 people, left over 100,000 homeless, and did major damage to farmland in the area.  Flooding such as this is an all too common occurrence, and exacerbates existing food scarcity.

Unfortunately, food shortages in the North are not unusual.  Even in an average year, the country has to stretch to meet the food needs of its 25 million people.  The government provides only limited resources for agricultural inputs and equipment, farming methods are not the most modern or effective, and central planning generates further inefficiencies.  Some improvements have been made in recent years with better farming practices that reward individual efforts to encourage greater efficiency, but shortages are still serious.

In the 1980s, annual grain production (principally rice and corn) averaged around 8 million tons.  During the famine (1996-2003), annual production averaged 3 million tons, with some years considerably lower.  For the last five years, it has averaged just below 5 million tons.  Furthermore, gaps between regions and a poor transportation system make it difficult to adjust for regional differences.

The suffering of the North Korean people is certainly not their own fault.  They have little, if any, ability to influence the decisions of the tyrants that control their fate.  The food shortages are the responsibility of the regime.

In fact, the regime provides ample food and luxuries for the elite in Pyongyang, and the military leadership and elite military units will have sufficient food.  Resources that could provide much-needed inputs for agricultural production will be spent for nuclear and missile development and maintaining the military, and of course the supply of luxuries will continue to flow to the privileged.

Certainly UN agencies will appeal to member states to help North Korea. However, humanitarian assistance from the UN, particularly the World Food Program, will likely be difficult to secure.  There are great demands on UN humanitarian resources in other parts of the world right now, and in recent years special appeals to provide aid to the North Koreans have secured only limited help.  North Korea has lavished resources on missile and nuclear capabilities, despite the urgent humanitarian needs of its own people and the condemnation of its military actions by the UN Security Council.  Thus, aid to North Korea will be a particularly difficult case to make to elected political leaders.

In addition, the U.S. government is unlikely to be responsive.  A sharply divided Congress, preoccupied with healthcare, taxation, and other divisive domestic issues, will find it very difficult to support humanitarian aid to a country which has announced that its nuclear and missile programs are aimed at Washington.  Furthermore, the Trump Administration has indicated its intent to significantly cut back on all U.S. foreign assistance.

The new government of the Republic of Korea is likely to give the most serious consideration to the humanitarian needs of the North.  These suffering Koreans are their cousins, and many Koreans in the South have roots in the North.  In fact, Seoul has put forward an initial proposal for engagement with Pyongyang.  Based on previous experience, the North will likely expect to be paid to engage, and in the past humanitarian aid has been a place to start.

Another avenue for assistance in coping with the effects of drought is private humanitarian groups.  A good number of them are American Non-Governmental Organizations (NGOs), which have a good record and experience in aiding the North.  Unfortunately, these NGOs face serious difficulties raising funds.  These groups are well-organized and managed, do extremely good work, and have dedicated and compassionate leaders.  The DPRK, however, has become such an international pariah because of its nuclear and missile programs, its periodic provocations, and crude verbal outbursts that large and small donors alike are reluctant to be involved.

In considering a possible response by governments, international organizations, and private non-profit organizations to the growing signs of an impending food shortage in the DPRK, two considerations are important.

First, they must assess the need for help.  Our satellite imagery is remarkable, and we can make reasonable estimates about the extent of the need from afar.  But on-the-ground assessment is essential to determine the reality.  What crops and which regions are most affected?  What steps is Pyongyang taking to deal with this problem?  What are the transportation issues?  Does the North have the capacity to move aid from ports to affected areas?

Second, agreements must be reached to allow on-the-ground monitoring by designated representatives of the country or organization providing the aid.  In the past, South Korean and international organizations delivered food aid to the border or to the ports, and Pyongyang determined where the aid was sent.  Some was apparently sold on the black market and the payments may have helped fund the military. Other funds subsidized the lifestyles of the rich and infamous.  If aid is provided, foreign donors and the international community need to be assured that humanitarian assistance is going to those most in need.

The longsuffering North Korean people have limited alternatives for humanitarian help.  Unfortunately, the bad decisions and self-destructive policies of its own leadership, over which they have little or no control, make it very difficult to find help for them.

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America.   He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.

Photo from (stephan)’s photostream on flickr Creative Commons.

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Scratch North Korea from your Vacation Plans

By Mark Tokola

According to news reports, the State Department will soon publish a new regulation to ban Americans from visiting North Korea for tourism.  State Department spokeswoman Heather Nauert said on July 21, “Once in effect, U.S. passports will be invalid for travel to, through and in North Korea, and individuals will be required to obtain a passport with a special validation in order to travel to or within North Korea.”  It appears the special validation exception is intended to allow the small number of U.S. humanitarian workers to continue their work in North Korea.  There will be a 30-day period after the ban is officially published in the Federal Register before it comes into effect to allow time for Americans in North Korea to depart.

The State Department has made clear that the justification for the ban is “mounting concerns over the serious risk of arrest and long-term detention,” following student Otto Warmbier’s year-long detention in North Korea and his death on June 19.  Three American citizens continue to be held in North Korea.  The State Department has long cautioned against Americans travelling to North Korea because of the U.S. government’s inability to provide protective services in a country in which it has no Embassy or Consulate. But that has not dissuaded several hundred Americans from visiting North Korea every year, usually by means of European travel agencies that offer group tours.

Those who have advocated for a travel ban on North Korea have given reasons other than personal safety.  One is to deprive the North Korean government of the money it makes from tourism.  North Korea charges a great deal for the privilege of visiting their country, and that money goes into government coffers.  Advocates of a travel ban say that tourism revenue directly or indirectly supports both North Korea’s weapons programs and its pervasive system of human rights abuses.  Another reason for a ban would be to prevent North Korea from seizing hostages to gain diplomatic leverage against the U.S.  In the past, North Korea has released American prisoners only in exchange for visits by high-level, current or former U.S. government officials.

Opponents of a travel ban have argued that people-to-people contacts can help change how North Koreans see America.  Even casual contacts with North Koreans, under this theory, will help counter North Korean propaganda that all Americans should be seen as hostile war-mongers.  Some also oppose all U.S. government travel bans on the general principle that American citizens should have the freedom to travel where they choose; travel restrictions are an abridgment of civil liberties.  As a legal matter, the Supreme Court settled this question in the 1965 Zemel v Rusk decision when it upheld the State Department’s power to restrict the use of U.S. passports to travel to Cuba. A final reason to oppose a ban is that it could prove difficult to enforce.  If an American joins a travel group from outside of the United States, to what lengths would the U.S. government go to punish that individual?  How would it even monitor the travels of such individuals?

Beginning in 1968, U.S. passports included a list of countries to which the passport holder could not travel: North Korea, the People’s Republic of China, North Vietnam, and Cuba.  Those restrictions were eventually dropped and there currently are no countries which a U.S. passport holder is prohibited from visiting.  You will ask, “What about Cuba?”  In fact, the current U.S. bar on tourists visiting Cuba is not a State Department ban on using a U.S. passport to visit Cuba; it was a U.S. Treasury Department ban on making any payment to the Cuban government, which had the effect of making travel to Cuba virtually impossible for tourist purposes.  The Obama Administration eased those financial restrictions, but the Trump Administration is restoring some of them.  For more on travel to Cuba, see the Treasury Department’s FAQs from June 16, 2017.

In addition to the State Department’s ban on tourism for the purpose of protecting American citizens from the dangers of travel to North Korea, watch for the U.S. Treasury to impose its own restrictions on American payments to visit North Korea as part of the U.S. sanctions regime, along the lines of the Cuban restrictions.  Although this would seem redundant, it might aid in enforcement of the travel ban once it comes into effect.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo by KEI.

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A Conversation with Charlie Rangel, Former Congressman and Korean War Veteran

KEI President Donald Manzullo, a former member of the House of Representatives, recently interviewed Charlie Rangel, a former Congressman from New York and a Korean War Veteran, for the KEI podcast. Rangel was one of three current and former members of Congress who KEI recently honored for their service in the Korean War. The two former members discussed Rangel’s experiences during the war, his journey after returning from Korea, and his time in Congress.

The following is a partial transcript of that conversation. The rest of the episode can be found here.

Donald Manzullo: Charlie, we thank you for your service. You wrote a book called “And I Haven’t Had a Bad Day Since,” after the battle of Kunu-Ri – tell us about that battle.

Charlie Rangel: We got to Korea in August of 1950, and one way or another fought our way up past Pyongyang, and the Yalu River separated North Korea from Manchuria. General MacArthur had actually cut off the North Koreans, victory was ours, home was in our minds, and in September, October we were waiting to be home for Thanksgiving and Christmas. We waited September, we waited October, we waited November. The weather changed, our clothes didn’t. We were just waiting for that ship to call, to get there.

And we had heard that one of our guys … was captured by the Chinese. I started a rumor, it never entered my mind that there were really Chinese there. And for three days the entire 8th Army, including my outfit – the Chinese had crossed the Yalu River, they were talking to us with loudspeakers in broken English, telling us to surrender. Don, it was a nightmare, the trumpets would be blowing … and at nighttime, they would start their blasts.

That very day all hell broke loose, as tens of thousands of Chinese surrounded us and international troops, the screaming, the yelling, the killing. And I don’t know, I got shot and I got out of there. And like I said, I haven’t had a bad day since because so many … we had 90 percent casualties between those that were captured, killed, wounded.

And in telling this story, I just can’t see how I could be in love with anything that sounds like Korea except the Korea that’s there now. To believe that I had any part of creating a miracle for people I never knew, never heard of, a country I never thought was there – it makes me proud to be an American, and even prouder to see human beings like South Koreans who can come out of the ashes and become a world power economically.

Donald Manzullo: Charlie, your modesty – it’s always been a part of your life, even though you were one of the flashiest dressers in Congress. But during your time in Korea, you earned a Purple Heart, Bronze Star, Presidential Unit Citation, Republic of Korea Presidential Unit Citation, and three Battle Stars …. Your personal life is absolutely fascinating. Former Congressman, but you’re always a Congressman, high school dropout enrolls in the Army, goes to Korea, comes back home, trying to figure out what to do. The next thing you do is you go back and get your GED. Tell us about the march from the GED to the halls of Congress, Charlie.

Charlie Rangel: I never knew just how ignorant I was until I came out of the Army. I thought a couple of stripes made the difference the same way people get a couple of degrees. When I came out of the Army with all these medals you mentioned, pocket full of money, starched uniform, a couple of stripes, I must have felt like I was 10 feet tall until I went to get a job. They asked what could I do and I start talking about the M1 rife, the automatic carbine…and they said “next.” I was crushed.

And my brother was older, smarter, and so encouraging. He kept me from re-enlisting in the Army, which is what I was going to do. He got me a job at the garment center. I don’t know whether in your part of the country if you have hand trucks – two wheels, carry loads. And I’m carrying a load of lace – wasn’t heavy, just awkward – in the rain, and it slipped out of my hand in Manhattan in the rain, and cop’s cursing me out for blocking the traffic … I went straight to the VA, I told them “I don’t know what the hell’s going on, but I know I need some help.”

And I didn’t know how much help I really needed, I hadn’t completed high school. And the only reason I said I wanted to become a lawyer, which everyone thought was impossible, was because of my grandfather. I wanted to impress him, he was an elevator operator at the criminal court building of New York. He liked me, but he loved judges, he loved lawyers, and he loved the court system.

And I don’t know who laughed the loudest, the people at the Veterans Administration or my grandfather. But somehow we were able to work it out and I became an assistant U.S. attorney. And I got married to the most wonderful, understanding woman in the world – she had finished college while I was in high school.

Donald Manzullo: Well Charlie, I want to thank you for spending the day with us, for talking about old times.

Charlie Rangel: Well let me thank you Don. Like I said, Korea is a small country geographically, but it’s a country with a big, big heart in terms of giving hope to so many people whose countries historically have lived in poverty and never gotten out of it.

Image from KEI’s reception honoring Korean War Veterans in Congress. You can view the video of the event here

 

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The North Korean ICBM Test: A Significant Step, But Still Just a Step

By Mark Tokola

It usually takes some time to figure out the details of what a North Korean missile test has accomplished – what type of missile it was, how it performed, its capabilities – but from the initial information regarding North Korea’s July 4th missile test, it appears that they have successfully tested an Intercontinental Ballistic Missile (ICBM).

The accepted technical definition of an ICBM is a missile that can travel 3,400 miles. The North Koreans test fired their missile to fly a short range but with a high trajectory; it landed off the west coast of Japan. If the trajectory was flattened out, the missile in theory could have flown over 4,000 miles, enabling it to reach Alaska but not the lower 48 states.

Conducting an ICBM test is a significant step in North Korea’s weapons program, but it is just a step. Kim Jong-un’s stated objective is to develop a reliable ICBM that can carry a nuclear warhead to the American homeland. The July 4th missile did not demonstrate that kind of range, and there is no evidence (yet) that North Korea has a nuclear warhead that could be carried by an ICBM. We shouldn’t downplay the significance of this test, but calling it a “game changer” may be an overstatement.

The true importance of the July 4th test is the timing – following a series of other missile launches in 2017, it is clear that North Korea is not slowing the pace of its quest for nuclear weaponry that can threaten the U.S. Further, Kim Jong-un has crudely described it as a “gift for the American b******ds,” implying it was timed for Independence Day. The language choice shows that the North Korean regime sees no hypocrisy in using such language about other countries while having a hair-trigger sensitivity to slights to its own national dignity. The test also comes on the eve of a G20 meeting, demonstrating North Korea’s desire to be in the international limelight.

Perhaps the most important fact about the timing of the North Korean ICBM test is that it comes on the heels of the first visit of new South Korean President Moon Jae-in to Washington, where he spoke clearly of his desire to engage North Korea in dialogue. If North Korea had any interest in demonstrating an openness to President Moon’s overture, it would not have conducted an ICBM test only days after President Moon’s public remarks. We should all hope that North Korea would be responsive to a South Korean initiative to defuse tension, but the July 4th test makes it hard to believe that there is any basis for that hope. North Korea seems unresponsive to China’s efforts to defuse tensions, and even less so to South Korea’s initiatives. North Korea seems single-mindedly focused on trying to acquire a reliable ability to credibly threaten the United States with a nuclear attack — truly a high stakes gamble on North Korea’s part.

Still, it is not too late for a diplomatic solution. That would be in the best interest of South Korea, China, Russia, Japan, the United States – and even for North Korea. That diplomatic path may be narrowing, and it will only be possible if South Korea, China, Russia, Japan, the United States, and others are able to maintain a common front against North Korea’s nuclear ambitions. There is some evidence that sanctions are beginning to bite – which may be also be contributing to Kim Jong-un’s rush. As the world’s leaders gather for the July 7-8 G20 summit in Hamburg, watch for signs of unity or division to see how the international community may handle this growing threat.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from Stefan Krasowski’s photostream on flickr Creative Commons.

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Dennis Rodman and “the good side” of North Korea

By Robert R. King

Former NBA star Dennis Rodman made his most recent visit to North Korea at the same time American college student Otto Warmbier was medically evacuated to the United States after being imprisoned there for the last 17 months, and during the last 14 of those months he was in a state of “unresponsive wakefulness.”

Rodman was interviewed about his trip by ABC News on June 23—the day after Warmbier’s funeral.  In defending his latest visit to North Korea, he complained “people don’t see . . . the good side about that country.  It’s like going, like, to Asia.  It’s like going to like Istanbul, Turkey, or any place like that.  It’s pretty much just like that.  You know, you going to see some poverty.  You’re going to see some people that’s not doing too well.”

It may be that the former NBA star doesn’t see some aspects of life in the North that others see.  It may be that he doesn’t see because he doesn’t want to see, and the North Koreans are certainly not calling his attention to their well-known problems.

Rodman’s very first visit to Pyongyang began February 26, 2013.  On this first visit, he met Kim Jong-un and sought to promote basketball.  Rodman sang Frank Sinatra’s “My Way” to the young leader and told a crowded basketball arena:  “But for me, and your country, you’re a friend for life.”  Rodman arrived in Pyongyang on that visit just 11 days after North Korea conducted its third nuclear test—the first under Kim Jong-un.  Rodman may not know it, but North Korea is the only nation in the world to conduct nuclear tests in the 21st century, and in the last 11 years North Korean has tested five such weapons.  It is clear that their target is the United States since North Korean propaganda video show Washington under a mushroom cloud.

The basketball star made his second visit to DPRK in September 2013.  His purpose was to promote basketball, and he and Kim Jong-un spent time jet-skiing, horseback riding and sailing on Kim’s yacht.  Rodman held Kim Jong-un’s new daughter, and informed the world, “He’s a good dad and has a beautiful family.”  In the rest of the world, the most important news of that summer was the United Nations Human Rights Council’s decision to appointment of three distinguished judicial and human rights authorities as a Commission of Inquiry to investigate human rights abuses in North Korea.  The Commission later concluded that the North Korean government is committing systematic human right abuses at a scale “without parallel in the contemporary world,” including extermination, enslavement, rape, forced abortions, and brutal prison camps.

In December of that year, Rodman made a brief visit to Pyongyang to make final arrangements for his January 2014 visit for the gala birthday celebration of Kim Jong-un that was being planned.  That visit came at about the same time that Kim Jang-un executed his Uncle Jang Song-thaek, and the arrest just days before the execution took place at a communist party meeting that was broadcast on national television.  In North Korea public executions are common, and in some cases, anti-aircraft artillery is used for the executions.

The fourth Rodman trip to North Korea came in January 2014.  This was the occasion for the celebration of the birthday of Kim Jong-un.  Rodman brought twelve former NBA players with him for the basketball game that was played as part of the festivities.  During the celebration, Rodman sang “Happy Birthday” to the leader to a packed basketball arena.  That was the occasion for Rodman’s interview with CNN which raised questions about American citizen Kenneth Bae.  This American had been imprisoned in North Korea for well over a year at that time for bringing information inadvertently into the DPRK on a computer hard drive while leading a tour group to the country.  Rodman lashed out “If you understand what Kenneth Bae did …. Do you understand what he did in this country?  Why is he held captive in this country?”  Bae was finally released ten months later after U.S. Director of National Intelligence James Clapper went to Pyongyang.  Bae graciously suggested that the furor over Rodman’s CNN interview may helped his release, however, I have seen no evidence at all to indicate that it had any impact.

Rodman’s fifth and last visit, thus far, came just a couple of weeks ago.  On this trip, he met with the Minister of Sport, but he did not see his “friend for life” Kim Jong-un.  He arrived in the North Korean capital at about the same time that Ambassador Joseph Yun was there with medical personnel to medivac American citizen Otto Warmbier to the United States.  Rodman had nothing to say about the American student for the previous 17 months that he was held in the North, but he claimed credit for the release after returning to the United States.

Here again it is hard to “see the good side” of a country that arrests a visitor for taking a framed propaganda slogan off the wall and sitting it on the floor.  Even if there was intent to take the poster, it hardly merits a fifteen year prison sentence.  But even more, medical test data on Mr. Warmbier given to American officials by North Korean medical authorities was date stamped April 2016.  He was in the state of “unresponsive wakefulness” for 14 months.  The North apparently retained him in the hope that he would recover and only released him after this length of time when it appeared likely he would not.

Is the “good side” of North Korea evident in the statement issued by the Foreign Ministry a few days ago that the DPRK was the “biggest victim” in Mr. Warmbier’s illness, which occurred when he was being held incommunicado in their custody?

Dennis Rodman’s claim that “people don’t see . . . the good side about that country” suggests he has a very limited understanding of the reality of life in the DPRK.  Yacht trips, horseback riding, karaoke, cheering adoring crowds—these are are not the reality of North Korea.  A quick look at what was really happening at the very times that Rodman was in Pyongyang gives a dramatically different picture.  

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America.   He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.

Photo from OPEN Sports’ photostream on flickr Creative Commons.

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The Son of Refugees who Became President of the Republic of Korea Visits D.C.

By Seung Hwan Chung

On December 19 1950, the SS Meredith Victory, a 7,600-ton merchant marine vessel, was about to leave from the North Korean port city of Hungnam. Hundreds of thousands of refugees flocked to the pier at Hungnam as the bombing of the Chinese army came closer. Leonard Larue, a U.S. Navy captain, made the decision to abandon almost all of the arms and military supplies from the ship and took on 14,000 evacuees in an operation code-named “Christmas Cargo.”

The parents of Moon Jae-in and his older sister were among the 14,000 refugees who fled aboard the Meredith Victory, arriving on Geoje Island in Gyeongsang Province on Christmas Eve. Moon Jae-in was born two years later on Geoje Island in January 1953. Thus, the son of a refugee from Hungnam became the 19th President of the Republic of Korea thanks to this successful rescue operation called the Hungnam Evacuation, which is credited by the Guinness Book of World Records as the largest transportation of evacuees in history.

In the lead-up to the evacuation, the 3rd U.S. Division was advancing northward from Wonsan to assist UN and South Korean forces trapped near the Chosin Reservoir. After losing Wonsan, the 10th U.S. Army Corps and the 1st Korean Army Corps had to withdraw to the sea as their retreat path was blocked, leading them to the port city of Hungnam. The first unit that withdrew from Hungnam was the 3rd Korean Division, followed by the 1st U.S. Marine Division.

According to the Korean Ministry of Patriots & Veterans Affairs, the Battle of the Chosin Reservoir is recorded as among the most brutal battles in the history of the U.S. Marine Corps. During the Battle, 15,000 U.S. marines fought through 120,000 Chinese soldiers in the extreme winter cold of -22 to -40 degrees Fahrenheit. As a result, 4,500 U.S. marines died and 7,500 were wounded.

President Moon Jae-in remarked on his family’s story at a reception for Korean War Veterans on  June 23, 2017, saying, “Today we are joined by the heroes of the Battle of Chosin Reservoir and the Hungnam Evacuation from North Korea. These two historic occasions became well known even to postwar generations in Korea who did not experience the war. The son of a refugee from Hungnam could become the President of the Republic of Korea and join you all today. I hope this fact helps make the Korean War veterans of the U.N. Forces feel a sense of delight and reward.”

President Moon Jae-in is scheduled to make a visit to Washington D.C. from June 28 to July 1 for his first summit meeting with U.S. President Donald Trump. As his first stop in the United States, he visited the new memorial for the Battle of the Chosin Reservoir at the National Museum of the Marine Corps in Quantico, Virginia on June 28. There, Mr. Moon laid a wreath before the memorial that commemorates the Korean War battle which enabled the evacuation of civilians.

The “Star of Koto-ri,” a symbol of the battle, is on the top of the monument. U.S. Marines started to wear the star to commemorate the bright stars they saw after a snowstorm before succeeding in the evacuation.

President Moon will also visit the Korean War Veterans Memorial in Washington D.C. along with Vice President Mike Pence, whose father was a Korean War veteran who was awarded a Bronze Star Medal for his service.

Additionally, Foreign Minister Kang Kyung-wha remarked on the Hungnam Evacuation during her visit to the U.S. 2nd infantry division base in Gyeonggi Province, stating “President Moon will invite Korean War veterans who participated in the Hungnam Evacuation” to the White House during the summit.

President Moon’s visit to the United States will lay the foundation for further upgrading South Korea-U.S. relations. The fact that the new Korean president is highlighting his family history and making a point to thank Korean War veterans throughout the trip can make the summit even more meaningful. Through the visit, the two heads of state can share a vision for further developing the Korea-U.S. alliance into an even greater one.

Seung Hwan Chung is a reporter with the Maeil Business Newspaper and a visiting fellow with the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Image from USMC Archives’ photostream on flickr Creative Commons.

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A Conversation on THAAD from the Chinese Perspective

KEI Communications Director Jenna Gibson, host of the KEI podcast Korean Kontext, recently interviewed Yun Sun, Senior Associate with the East Asia Program at the Stimson Center,  about the Chinese perspective on the THAAD missile defense system.

 The following is a partial transcript of that conversation. The rest of the episode can be found here.

 Jenna Gibson: Can you start by giving us kind of the big picture here from Chinese perspective? Why are they so opposed to that and how serious are they about trying to stop this deployment?

Yun Sun: Well, the Chinese explanation is that they believe this is a military threat to China’s nuclear capability. It’s because the radar could reach as far as 2,000 kilometers, so the Chinese view that their military deployment and their military exercises, basically any military operations inside mainland China, will not be able to escape the radar that the THAAD system will encompass, so they feel vulnerable. So, there is a security argument there.

There’s also a political argument where the Chinese argue that they see this as an effort by the United States to reinforce and re-strengthen their alliance relations with South Korea. And even with the possibility of the integrated missile defense system in Northeast Asia, the United States is intending to create a Northeast Asia NATO against China. That is a political dimension.

There is also an interesting leadership dimension. If you look at President Xi Jinping’s policy towards the Korean Peninsula since his inauguration in 2013, it is a very interesting shift as Xi Jinping had been trying to pull South Korea closer to China. So, there had been a deterioration of relations between China and North Korea, but at the same time, what forms a sharp contrast to that is a warming or rapprochement between Beijing and Seoul. So it’s almost like Xi Jinping’s personal foreign policy achievement that under him, South Korea has become much closer and much friendlier towards China. So, this THAAD deployment must have been very disappointing for the top Chinese leader, that this is his creation, his baby, and his campaign, and now it’s not coming to a good result.

Judging from the economic sanctions that Beijing has been willing to impose on South Korean, not only government, but primarily South Korean companies. I’d say that the Chinese are very serious about punishing South Korean entities for the deployment of THAAD. That represents Beijing’s determination and their seriousness to stop the deployment. But, I also think they understand that at this point, budget has already been allocated, the land has been secured, and the deployment has started. So, they have to understand that this is going to happen with or without their support or sanction.

 Jenna Gibson: So, things have seemed to come to a bit of ahead in a week or so with China allegedly cracking down on streaming of Korean TV shows, going after Lotte department stores, and possibly banning travel agencies from selling trips to Korea. Why has China seemingly stepped up their economic pushback against the missile defense system?

 Yun Sun: The timing is because the deployment is finally going to happen materially. In the past, although the decision to deploy the THAAD system was made almost last summer, it was a political decision. So the Chinese have been persistently using different policy instruments, trying to change the calculus, change the decision by the South Korean government. So, I would say that until the deployment is completed and until the South Korean government tells Beijing unequivocally that the decision is permanent and is final, the Chinese will not stop pushing. So before the deployment is completed, Beijing will keep pushing.

 Jenna Gibson: So, I have a personal theory. I think that China is killing two birds with one stone here. They are seizing upon an opportunity to cut down on the popularity of Korean pop culture in China, which Beijing has been upset about it for years. What do you think about that? Is this more than just the missile defense system?

 Yun Sun: If you look at how the Korean pop culture had been received and perceived in China by the Chinese government, you will find this interesting distinction that basically under President Lee Myung-bak, Korean pop culture was regarded as almost toxic in China. But, we will have to assume that this was very closely linked to the judgment that President Lee Myung-bak was pro-U.S. and anti-China.

Then, under President Park, the Chinese government policy towards Korean pop culture was actually quite positive. You’ll see Korean pop stars appearing on the Chinese New Year’s Festival gala on the Chinese Central Television, which is quite a high prominent treatment for foreign movie actors or pop stars.

So, I would say that the Chinese attitude towards Korean pop culture is still very much related to the political climate between the two countries. When the political relations are good, the Chinese are more likely to treat Korean pop culture with positive reception. But, when the political relations are bad, you will see that there is almost a ban for any Korean soap operas on Chinese TV today.

  Jenna Gibson: I will be really curious to see the things go forward, you know, how much are the Korean companies, how much is k-pop, how much are Korean dramas affected going forward? Is there any pushback? I’ll be really curious to follow that.

 Yun Sun: Yeah, so far, we haven’t seen that much of a pushback from the Chinese general public. You see this anti-Korea demonstrations in some of Chinese cities as well. You also see that one point, Korean cars were pretty popular in China, and now there are people who are vandalizing Korean cars on the street. So, what that says is the government’s ability to influence the public opinion on these matters is really strong.

There’s also the fact that local governments would assume that the central government want to see this anti-Korea sentiment bubbling from their locale. So sometimes, the central government may not be behind certain movement against a certain Lotte supermarket. But, a local government might be.

  Jenna Gibson: Now that the U.S. is clearly in the middle of this, too. We are the ones who are deploying THAAD and of course we are close allies with South Korea. So, what advice would you give to the United States in this situation? Is there a way to work with China on the North Korean issue right now? I know President Trump has been really emphasizing that China peace in solving the North Korean problem. Do you think that that’s the right way to go?

Yun Sun: I think the U.S. is doing the right thing. The deployment of THAAD is not about China, it is about North Korea. And if China doesn’t like it, it must address the source of the problem, which is the North Korean nuclear provocation. So, I think the U.S. is absolutely doing the right thing here.

And for the Trump administration, the U.S. does have this first mover advantage. After the Taiwan controversy, the Tsai Ing-wen phone call, and after President Trump’s comments in the past about how he is going to punish China on trade and is going to negotiate with China for a good deal, I think the Chinese are put on alert. They are very sensitive about what the U.S. might do to China next. And they are not in a very confident position to challenge President Trump. So that almost gives President Trump and his administration an edge, an advantage over China’s policy because China does not want to start a fight with the Trump administration either over North Korea or over the South China Sea.

So, I feel that there is room for the U.S. to push China. For example, there have been talks about more sanctions on North Korea, so China already preempted that. We are already suspending our co-import from North Korea for the rest of this year. What else do you want? You have to be very specific. If you ask us to cut our aid, especially the energy transfer and our food supply to North Korea, the United States will have to answer difficult questions like — what if this creates a humanitarian disaster in North Korea. So, I think the United States has to be very specific about it wants China to do and stand ready to answer the counter-questions that the Chinese will raise.

KEI Intern Jennifer Cho assisted with transcribing this interview.

Image from USFK’s photostream on flickr Creative Commons.

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About The Peninsula

The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.