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  CHINA AND THE FUTURE OF THE KOREAN PENINSULA
by Bradley O. Babson
[Formerly of the World Bank and Consultant on Asian affairs]

posted Auguest 19, 2003



Preface : This article was originally published in National Strategy Review and appears on the National Strategy Forum website. It is reprinted here with permission from both the author and National Strategy Forum.

http://www.nationalstrategy.com/Summer%20NSFR%202003/China%20Korean%20Peninsula.htm
Article :
The critical role that China played in bringing the U.S. and the Democratic Peoples Republic of Korea (DPRK) together for initial talks in Beijing in April 2003 is a harbinger of the future. This revealed the reality that China must play a proactive and not acquiescent role in creating an environment of cooperation towards finding solutions to the complex set of issues involved. China cannot avoid this role, and the U.S. cannot avoid adopting a strategic partnership with China in managing the global and regional dimensions of change on the Korean peninsula. This article will examine China¡¯s relations with the two Koreas, explore the underlying forces driving China and the U.S towards this strategic partnership, and assess implications for future U.S. policy in Northeast Asia.

China and the Two Koreas

Chinese policy towards the two Koreas underwent a fundamental change in the early 1990¡¯s, reflecting a shift in the underlying structure of relationships that had remained stable since the end of the Korean War. The sequence of events leading up to this shift is important:
* September 1990 -- the Soviet Union and the Republic of Korea (ROK) established diplomatic relations.
* September 1991 -- DPRK became a member of the United Nations in its own right, representing a de facto recognition by the international community of the two separate Korean states.
* December 1991 -- The Agreement on Reconciliation, Non-Aggression, Exchanges and Cooperation (Basic Agreement) was signed by the two Koreas.
* February 1992 -- The Joint Declaration of De-nuclearization of the Korean Peninsula was signed by the two Koreas.
* August 1992 -- China and ROK normalized relations.
* December 1992 – The Soviet Union disintegrated.

The formal recognition of ROK, coupled with a period of warming relations between the two Koreas and UN acceptance of the two state framework, anchored China¡¯s shift to active relations with both Koreas. The collapse of the Soviet Union created major complications for this new set of relations, as DPRK lost both political and economic support from the Soviet Union and was forced to rely increasingly on China as its benefactor, just when China was pulling back from its traditional role through warming ties with ROK and hardening of terms of economic assistance to DPRK. The nuclear and food crises that followed in the mid-1990¡¯s tested China¡¯s new policy of even handedness. The U.S. took center stage through the negotiations that led to the Agreed Framework, and inter-Korean reconciliation was put on the back-burner. This led to a situation where China¡¯s role came to be dominated by efforts to maintain stability through expanded economic support to the failing DPRK system and encouragement of ROK to continue to pursue a policy of engagement with DPRK. Relations with the U.S. on DPRK remained awkward for both countries, but bound by a shared desire to seek a peaceful outcome that was reflected in cooperation for the Four Party peace talks that took place in a fitful way in the late 1990¡¯s.

In recent years China¡¯s relations with ROK have deepened considerably. China is now ROK¡¯s largest trading partner and the trend is for accelerating trade and investment ties following China¡¯s accession to the World Trade Organization (WTO). Beijing has also worked closely with ROK both openly and quietly to manage expanding bilateral relations and sensitive aspects of relations with DPRK, including the ongoing need for food aid and increasing flow of refugees.

The expansion of Chinese-ROK ties also are having an affect on public opinion in ROK, with attitudes towards China becoming increasingly favorable at the same time that attitudes towards the U.S. are becoming more negative. There are many factors affecting shifts in public perceptions, but among them is the realization that ROK has a growing stake in its future relations with China and that it is in the Korean interest to balance this perception with future relations with the U.S.

Chinese relations with DPRK have been strained in recent years, but have retained the essential characteristics of DPRK dependence on Chinese political and economic aid to maintain the viability of the DPRK regime, which has been faced with great external and internal pressures for change. DPRK¡¯s decision to establish an industrial enterprise zone in Shiniju in 2002 and appoint a Chinese businessman with questionable credentials as the administrator, and the Chinese response of placing him under house arrest for tax evasion, illustrates the lack of close coordination of DPRK and Chinese policy.

China¡¯s active courting of ROK and continued willingness to buttress the DPRK regime, despite embarrassing North Korean behaviors, are consistent with its larger national security objectives. In order to counter post Cold War dominance by the U.S., China adopted in the late 1990s a ¡°new concept of security¡± in which it embraced regional security dialogue and cooperation. It has pursued this policy actively with the Asia Regional Forum sponsored by ASEAN, and the Shanghai Cooperation Organization, which it helped create with Central Asian countries. In Northeast Asia, this tactic has been reflected in the pursuit of the two Korea policy.

Looking ahead, China can be expected to retain an honest broker relationship with the two Koreas, respecting the legitimate interests of each and seeking peaceful means to advance inter-Korean reconciliation, regional stability and increased economic ties. The recent change in Chinese leadership is also likely to lead to a hardening of Chinese intolerance for DPRK misbehaviors, even if there is no shift from the fundamental policy of not permitting the regime to collapse. The fact that China recently felt compelled to cut off temporarily oil pipeline flow to DPRK to constrain potential actions that would escalate tensions with the U.S. in the wake of the Iraq war, can be interpreted as a recognition and signal that the new leadership is prepared to act to reinforce its views on DPRK behavior.

Driving Forces Towards a Strategic Partnership with the U.S. on Korean Issues

The nuclear crisis that was triggered by DPRK¡¯s admission of a clandestine uranium enrichment program in October 2002 spelled the effective end to the Agreed Framework, which had excluded China as a partner in containing DPRK¡¯s nuclear program. U.S. recognition that a multilateral rather than bilateral dialogue process would be needed to forge a viable replacement for the Agreed Framework, was a tacit acceptance that China¡¯s influence on the Korean peninsula should be harnessed to achieve shared goals through active collaboration on the security agenda. This new working relationship has fundamentally altered the dynamics for managing the crisis and can be expected to be a major factor in future handling of Korean issues.

The need to contain the nuclear crisis is the primary reason that China has taken a more proactive role in international efforts to resolve Korean issues. China¡¯s interests are both short-term and long-term and its behavior is guided by both. In the short-term, China wants to maintain stability and avoid military confrontation over the nuclear issue while aiming for a negotiated solution. It also wants to minimize overflow problems of the breakdown in DPRK and create an environment supportive of a managed change process. Longer term, China would like to see a nuclear free Korean peninsula, a reduced military presence by the U.S., maintenance of a two state framework of peaceful coexistence between the two Koreas with a gradual process of re-integration, and a reform process for DPRK that reduces direct dependence on China while DPRK becomes increasingly integrated in regional economic and security relationships that are consistent with maintaining stability and expanded cooperation among the countries of the region.

The U.S. has accepted global responsibility for leadership in combating terrorism and proliferation of weapons of mass destruction. The success of the wars in Afghanistan and Iraq have convinced the world that the U.S. will not shirk these responsibilities, and the main question for the future is how this leadership will be exercised. These developments have not fundamentally altered the equation of interests and objectives of containing DPRK¡¯s nuclear program, but they have altered perceptions of U.S. priorities and methods of achieving these objectives. This has consequences for the way the U.S. manages its relations with both Koreas and creates a new rationale for a continuing active policy towards the two Koreas that supercedes the old and now defunct Cold War rationale. For its part, China recognizes that it must accept U.S. leadership on the post Cold War global agenda, while at the same time it seeks to constrain potential expansion of U.S. hegemony and methods that are incompatible with China¡¯s own interests. In dealing with DPRK, this requires that China actively collaborate with the U.S.

Longer term forces are active as well. A transformation process for DPRK aimed to integrate DPRK into the international community will require that new forms of regional security and regional economic cooperation be devised to reinforce the dynamics of managed change on the Korean peninsula. The architecture of conventional security structures based on Cold War alliance frameworks will need to give way to a new order in Northeast Asia. This will have to be buttressed by improved institutional mechanisms for regional economic cooperation. Anchoring the solution to the DPRK issues in these new regional cooperation mechanisms would both be consistent with China¡¯s ¡°new concept of security¡± and with the U.S. view that a multilateral framework will be needed to ensure that DPRK does not shirk its transformation process and revert to old ways. The new administration of President Roh in ROK has already embraced the idea of regionalism as the future path for Korean security and prosperity. If this vision is to become reality, Chinese willingness to provide more proactive regional leadership will be essential. Support and encouragement from the U.S. will also be required, both in aligning future Asian security policy and deployment of the U.S. military in Northeast Asia with these new frameworks, and in active participation in the economic agenda.

Implications for Future U.S. Policy in Asia

One implication for the U.S. of expanding cooperation with China on Korean issues is that the informal alliance structure with ROK and Japan will need to be realigned to embrace this reality. The Trilateral Coordination Group (TCOG) that was established during the Clinton Administration to coordinate policy towards DPRK between the U.S., has been an important mechanism to smooth differences in perception and approach to engagement with DPRK, even though the driving interests of the three countries do not completely coincide. Finding a way to broaden the consultation framework to include China, rather than relying solely on bilateral meetings with China by the three alliance countries would seem to be a desirable direction for the future.

If a nuclear agreement can be successfully negotiated with DPRK, then verification of compliance will be an important and long-term requirement. Chinese participation in a future verification arrangement would be one way to help ensure DPTK compliance and reduce the risk of nuclear materials being shipped over the DPRK-Chinese border for potential sale to other parties.

Another issue is the future of the Korea Peninsula Energy Development Organization (KEDO). Neither China nor Russia are members of KEDO. If KEDO will be given any new role in the future as a result of a negotiated solution to the DPRK nuclear crisis, it would be desirable to include both countries in a multilateral effort to deal with DPRK¡¯s energy needs, using this mechanism to forge a link to regional economic cooperation in energy.

More broadly, U.S. policy towards Northeast Asia in the future should be guided by a desire to promote long term stability in the region, based on increased transparency and expanded interdependence in security and economic relations. American economic interests should be pursued with an eye to expanded trade and investment opportunities driven by regional and not just globalization dynamics. Building an environment in which China¡¯s rise to power and exercise of leadership can be congruent with U.S. security and economic interests is the major policy challenge facing the U.S. in Asia. Putting a process of transformative change on the Korean peninsula into this framework would anchor U.S. Korea policy in the larger agenda to promote peace and prosperity in this critically important region.

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