China and the Korean Peninsula: Playing for the Long-Term

By Professor David Shambaugh

George Washington University
The Brookings Institution
The Woodrow Wilson Center

Working Paper prepared for the Task Force on U.S. Korea Policy, sponsored by the Center for International Policy and the Center for East Asian Studies of the University of Chicago, Washington, D.C., January 9, 2003

I. The Latest Crisis in Perspective

Not for the first time since the Chinese Communists came to power in 1949, they find themselves again in a difficult international quandary over the behavior of their erstwhile comrades in North Korea. Ever since Kim Il-sung's forces invaded the south in 1950, China has repeatedly found its own national security interests affected and compromised by the provocative and confrontational policies pursued by the Kim dynasty and Pyongyang regime. The current crisis over North Korea's breakout of the 1994 Agreed Framework and its resumption of nuclear weapons program is, from Beijing's perspective, only the latest chapter in a half-century of North Korean brinksmanship brought on by domestic desperation and disregard for its neighbor's interests and preferences.

While the latest crisis is considered a most serious situation in Beijing, permanently short-circuiting Pyongyang's nuclear ambitions is only a piece of a larger and more complicated puzzle. Despite China's strong and long-stated policy in favor of a non-nuclear Korean peninsula,* for China, halting North Korea's nuclear program is not the ultimate end to be achieved. As this paper attempts to elucidate, China's calculations, interests, and ultimate goals are more long-term and complicated.** As Allen Whiting and Alexander George taught us fifty years ago, understanding Beijing's thinking viz North Korea requires an appreciation of the idiosyncrasies and insecurities of the Chinese regime as well as China's cultural-historical relations with Koreans.

For the United States, and the purposes of this Task Force on U.S. policy towards the two Koreas collectively, it is essential to understand that China's preferences, goals, strategy, tactics, and time horizon are intrinsically different from the United States (at least the current Bush administration). This is not to say that Beijing and Washington's approaches do not coincide on occasion. Indeed they have in the past and do at the present in several key respects. The two governments have often pursued parallel and reinforcing policies, when coordinated bilateral cooperation has not been possible. In the current crisis, U.S.-China communication on the DPRK nuclear issue has been quite intensive, including at the presidential level. Yet, one should not assume-and the Bush Administration would be badly mistaken to believe-that China's goals are identical with America's in the current crisis.

II. China's Endgame

In my view, China's policy calculus towards the DPRK-both in general and in the current crisis-involves a hierarchy of several interrelated factors. The first is regime survival. The second is regime reform. The third is to maintain and continually build comprehensively robust relations with South Korea. The fourth is to have the dominant external influence over the peninsula (North and South). The fifth is a preference for a phased economic and social integration of North and South, leading over time to political unification. The sixth is a North Korea that acts in a non-provocative and responsible manner on security issues-ranging from its nuclear weapons program, to proliferation of WMD and their means of delivery, to the deployments of DPRK conventional forces.

It is important to recognize that this "hierarchy of calculus" is not an embrace of the status quo on the peninsula. Many analysts argue that China prefers the status quo to regime change. In my view, this is not, in fact, the case. While China may favor the status quo to regime collapse, this is not its preferred future for the DPRK. China does not believe that the current situation on the peninsula or in the DPRK is stable or conducive either to regional stability or China's own national security. Enhancing stability is critical to China's own economic growth and national interests. Consequently, China advocates a comprehensive policy package to set North Korea on the path of real reforms that involve it intensively with all of its neighbors in Northeast Asia and the United States. For China, the issue is not simply whether the DPRK develops a nuclear weapons capacity or will have a soft or hard landing from its current catastrophic state-but whether it can embark on a sustained and comprehensive path of reform a la China. This is Beijing's positive vision for North Korea. (A less positive vision involves more incremental reform). Understanding this long-term vision/goal is central to understanding the other component parts of China's strategy and tactics.

Let us briefly examine the six factors in China's "hierarchy of calculus."

1. Regime Survival
Most fundamentally, Beijing seeks to avoid the implosion/collapse of the DPRK regime and nation-state. However, this is not necessarily the same as seeking its survival in its current form. Regime collapse would have enormous tangible human and economic consequences for China, as well as the intangible effects of another failed communist party-state. It would also have certain potential negative consequences for China's security.

This is not to suggest, though, that Beijing likes the regime that it sees and must deal with in Pyongyang. Quite to the contrary, Chinese officials and North Korea analysts in Beijing and Shanghai sometimes speak with disdain, despair, and a high degree of frustration when discussing the DPRK and China's relations with it. These criticisms deplore the sycophantic cult of personality around the Kim dynasty, the Stalinist security state, the command economy, the poverty of the populace, the distortion of scare resources for military purposes, the mass mobilization techniques of the regime, the autarkic paranoia about world beyond its borders, etc. These analysts also draw explicit parallels to Maoist China (particularly during the Great Leap Forward), and argue that North Korea's only option to national suicide is to follow China's reformist example.

As part of its "regime survival" strategy, Beijing deals with the DPRK government as it must, and extends aid in the form of foodstuffs and energy supplies to alleviate public suffering. High-level Chinese visits to Pyongyang are rare, although (as noted below) visits by Kim Chong-il and other DPRK officials to China are rising. Military exchanges occur between PLA officers in the Shenyang Military Region and their counterparts across the border, and occasionally at higher levels. Such meetings usually note the "friendship cemented in blood" between the two countries, but the sheer propagandistic pabulum that accompanies such visits, and the paucity of such exchanges, are indications of the formality and frostiness of ties.

Another irritating issue in the relationship has been cross-border migration, which has received international attention over the past year as North Korean migrants make brazen attempts to enter diplomatic compounds in China to seek diplomatic asylum in South Korea or elsewhere. While these forays into diplomatic compounds in Beijing and Shenyang have caused China to dramatically step up security around embassies, but it has also caused Beijing international embarrassment (particularly in the few instances when Chinese People's Armed Police violated international law by entering some compounds to capture the migrants). Yet China has had a hand in facilitating the cross-border migration, and the government seems to recognize that the migration is a kind of safety valve for the Pyongyang regime. Contrary to the view that China has sealed the border with North Korea and returns migrants to North Korean authorities (for incarceration), the situation is actually more complicated. China not only seems to tolerate cross-border migration, but helps to facilitate it. Chinese smuggling rings and bribery operate openly in the border region. An unknown number of migrants (particularly of ethnic Korean Chinese) go to work in Chinese factories, where they are paid a fraction of the wages paid to a Chinese laborer (not high to begin with), thus increasing the enterprise's profit margin. Women migrants have also been sold into prostitution or to Chinese husbands. When migrants are caught and returned to North Korea, there is evidence that they are simply subjected to a thirty-day reeducation program (even for multiple offenders) rather than being harshly treated.

On balance, China has been critical in keeping the North Korean regime afloat and the North Korean population from a full-fledged and catastrophic famine. The Chinese government calculates that it is in its national interests to do so-both because the burden on China of a regime implosion would be far heavier, and because it is a half-step towards its preferred strategy: real reform.

2. Regime Reform
Beijing is probably the strongest external advocate of extensive economic and social reform in North Korea. China calculates that reforms do not necessarily bring about the collapse of the regime, as was the case in the USSR and Eastern Europe, but they can also-if handled astutely-strengthen a communist regime and force it to adapt. As a result, China has been urging the North Korean regime to abandon its autarkic juche policy and embark on progressive reforms since the early 1990s. Deng Xiaoping urged Kim Il-sung in this direction and Jiang Zemin has done the same with Kim Chong-il.

The younger Kim is known to have visited China at least three times since May 2000 (he may have made other secret visits). He has been shown the Zhongguancun computer district in Beijing, the skyscrapers and shopping centers of Shanghai, and export industries in Shenzhen. He has also received extensive briefings from Chinese officials and economists, and is reported to have demonstrated a relatively sophisticated knowledge of various matters and to have asked astute questions. Further exchanges to explore reforms have taken place at lower levels between the International Liaison Department (ILD) of the Chinese Communist Party and its counterpart in the Korean Workers Party. Of course, the most noteworthy sign of Pyongyang's move down the Chinese reform path was the establishment of the Sinuiju Special Administrative Region near the Chinese border region and the appointment of China's wealthiest businessman as the "governor" of the region. Before Yang Bin could take up his "appointment" he was arrested by Chinese security officials on charges of tax fraud and other unspecified economic crimes.

While arguing the case for economic and social reform (and implicitly political reform too), China realizes that it is a gamble-one that could easily exacerbate many of North Korea's dilemmas. But it is the best option. It is also an option in which China could and would play a significant economic role.

3. Relations with South Korea
The third element of China's calculus is to deepen its already robust ties to South Korea, both in their own right under current circumstances, but also in anticipation of eventual reunification of the two Koreas.

Over the past decade the China-ROK relationship has completely transformed and is now one of the strongest in the East Asian region. A kind of "China fever" has swept South Korea (at least the business community). China became South Korea's largest trading partner in 2001, surpassing the United States, while South Korea is China's third largest trade partner. Two-way trade in 2001 topped $100 billion. The ROK is now the fifth largest investor (FDI) in China, investing $830 million in 2001 and a projected $1 billion in 2002. More than 8,000 South Korean companies operate in China, employing hundreds of thousands of Chinese workers (particularly in the rust belt northeast, where the Chinese government is trying to restructure and retool traditional heavy industries). A dense network of transport links between the ROK and China's northeast and Shandong peninsula facilitate the movement of goods, capital, and people. South Korean firms are also very active in developing China's border region adjacent to North Korea. In 2000, approximately one million South Koreans visited China and more than 60,000 were long-term residents in China (including 13,000 students!) In 2001, 444,113 Chinese visited South Korea. Diplomatically, a series of presidential, ministerial, and sub-ministerial visits take place annually. In 2000 the two governments proclaimed a "comprehensive, cooperative partnership." Military exchanges are also quite extensive (between central-level officers, individual services, and region level commands), and in 2001 the two navies exchanged their first official port calls.

This relationship has become extremely important to China (and to Seoul), and Beijing is not about to sacrifice it in order to placate Pyongyang in any way. (Needless to say, the PRC-ROK relationship now dwarfs PRC-DPRK relations). Indeed, China's robust relations with the South act as a form of leverage with the North.

China's strategy for building ties with the South is born not only of economic motive, but also strategic calculus. Since the rapprochement more than a decade ago, Beijing realized that it would have little leverage is shaping the eventual outcome of the divided Korean peninsula if it didn't enjoy strong ties with the South. Such ties would also serve to offset any potential threat from the U.S.-ROK alliance and U.S. forces on the peninsula. They would also serve to undercut/offset Japanese attempts to gain a stronger foothold on the peninsula. Beijing's strategy has been a net success, but it has benefited both sides.

With respect to strategy towards the DPRK, both sides consult and support each other. They are both in favor of "engagement" with the North, a reformist North Korea, and eventual peaceful unification. Both oppose a punitive sanctions-based approach, and neither seems to endorse the Bush Administration's policy of "tailored containment" (more below). Of course, both strongly oppose Pyongyang's development of WMD, breakout of the 1994 Agreed Framework and IAEA safeguards program, and otherwise belligerent behavior. When ROK President Kim Dae-jung paid a state visit to Beijing in November 2002, to commemorate the tenth anniversary of the establishment of diplomatic relations, both sides reiterated the desire to maintain the Agreed Framework, to eliminate all WMD from the Korean peninsula, and to keep the peninsula nuclear weapons free.

China's entire approach to South Korea over the past decade has been motivated by several factors:

· as a hedge against regime collapse in the north and/or potential reunification;
· as an astute economic investment;
· as a key component of its proactive peripheral diplomacy;
· as a strategic ploy to gain long-term influence over the peninsula.

Let us turn to the last of these four factors.

4. Dominant External Influence
Although never publicly articulated, China tends to view the Korean peninsula as its natural sphere of influence-much as the United States does of Latin America, and Russia does of Central Asia (and previously did of the Baltics and Eastern Europe). Over the long term, geography will determine a great deal of the balance of power in Northeast Asia. China's proximity and growing interdependence will become, China hopes, the determining factor in Korea's strategic orientation. This does not necessarily constitute a new form of tributary vassal state, such as China maintained for several centuries (roughly 1400-1800), nor will it necessarily evolve into an asymmetrical patron-client relationship. But it will be a deferential relationship and will likely mean that China will become more important to the Koreas than Japan, Russia, or the United States. At least that is China's strategic calculus.

One already can see the outlines of this reconfigured China-Korea relationship in the manner in which Seoul and Beijing now deal with each other. Not only is it a fully institutionalized relationship, but both are deferential to each other's preferences (which are nearly identical when it comes to North Korea policy and strategy). And China has been able to exploit Korea's antipathy for Japan to its advantage.

The Issue of U.S. Military Forces
How will China react to the U.S.-ROK alliance and American military forces stationed on the peninsula following (presumptive) reunification? My sense from discussing this issue with civilian analysts, Foreign Ministry officials, and military officers in China is that China's strong preference is that it would become a non-issue following reunification and that the alliance would be naturally dissolved and troops withdrawn. The logic expressed for this option is China's view that alliances require declared adversaries as a rationale for their existence-and since an adversarial relationship between North and South Korea would no longer exist (and indeed the two Koreas would, in theory, no longer exist) there would thus be no continuing rationale for the alliance and troop presence. An unarticulated, but crucial, element of this line of thinking is that the China-Korea relationship would, by this time, be fully normalized, cooperative, and one of good neighbors. Hence, a rationale for U.S. troops and an alliance based on a possible "threat" from China would not be realistic-and that Beijing would question Seoul's sincerity of bilateral ties should it seek the continuation of the alliance and troop presence. Such reasoning already resonates in South Korea, where American discussions of a "China threat" ring hollow. Jae Ho Chung has succinctly summarized the position that Seoul would be in: "China's growing influence over the Korean Peninsula is real. The bottom line for Seoul is not to antagonize China; in this regard, South Korea being sucked into a U.S.-China conflict over Taiwan or elsewhere must be avoided."

If this is Beijing's real vision of how the issue would play out, a series of variations have been articulated by Chinese officials, analysts, and PLA officers over the past two years. The official position, of course, was reiterated by the Chinese ambassador to the ROK on the occasion of the tenth anniversary of ties, i.e. that China opposes the stationing of foreign troops abroad (Ambassador Li Bin did not go so far as to denounce the generic existence of alliances per se). Some PLA officers have privately voiced the same view, i.e. under no circumstances could China tolerate the continuation of U.S. forces on its border. But other PLA officers have offered the opinion that as long as the forces were stationed below the 38th Parallel, were not "aimed against China," then China (and the PLA presumably) could live with them. Another position frequently heard from Chinese Foreign Ministry officials is that maintenance of the alliance and troops is a sovereign decision of a newly unified Korea and that as long as they did not threaten any other nation, then that is a decision to be worked out between the Korean and American governments.

The common denominator to all of these views, of course, is the configuration and orientation of such troop deployments and the nature of the alliance after unification-but more broadly the state of Sino-American relations. If U.S.-China relations are troubled or antagonistic, with those arguing the "China threat" prominent in the United States, then China would undoubtedly judge the disposition of U.S. forces in Korea as oriented against China and as frontline forces for intervention in Taiwan. If the U.S. and a reunified Korea did renegotiate the terms of the alliance and status of forces (SoF) following reunification, it is highly likely that China would seek some kind of assurance from Seoul that such forces could not be deployed in any U.S. conflict with China (given the Korean adherence to the One China Policy this would rule out deployment of forces-or even rear area support-in a Taiwan contingency).

5. Phased Integration
Concomitant with China's aversion to the sudden implosion of the DPRK, so too does Beijing not support a hasty integration of North and South. Inevitably, Chinese analysts estimate, a rapid unification would be both unmanageable and disruptive. It would make the disruptions and burdens of German unification pale in comparison. Inevitably, a substantial part of the human, financial, energy, and environmental costs would fall on China.

Thus, Beijing's preferred strategy is for a gradual, phased integration (tonghe) which will lead eventually to a formal unification (tongyi). A German Ostpolitik model (or an ROK Nordpolitik model) is deemed the best way to proceed. This would involve a phased program of gradually increasing:

· family, cultural, social, professional, and sports exchanges;
· direct transport links (including rail links across the DMZ);
· commercial interchange, investment, and aid;
· a growing program of inter-governmental exchanges;
· and a series of military confidence building measures on both sides of the DMZ (one interesting model for these might be the CBMs agreed to by China and the Central Asian republics in the mid-1990s in the context of the Shanghai Cooperation Organization).

Once in place over several years, according to this line of reasoning, these various interactive measures would build the trust and confidence for the two sides to move to discussions about formal political reunification.

6. A More Responsible North Korea. The last goal-not the first-is to somehow persuade Pyongyang to halt its roguish proliferation behavior, as well as its own development of WMD. North Korea's conventional military deployments are also a concern, but a secondary one to issues of proliferation and WMD development. To be sure, this is a high Chinese priority, but it is not by any means the first issue on Beijing's agenda. China sees these issues as part and parcel of the broader set of policy goals outlined above. There certainly exists exigency at present, which must be dealt with, but China's longer-term vision for North Korea goes well beyond WMD issues.

Thus, the Bush Administration's obsessive and singular focus on the nuclear issue misses the broader environment China wishes to foster on the Korean peninsula. At a minimum, from China's perspective (as clearly articulated by Chinese President Jiang Zemin and Russian President Vladimir Putin at their December summit meeting), the nuclear issue must be linked to "normalization" of U.S. relations with the DPRK. But Beijing's bottom line is there must be a "package deal" linked to a range of initiatives aimed at alleviating North Korea's chronic economic and social crisis and bringing the DPRK into the international community (this is why China was so supportive of the 1997 Perry Initiative).

III. The Role of China in Resolving the Current Crisis

Beijing's basic approach to the current crisis will be as outlined above. It seeks a package deal, arrived at multilaterally, that trades North Korea's abandonment of WMD for a clear roadmap that will: (1) set North Korea on the path to real reform; (2) initiate a phased integration of North and South Korea; and (3) bring about normal relations between the U.S. and the DPRK.

But will Beijing go along with Washington's new strategy of "tailored containment" and participate in a collective sanctions-based punitive policy against Pyongyang? The chances of this range from very doubtful to nil. This is simply not China's preferred way to deal with the problem. Ever since the 1994 crisis China has been very clear that it firmly believes that a strategy of coercion and isolation will not only be counterproductive to gaining Pyongyang's cooperation, but that would likely produce desperate and potentially catastrophic acts by the North Korean regime. Washington should heed Beijing advice not to push to North into a corner. Moreover, despite the strains in relations between Beijing and Pyongyang, China is simply not going to allow North Korea to implode. It will do what it can to alleviate human suffering and keep the regime on "life support." Yet, as outlined above, if worse came to worse and the regime did peacefully collapse, Beijing believes it holds a very strong hand in exercising its influence over a unified Korea.

China also now holds a strong hand given the strength of its current relations with Russia. The solidarity on the North Korea issue demonstrated by Jiang and Putin at their December 2002 Beijing summit has sent a strong signal that the two governments do not wish to pursue a coercive and confrontational policy towards Pyongyang to resolve the current nuclear crisis. While their call to return to the 1994 Agreed Framework is probably unrealistic, they clearly signaled a preference for a multilateral and comprehensive solution to North Korea's problems. Indeed, this seems to be what Pyongyang itself is seeking (although its blackmail tactics are hardly the way to argue and win their case in the court of public opinion).

To some extent, it seems that the Bush Administration is heeding this advice. Secretary of State Powell's December 29, 2002 statements that "tailored containment" would be coupled with multilateral initiatives-working with other key parties (China, Japan, Russia, the ROK), the United Nations, and the IAEA-implicitly recognizes the Chinese and Russian positions. Powell also went to pains to suggest that the current situation was not a "crisis," that the United States "held no hostile intent" towards North Korea, that no troops were mobilizing for war, and that there was time to resolve the nuclear problem-if Pyongyang abandoned its blackmail tactics, stopped its nuclear reprocessing at Yongbyon, and returned to the Non-Proliferation Treaty (NPT) which allows for IAEA safeguards and inspections. There is no doubt that the December 29 announcements, which came after a month of hand-wringing and deep disagreement within the U.S. administration, were shaped in significant part by consultations with China, Russia, Japan, France and the UK (presuming that the U.N. will begin to play a role in the resolving the crisis).

Another key element of the revised U.S. policy is to explicitly rule out a preemptive strike against nuclear facilities in the DPRK (which had, in fact, been seriously considered by the Clinton Administration during the 1994 crisis, and became operative policy after the Framework Agreement came into effect if North Korea was found to be violating the agreement). A preemptive U.S. strike against North Korean facilities would have extremely deleterious consequences for Chinese interests and national security.

Some American analysts of China believe that the current crisis offers China a real opportunity to prove its credentials as a responsible power by siding with the Bush Administration's tough approach to North Korea. Actually, it's the other way around. It is China that seems to have a well-reasoned position based on a long-term perspective and roadmap for the Korean peninsula. Most importantly, China's position coincides with the other major powers and involved parties (South Korea, Russia, Japan, and the EU). It is the United States that has struggled to find its footing on North Korea policy ever since the Bush Administration entered office in January 2001. The issue is not so much that Beijing should exercise its presumed "influence" or leverage over Pyongyang (of which it does not have a great deal in the first place and, in any event, does not choose to exercise it in a coercive manner), but whether Beijing will be able to exercise its influence over Washington!

The Bush Administration is still trying to satisfy its own conflicting impulses while reconciling its approach with diplomatic realities. On the one hand it is playing hardball with the hardline North Korean regime, while on the other recognizing and signaling that only a multilateral and comprehensive approach will solve the problem. Only time will tell if the Bush Administration's dual approach will work-or whether it will have to join China, Russia, South Korea, Japan, the EU, and other actors in the recognition that only a comprehensive solution that starts with the recognition that a reforming and outwardly engaged DPRK is the ultimate solution to the problem. Washington is confusing the forest for the trees if it continues to believe that the nuclear/WMD issue is the primary or only issue in need of resolution. It is also mistaken to believe that an explicit security guarantee to Pyongyang will be a sufficient tradeoff.

If the Bush Administration continues with this myopic and obsessive approach, it will not only fail to resolve the crisis but will also cause deep fissures with key allies and major powers. The United States will then potentially have the worst of all worlds-a nuclear capable North Korea and severely strained relations with key nations that the U.S. needs on a range of other key issues. Washington would be well advised to recognize this linkage sooner rather than later.

To be certain, Beijing has a variety of good reasons to work with the U.S. to halt Pyongyang's breakout of the 1994 Agreed Framework-not the least of which is that a nuclear North Korea would likely stimulate South Korea and Japan to follow suit. This would change the entire balance of power in Northeast Asia, and not to China's advantage. Thus China finds common cause with Washington, Seoul, Moscow, and Tokyo to permanently halt North Korea's nuclear weapons program-but such cooperation will be most successful if all key parties work with a common vision of a reformist North Korea.