Show Me the Money: Evaluating Jang Song-thaek’s Search for Economic Cooperation in Beijing
Like a bunch of prospectors in a limitless frontier, SinoNK’s staff are on the hunt: we want more nuggets of information about the recently-concluded visit of North Korean leader Jang Song-taek to China. Thus, we are on the move, and sifting through the streams: Your present editor is staying in a small hotel with a big North Korean economic delegation in Dandong, Steven Denney (Assistant Editor) is reinstalled in Seoul, and Roger Cavazos (our intellectual sparkplug and Coordinator) is tracking the DPRK’s Southeast Asia diplomacy in juxtaposition to the China visit. Analyst Nathan Beauchamp-Mustafaga is observing events in Beijing, and arrives with a fresh and well-documented piece for SinoNK. — Adam Cathcart, Editor-in-Chief
Show Me the Money: Evaluating Jang Song-thaek’s Search for Economic Cooperation in Beijing
by Nathan Beauchamp-Mustafaga
Another week and another round of high-level meetings between Chinese and North Korean leaders is another strong sign that the two countries are trying to get their relationship back on track. Jang Song-thaek’s six-day visit to Beijing this past week was hailed as “neighbors exploring cooperation” and signaled the further strengthening of economic ties between the two allies. It also indicated that the individuals at the center of power in Pyongyang — Jang is the North Korean Vice-Chairman of the National Defense Commission, and uncle of Kim Jong-un — are paying heed to signals from Beijing; his visit follows closely after International Liaison Department head Wang Jiarui’s visit to Pyongyang from July 30 to August to meet with Kim Jong-un. Wang’s visit had been the first foreign delegation to meet with Kim Jong-un and focused on economics as well, with the North Korean media actually timing the release of Kim’s newest speech on economic policy to Wang’s visit.
Show Me the Money | The most important North Korean official to visit China since Kim Jong-il’s death in December 2011, the public aspects of Jang’s trip to Beijing focused mainly on economic cooperation. Jang began with a brisk round of talks with Chinese Minister of Commerce Chen Deming at the inelegantly-titled Third Meeting of the Joint Steering Committee for Developing China-DPRK Two Economic Zones.
Emphasizing unity and China’s willing cooperation, the report released by the Chinese Ministry of Commerce highlighted the numerous agreements signed by Chen and Jang. These agreements include “the establishment of the Management Committee of Rason Economic and Trade Zone and the Management Committee of the Hwanggumphyong and Wihwa Islands Economic Zone, and signed agreements on the establishment and operation of the Management Committee, economic and technical cooperation, agricultural cooperation, and power transmission, park construction and detailed planning in Rason Economic and Trade Zone.” The meeting attempted to dispel lingering doubt over China’s commitment to the Hwanggumphyong and Wihwa Islands Economic Zone after state-run Global Times reported in June that Beijing was losing interest in the project.
While sources indicate Beijing’s interest in the Rason SEZ far outweighs their interest in the Islands Zone, the opposite is apparently true for the North and this high-profile treatment for the Islands Zone was surely appreciated by the North. However, there is no evidence yet of new concrete investment agreements for the Islands Zone even after the conclusion of Jang’s trip.
After Jang’s meeting with Chen, Jang took the North Korean delegation to the northeast to finalize investment deals for the two zones. The delegation visited Jilin on August 14 to meet with Jilin Provincial Secretary Sun Zhengcai and visited Shenyang on August 15 to visit Liaoning Provincial Secretary Ji Wangmin, and wen to the border city of Dandong on August 16th. One investment forthcoming from the trip was the Changchun-based Yatai Group’s agreement to build a construction materials complex in the Rason zone. Jang also met with Wang Jiarui back in Beijing on August 17, again covering economic cooperation.
Platitudes Galore | The highlight of Jang’s trip was his separate meetings with President Hu Jintao and Premier Wen Jiabao on August 17. President Hu was joined in the meeting by International Liaison Department head Wang Jiarui, National Development and Reform Commission Chairman Ren Zhangping, Minister of Finance Xie Xuren, Minister of Commerce Chen Deming, Liaoning Provincial Secretary Ji Wangmin, Jilin Provincial Secretary Sun Zhengcai and Vice Foreign Minister Zhang Zhijun. The public statement messaged the typical platitudes.
Jang’s meeting with Premier Wen focused much more on economics, with Wen laying the groundwork for the future development of the two countries’ SEZs. Wen stated that “(1) to strengthen the two countries’ governments’ leadership in cooperation and planning, to improve law and regulations; (2) to encourage the active participation of the regions in question, to maintain close contacts and coordination; (3) to create good conditions for the role of market mechanisms, land, taxation etc.; (4) to encourage companies to invest, and to solve their practical problems and difficulties [鼓励企业投资,为他们解决实际问题和困难]; (5) to improve customs, quality control and other services to provide benefit for the cooperation.” Both meetings highlighted Jang’s status as the leader of the 50-person delegation for Sino-North Korean Economic Development Zone United Guidance Commission; leaving no question his visit to China was all business.
These meetings on economics reflect the status of China-North Korea political ties—improving, but not great. Pyongyang knows it needs China’s help to revive its lagging economy, but Kim Jong-un refuses to be seen as desperate. Stephanie Kleine-Ahlbrandt revealed that Kim Jong-un has rebuffed Chinese invitations for a visit and other North Korean officials first visited Southeast Asian nations to solicit investment before sending Jang to Beijing. Jang’s visit to increase economic ties suggests Kim Jong-un is either not afraid to increase North Korea’s already high-level of reliance on China, or Kim knows he doesn’t have a choice given the current political climate in the South and United States as they both enter election season.
Jang’s visit also underscores the recent foreign policy push by the new leadership. The visit to Beijing ties in with the upcoming talks between North Korea and Japan, slated to be held in Beijing on August 29. These talks will be the first direct government-to-government talks in four years and shows Beijing is willing to play host again. While other locations could have been chosen for the upcoming talks with Japan, the selection of Beijing shows that China is still North Korea’s liaison with the world and the power locus of Northeast Asia.
Two Suns in the Sky | The meetings did leave some unresolved questions for observers. First, why did Jang come before Kim Jong-un? The most likely answer is that Jang is laying the groundwork for the much-expected inaugural visit by the new leader. Another possibility is that Kim Jong-un refused to promise Beijing that the North would not conduct a third nuclear test. Xinhua carried a Japanese media report in early July that Kim Jong-un’s upcoming visit was tied to Chinese demands that he disavow a new test. However, these reports conflict with Kleine-Ahlbrandt’s claim that Kim Jong-un was already invited multiple times by the Chinese. With the new report from Frank V. Pabian and Siegfried S. Hecker in the Bulletin of the Atomic Scientists that North Korea could conduct a test in as little as two weeks, China would surely be eager for this promise, but China’s history of continuing relations in the face of North Korean tests suggests China’s demands could only hold up for so long. Another possibility, albeit unlikely, is that Kim Jong-un has yet to consolidate power enough to allow him to leave the power center of Pyongyang. However, the recent purge of Vice Marshal Ri Yong-ho suggests that Kim’s succession process is proceeding smoothly and his authority is not challenged. Kim Jong-un’s appearance on the heavily-armed islands on Korea’s west coast on August 17, at the very least, was a suggestion by the North Korean state media that the young leader is very much in command and that US-ROK drills, if anything, will strengthen the country’s political hierarchy.
Pimp My Ride: Where are the Limos? | Another small question is the choice of cars for the visit. Jang was escorted in a relatively low-key Cadillac with civilian license plates, whereas North Korean diplomats usually enjoy a more comfortable ride. This could simply be a coincidence or a conscious effort by the Chinese side to show more fiscal restraint as the CCP enters into the home stretch for the run-up to the 18th Party Congress, expected to be held later this year and christen Xi Jinping as the new leader of China in a once-a-decade leadership change. The other possibility is that the large gathering of officials at the CCP’s summer retreat in Beidaihe means all the Party’s cars have left Beijing, leaving the North Korean leader with fewer choices than he might otherwise have had.
To Aid or Not to Aid? | Notably, while Wen Jiabao talked about guaranteeing the “people’s livelihood” in North Korea, there were no new agreements for aid, even after the recent flooding in North Korea. Chinese media reported Jang expressed a desire for a $1 billion loan, which was reportedly discussed, but there were no public agreements. The presence of the Minister of Finance Xie Xuren and Minister of Commerce Chen Deming during Jang’s meeting with Hu support this report. The lack of aid or loan agreements could simply be a decision by the North to avoid dampening the positive atmosphere surrounding the new economic agreements meant to revive the North Korean economy. China could also feel that its extensive aid package (reportedly $600 million) from February of this year was enough and did not want to reward the North after their failed satellite launch followed their donation so closely. Beijing could also be withholding further aid in an attempt to force the North to embrace economic reforms on Chinese terms before China opens the floodgates for more Chinese aid and investment to support the renewed push for economic reform. Nevertheless, Jang’s visit will be hailed as a success by the North for its secured pledges of increased economic ties from Beijing.
 Choe Sang-hun, “North Korea Must Become Prosperous, Leader Says,” New York Times, August 3, 2012. http://www.nytimes.com/2012/08/04/world/asia/kim-jong-un-calls-for-greater-north-korean-prosperity.html
 Also in attendance was the Chinese Ambassador to North Korea, Liu Hongcai.
See also: People’s Daily Online, “朝中社发表文章介绍朝劳动党中央部长张成泽访华成果 (KCNA Releases Article Introducing the Successes of KWP Central Committee Member Chang Song-thaek’s Visit to China), August 15, 2012. http://world.people.com.cn/n/2012/0815/c159300-18747723.html
 Park Min-hee, “Jang Song-thaek wins investment support on his visit to China,” The Hankyoreh, August 17, 2012. http://english.hani.co.kr/arti/english_edition/e_northkorea/547531.html
 People’s Daily, “中联部部长王家瑞会见朝鲜劳动党中央行政部部长张成泽 (International Liaison Department head Wang Jiarui Meets with KWP Executive Branch Minister Jang Song-thaek)” August 17, 2012. http://world.people.com.cn/n/2012/0817/c157278-18767128.html
 For a comparison in the English and Chinese versions of China’s statements concerning the visit, see: Adam Cathcart’s Translating Jang Song Taek in Beijing: A Communique Troika from August 18, 2012.
See also: People’s Daily Online, “胡锦涛会见中朝两个经济区开发合作联合指导委员会朝方代表团(Hu Jintao Meets Delegation for Sino-North Korean Two Economic Development Zones United Guidance Committee),”August 18, 2012. http://politics.people.com.cn/n/2012/0818/c1024-18772360.html
 In the meetings that Jang had with leaders, this appears to be the only reference to North Korean joint ventures swallowing, stealing, or otherwise beating their Chinese partners out of the DPRK. For discussion of Wen’s role in one particular case, see http://www.piie.com/blogs/nk/?p=7158 and http://sinonk.com/2012/08/15/nightmare-investment-documenting-north-koreas-abuse-of-the-haicheng-group/.
 People’s Daily, “温家宝会见中朝两个经济区开发合作联合指导委员会朝方代表团(Wen Jiabao Meets with Meets Delegation for Sino-North Korean Two Economic Development Zones United Guidance Committee),”August 18, 2012. http://politics.people.com.cn/n/2012/0818/c1024-18772371.html
 Associated Press, “Japan, North Korea to hold first official talks in 4 years in latest sign of thaw,” August 14, 2012. http://www.washingtonpost.com/world/asia_pacific/japan-north-korea-to-hold-first-official-talks-in-4-years/2012/08/14/2832b058-e5ec-11e1-9739-eef99c5fb285_story.html
 “Japanese Reports Claim China Conditions Kim Jong-un’s Visit,” Xinhua, July 16, 2012, http://news.xinhuanet.com/world/2012-07/16/c_123415363.htm.
 Frank V. Pabian and Siegfried S. Hecker, “Contemplating a third nuclear test in North Korea,” Bulletin of the Atomic Scientists, August 6, 2012. http://www.thebulletin.org/web-edition/features/contemplating-third-nuclear-test-north-korea
 Choe Sang-hun, “North Korea Removes Its Army Chief From All His Posts,” New York Times, July 15, 2012. http://www.nytimes.com/2012/07/16/world/asia/north-korea-removes-army-chief.html
For photos from a North Korean delegation to the Six Party Talks back in 2004, see: www.sina.com
 Zhou Yu and Li Hao, “中国援助朝鲜粮食内幕：走私量远大于正式出口 (Behind the Curtain of Chinese Aid to North Korea: Smuggled Amount Far Exceeds Official Exports),” Pheonix Weekly, April 10, 2012. http://news.ifeng.com/shendu/fhzk/detail_2012_04/10/13783029_0.shtml