What Will China Do?

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Last night’s exchange of artillery fire between North and South Korea has set the stage for China to make a distinctive mark on the world stage and China’s reaction to the situation on the Korean peninsula could have a long term impact on both regional security and global markets.

China’s response will be shaped by global interests but also by two strong regional interests.  With a population of over one billion and a rapidly expanding economy moving slowly but inexorably toward a free market system, China is the emerging superpower of the 21st century.  As her economic interests expand, so does her desire for regional dominance when it comes to issues of security.  Any conflict on the Korean peninsula threatens China’s long term strategic goals if it leads to increased western military activity in the region.  With more than 25,000 American troops already in South Korea and another 35,000 in Japan along with a naval strike group, China is concerned that further military escalation could lead to increased US deployments.  Furthermore, last week’s revelation of a uranium enrichment facility in the north ratchets up concerns over a nuclear arms race in the Pacific Rim region, to the detriment of China’s security interests.  China is also very interested in the stability of North Korea, and if the regime should collapse China wants to make sure it happens as gently as possible.  There is already a large refugee problem in the region around their shared border, and a rapid collapse of North Korea would likely trigger a massive exodus of refugees into China.

These regional interests are balanced by China’s global interests.  China’s booming economy is largely fueled by western investments into Chinese industries.  These investments are due to the perception that China is a rational actor on the world stage.  Should China do anything to weaken that perception, uncertainty about China’s future would cause much of this capital to shift to other emerging economies like India and Brazil.

  

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North Korea’s provocations can be traced to crippling food shortages and the desire to secure a smooth transition of power from Kim Jung Il to his son, Kim Jung Un.  The North Korean economy has been in tatters since the collapse of the Soviet Union, which once provided large amounts of aid to its communist counterpart.  Food shortages in the country are reported to have reached critical levels, and the US has refused to lift sanctions that prevent foreign aid from reaching the impoverished country so long as North Korea continues to take a hard line on its nuclear program.  By exposing its uranium enrichment plant and attacking the South Korean island with artillery, North Korea is trying to force a return to the bargaining table under more favorable terms.  At the same time, Kim Jung Un is likely to take over the reins in the next two years but has not yet fully brought the military around to his side.  The support of North Korea’s armed forces is critical to the smooth transition and this show of force may be, in part, designed to rally the military establishment to his banner.

With that in mind, China will likely press for emergency aid to North Korea.  By providing much needed food, China can prevent escalated violence while easing some of the refugee pressures along the border.  Such an action would likely win the support of key international players like South Korea, who has recently signaled a willingness to, at least temporarily, abandon a hard line position in order to provide humanitarian aid.  This move by China would present  a humanitarian face to the world and even if opposed diplomatically by the US because it would ease pressure on Kim to return to the six party nuclear talks, the public face of China would be preserved, ensuring the continued flow of western capital into its economy.