Beijing underscored maintaining peace and stability on the Korean Peninsula following Kim Jong Il’s death.  North Korea’s leadership succession raises questions about the future direction of China’s Korea policy, which was most recently reaffirmed during an October visit to the two Koreas by Vice Premier Li Keqiang, the presumed successor of Premier Wen Jiabao.  Li met Kim Jong Il, top legislator Kim Yong Nam, and Premier Choe Yong Rim in Pyongyang, and met President Lee Myung-bak, Prime Minister Kim Hwang-sik, and Parliamentary Speaker Park Hee-tae in Seoul.

Prior to Kim Jong Il’s death, China and North Korea maintained regular high-level contacts at the state, party, and military level.  DPRK Premier Choe Yong Rim visited China in late September. He met President Hu Jintao and Premier Wen Jiabao in Beijing and toured Chinese companies in Shanghai and Jiangsu.  A Communist Party of China (CPC) delegation led by Guo Shengkun, alternate member of the CPC Central Committee and secretary of the CPC Guangxi Zhuang Autonomous Regional Committee, paid a visit to North Korea in early October and met top legislator Kim Yong Nam.  Li Jinai, director of the General Political Department of the People’s Liberation Army (PLA), led a military delegation to North Korea in mid-November and met senior DPRK officials including Kim Jong Il.

There have also been mutual efforts to stabilize Sino-South Korean relations despite many differences that have risen in the aftermath of North Korea’s 2010 provocations.  The fourth China-ROK high-level strategic dialogue was held on Dec. 27 in Seoul, where Vice Foreign Minister Zhang Zhijun met ROK counterpart Park Suk-hwan, Foreign Minister Kim Sung-hwan, and Unification Minister Yu Woo-ik.  Foreign Ministers Yang Jiechi and Kim Sung-hwan met on the sidelines of the annual UN General Assembly session in New York on Sept. 20.  President Lee and Premier Wen attended regional meetings in Bali on Nov. 18-19, including the ASEAN Plus 3 Summit, East Asia Summit, and a China-ROK-Japan trilateral meeting.  Special Representatives Wu Dawei and Lim Sung-nam held talks on Korean Peninsula denuclearization in November and December in Beijing.

Chinese diplomacy in the aftermath of Kim Jong Il’s death

In its condolence message to Pyongyang on the death of Kim Jong Il, China emphasized hopes that North Korea “will remain united as one with the leadership of the Workers’ Party of Korea (WPK) and comrade Kim Jong Un,” providing an explicit endorsement of North Korea’s generational succession plans.  President Hu Jintao offered his condolences at the DPRK Embassy in Beijing on Dec. 20, accompanied by Vice President Xi Jinping, top legislator Wu Bangguo, propaganda chief Li Changchun, Vice Chairman of the Central Military Commission Guo Boxiong, Foreign Minister Yang Jiechi, head of the CPC International Department Wang Jiarui, General Office Director of the CPC Central Committee Ling Jihua, and Director of the President’s Office Chen Shiju.  Senior officials Wen Jiabao, Jia Qinglin, Li Keqiang, He Guoqiang, and Zhou Yongkang visited the embassy on Dec. 21.  Hu Jintao affirmed Beijing’s “persistent policy” of consolidating and developing the traditional friendship with North Korea, calling for “joint efforts” to further the China-DPRK friendship.

China also took steps to coordinate regional efforts in support of its top priority of maintaining stability on the peninsula.  Foreign Minister Yang held separate telephone conversations with Russian, Japanese, US, and South Korean counterparts on Dec. 20, emphasizing peninsular peace and stability in the “common interests of all parties.”  Kim Jong Il’s death presents China with the significant challenge of consolidating its bilateral relations with Pyongyang while strengthening regional coordination on managing potential instability in the North.  Although Yang expressed China’s willingness to “enhance dialogue and cooperation” with the US and South Korea, Beijing has rejected proposals from both for joint consultations on DPRK contingencies ever since North Korea’s second nuclear test in May of 2009.

Although Chinese officials have publicly expressed support for a stable leadership transition in Pyongyang since Kim Jong Un formally emerged on the scenes as designated successor when he was appointed to party and military posts in September 2010, Kim Jong Il’s sudden death is likely to intensify China’s internal debates on its future North Korea policy.  The DPRK state media’s assertion of Kim Jong Un’s position as “supreme commander” on Dec. 24 appeared to affirm the military backing needed for Kim’s succession.  But concerns over a potential power struggle are unlikely to subside in the near term given the uncertainties surrounding the legitimacy of Kim Jong Un. The willingness of Chinese analysts to consider the potential for internal infighting in North Korea was even more striking in light of Beijing’s official policy of full support for a stable transition and acknowledgment of Kim Jong Un as the rightful successor.  Several analysts such as the Central Party School’s Zhang Liangui frankly evaluated the question of whether Kim Jong Un will be able to “grasp his power after he takes over the leadership,” and many Chinese analysts anticipated an extended period of inward focus and anticipated the enhanced importance of Sino-DPRK ties as Kim Jong Un attempts to consolidate power following North Korea’s leadership transition.

Pyongyang’s pledge to continue its military-first policy under Kim Jong Un complicates China’s challenge of engaging Pyongyang while pursuing stability in consultation with regional partners.  For instance, China’s desire to resume Six-Party Talks directly conflicts with DPRK National Defense Commission statements following Kim Jong Il’s death that inter-Korean relations will not improve and that the DPRK will not change its nuclear policies.

China’s consolidation of its two Koreas policy

PRC Vice Premier Li Keqiang’s back-to-back visits to North and South Korea from Oct. 23-27 followed a familiar pattern of formal equidistance between the two Koreas under the “fifth generation” Xi-Li administration that is expected to emerge in 2012.  Li’s delegation included key political and economic figures such as Deputy Secretary General of the State Council You Quan, Vice Foreign Minister Zhang Zhijun, Deputy Commerce Minister Chen Jian, Vice Minister of the National Development and Reform Commission Liu Tienan, Chairman of the Board of Directors of the China Development Bank Chen Yuan, Vice Minister of the CPC International Department Liu Jieyi, and Deputy Director of the State Council Research Office Ning Jizhe.  In North Korea, Chinese and DPRK counterparts pledged further exchanges in various fields including at nongovernmental and local levels, and signed a series of agreements on economic and technological cooperation.

Li Keqiang’s visit to South Korea appeared to set a positive tone for expanding Sino-ROK cooperation as the two sides approach the 20^th anniversary of diplomatic normalization in 2012.  Li presented a four-point proposal for developing bilateral ties, including to: 1) strengthen political coordination and mutual trust through inter-governmental, legislative, and party exchanges; 2) deepen trade ties through macroeconomic policy coordination and cooperation in such areas as finance, logistics, high-technology, and energy and the environment; 3) expand  people-to-people exchanges to strengthen the social foundation for the relationship; and 4) promote multilateral coordination and regional integration within the ASEAN Plus 3 mechanism.

PRC Vice Foreign Minister Zhang Zhijun called Li’s visit “a major diplomatic move” by China to promote strategic mutual trust and comprehensive cooperation with the two Koreas.  Underlying the visit were the common goals of enhancing high-level exchanges to build political trust and expanding the scope of bilateral cooperation following a period in which the limits of Sino-South Korean relations had been clearly revealed.  Li discussed in both Pyongyang and Seoul the importance of North-South reconciliation and the resumption of Six-Party Talks, stating that regional peace and stability was “in line with the common interests of every party involved” and negotiation “the only correct path” toward resolving the nuclear issue.  Li expressed Chinese support for Kim Jong Il’s expectations for an early resumption of Six-Party Talks “with no preconditions attached,” and a “comprehensive and balanced” implementation of the Sept. 19, 2005, Joint Statement.  Seoul and Washington, on the other hand, have agreed that no talks can proceed without the acknowledgement of North Korea’s uranium enrichment program and improvement in inter-Korean relations.

Prospects for China-mediated denuclearization talks

Beijing has actively called for “creating the conditions” for the resumption of Six-Party Talks and continues to hold periodic consultations on the nuclear issue with DPRK, US, and ROK envoys.  The China Institute of International Studies in September hosted an international forum commemorating the signing of the 2005 Joint Statement, attended by six-party representatives as well as DPRK Vice Foreign Minister Ri Yong Ho. Addressing the forum, PRC Foreign Minister Yang Jiechi reiterated that “we support all measures that will help promote dialogue, easing of tension, and peace while opposing all moves that will undermine peace and stability.”  In late October, Seoul officials reportedly expressed an interest in holding trilateral foreign ministerial talks with Chinese and Japanese counterparts over the DPRK nuclear issue amid what was perceived as growing momentum in regional nuclear diplomacy.  Pyongyang’s First Vice Foreign Minister Kim Kye Gwan visited China in late October, reportedly for talks with Wu Dawei in Beijing, following a round of US-DPRK nuclear talks held the previous month in Geneva. ROK nuclear envoy Lim Sung-nam met PRC counterpart Wu Dawei in November to discuss the outcome of US-DPRK denuclearization talks and notably traveled first to Beijing rather than Washington to assess prospects for resumption of nuclear talks in the days following Kim Jong Il’s death, after which Lim stated that China and South Korea must work together to “reinvigorate” diplomatic efforts to restart the Six-Party Talks.

Apparent relaxation of South Korean policies on inter-Korean humanitarian exchanges and additional consultations on provision of US nutritional assistance to North Korea appeared to be initial steps toward the resumption of multilateral denuclearization talks.  The mid-December Asia tour by US Special Representative on Korea Policy Glyn Davies and Special Envoy for the Six-Party Talks Clifford Hart focused on the future of North Korea’s enriched uranium program, which remained a major challenge and point of difference between North Korea and the US.  Ri Gun, director general for North American affairs at the DPRK Foreign Ministry, was also in Beijing at the time of Davies’ December visit, fueling speculation over the possibility of further discussions between US and DPRK counterparts.  But any immediate hopes for progress were dashed by Kim Jong Il’s death.  North Korea’s domestic political considerations in the aftermath of his death are likely to raise the regional challenges of engaging Pyongyang in dialogue.

Chinese state media reports of Vice Premier Li Keqiang’s October visit to North and South Korea noted a need for Pyongyang to “step up coordination and cooperation in handling international and regional affairs.”  Such statements appear to resonate with the content of summit meetings between President Hu Jintao and Kim Jong Il since 2010, where China emphasized the need for regular high-level talks between Beijing and Pyongyang and appeared to push toward securing Pyongyang’s participation in denuclearization talks in return for Chinese economic aid.  Kim’s death, however, is likely to shift Chinese priorities toward stability rather than denuclearization.  Following the China-ROK strategic dialogue in Seoul on Dec. 27, the ROK Foreign Ministry spokesman affirmed “a consensus that the most important thing is to maintain peace and stability on the Korean Peninsula.”  Uncertainties over the stability of the DPRK regime have also appeared to raise renewed debate on such issues as the control of loose nuclear weapons in the event of regime collapse, refugee flows, and new artillery attacks by Pyongyang.  North Korea’s internal situation underscores the need for broader regional discussions designed to align such priorities, for which China’s role is more important than ever.

China-DPRK trade, investment, and economic ties

Chinese economic relations with the North have advanced amid apparent signs of progress in regional investment efforts, including gas and railway projects with Russia that would involve transit of pipelines and railways through North Korea.  China-DPRK trade reached $3.1 billion during the first seven months of 2011 according to Chinese sources, an annual increase of 87.6 percent.  The Hyesan-China Joint Venture Mineral Company, a copper company established in November 2007, which represents China and North Korea’s biggest joint mineral project in recent years, began operations in North Korea’s Ryanggang province on Sept. 19.  Alongside Russian investments in a refurbished railway from Russia to Rajin Port, China’s Jilin province  has financed significant progress in paving a 50-plus km dirt road from Quanhe near Hunchun to Rajin, and a Jilin province based company has shipped over 60,000 tons of coal to Shanghai via Rajin Port since December of 2010.  Moreover, rising labor prices in China have increased the willingness of some Chinese companies to process labor-intensive subcomponents in North Korean factories.  While Chinese officials have hailed North Korea’s increased emphasis on economic development for widening the opportunities for foreign economic cooperation and investment, South Korea’s Bank of Korea in November estimated that the DPRK economy shrank for the second year in a row in 2010 by 0.5 percent, despite an increase in inter-Korean trade by 13.9 percent to $1.91 billion.

DPRK Premier Choe Yong Rim’s five-day visit to China from Sept. 26-30 focused largely on promoting bilateral economic cooperation. Choe and Premier Wen Jiabao agreed to further cooperation in such areas as trade, investment, infrastructure, natural resources, and agriculture.  Calling for joint efforts to advance bilateral ties under “the complicated regional and international situation,” Wen stated that “China supports the DPRK’s exploration of its own way of development in accordance with its domestic situation, and will continue to offer assistance within its capability.” Choe pledged to improve the investment environment for Chinese businesses in an apparent indication of Pyongyang’s efforts to draw foreign investment. Choe’s September visit included tours of major industrial centers in Jiangsu and Shanghai provinces, where he pledged to enhance cooperation between the two provinces and North Korea’s Kangwon-do province and Hamhung-si.  Shanghai Mayor Han Zheng called for expanding bilateral cooperation “under the unified arrangements of the central government,” suggesting an increased emphasis on state-led promotion of local economic ties.

Jilin province on Oct. 8 launched a train tour to North Korea as part of provincial efforts to expand bilateral cultural exchanges since the central government approved outbound destination status to the North in September 2008.  These developments have corresponded with North Korea’s recent prioritization on tourism programs for Chinese as a means of earning hard currency.  Chinese reports indicate that both sides exchanged a total of about 247,000 tourists in 2010, during which China launched expanded group tours to North Korea.  According to South Korean sources, North Korea has granted 15-year rights to a Chinese tour company at Mount Kumgang, a resort that has been at the center of inter-Korean disputes since Seoul halted joint operations there in response to a shooting incident in 2008.  CPC officials in Dandong have announced that the border city will host a bilateral economic, trade, and cultural exposition in June 2012, which is expected to further enhance China-DPRK cross-border exchanges.

China and South Korea’s strategic cooperative partnership

PRC Deputy Commerce Minister Chen Jian emphasized during Li Keqiang’s October visit to Seoul that Sino-South Korean trade and investment are an important basis for deepening the bilateral strategic cooperative partnership.  South Korea became China’s third biggest trade partner and third biggest source of foreign direct investment last year, while China remains South Korea’s biggest trade partner and investment destination.  China-ROK trade totaled $159.4 billion between January and August 2011, a more than 20 percent annual increase, and investments amounted to almost $50 million in July 2011, according to Chinese sources.  The total bilateral trade volume is forecast to reach around $250 billion by the end of 2011 and both sides have aimed to expand trade to $300 billion by 2015.

Speaking to South Korea’s major businesses and economic organizations on Oct. 27, Vice Premier Li Keqiang presented six proposals for promoting bilateral trade and cultural cooperation: 1) establishing a bilateral free trade zone, 2) enhancing cooperation on green and other emerging industries, 3) exploring new areas for South Korean investment in China such as high-end manufacturing and provincial development programs, 4) advancing financial cooperation to expand the bilateral currency swap deal from $28 billion to $360 billion, 5) enhancing bilateral and multilateral economic and trade coordination through intergovernmental and nongovernmental mechanisms, and 6) expanding people-to-people exchanges by inviting an additional 300 South Korean youths to China in 2012 and sending 1,400 Chinese language teachers to South Korea by 2015.  Li’s propositions demonstrate an effort to further develop the China-ROK economic and trade partnership based on “mutual benefit,” and appear to respond to South Korean worries about the structural transformations in the bilateral relationship that have accompanied China’s shift to higher-end industries.  ROK Prime Minister Kim Hwang-sik indicated South Korea’s emerging interests in advancing cooperation with China in such sectors as electronic information, biology, environmental protection, and new energy.

During Li’s meeting with Parliamentary Speaker Park Hee-tae, both sides expressed hopes for expanding inter-parliamentary, party, and youth exchanges in an effort to upgrade the China-ROK partnership.  Despite the concrete steps that have been taken to expand China-ROK trade and investment ties, such progress remains overshadowed by a greater need to strengthen the political and security coordination mechanisms underlying the strategic cooperative partnership.  China and South Korea have continued to confront each other over illegal operations in South Korea’s exclusive economic zone.  A clash between a Chinese fishing boat and two ROK Coast Guard vessels in the Yellow Sea on Dec. 12, which left one South Korean dead, drove public protests at the Chinese Embassy in Seoul, which raised warnings from the PRC Foreign Ministry.  Such incidents may continue to strain public perceptions of the Sino-ROK partnership.  Ahead of the China-ROK strategic dialogue in Seoul on Dec. 27, accusations emerged in the South Korean media that China was distancing itself from the South to strengthen its influence over the North following the death of Kim Jong Il.

China and South Korea’s trilateral dialogue with Japan may offer a mechanism for enhancing regional coordination on North Korea and other regional security issues given the opening of the trilateral secretariat in South Korea in September 2011 and regularized trilateral talks in such areas as disaster management.  North Korea was a priority issue at the Dec. 26 summit between President Hu Jintao and Japanese Prime Minister Yoshihiko Noda in Beijing, where Hu reaffirmed China’s willingness to “make joint efforts with all relevant parties” “to achieve lasting peace, security, and order on the peninsula and Northeast Asia.”

Conclusion: prospects for China-ROK coordination on post-Kim Jong Il North Korea

Kim Jong Il’s death creates new challenges for Chinese diplomacy, as China is likely to pull out the stops to forestall instability or challenge to North Korea’s leadership succession, while also managing its own leadership transition.  China’s top leadership made a strong showing in expressing condolences for Kim Jong Il’s death and has already indicated a willingness to host Kim Jong Un at an early date. It is likely that China will step up economic assistance in the coming months in an attempt to shore up stability and forestall internal competition for power in the North.  Ultimately, maneuvering for power among North Korea’s elite will likely develop independently of China’s influence, although it might entail appeals for financial support from various factional interests.

While Beijing continues to strengthen its traditional friendship with Pyongyang, Vice Foreign Minister Zhang Zhijun has asserted that developing a long-term, stable strategic cooperative partnership with South Korea is one of China’s diplomatic priorities.  Nevertheless, China-South Korea top-level contacts remain limited, as South Korean media noted a relative lack of early contact between South Korean and Chinese leaders following Kim Jong Il’s death.  Although Lee Myung-Bak is set to make a state visit to China in early 2012, China is likely to be especially cautious in its handling of South Korea and will emphasize the need to avoid provoking the North during this sensitive period of transition.  Both South Korea and China recognize the need to improve relations and to diminish mistrust over the future of North Korea, however, opportunities for significant progress on these issues will likely have to wait until 2013, when both countries will have a new political leadership.

Uncertainties regarding North Korea’s internal situation should be a catalyst for greater Sino-South Korean coordination with the US and other regional partners in anticipation of potential instability under the post-Kim Jong Il regime.  But China is likely to remain wary of any joint efforts by South Korea and the US to promote regime change in the North, especially given the renewed insecurities in China over US military policy in Asia.  ROK Foreign Minister Kim Sung-hwan at a forum in Seoul on Sept. 7 indicated that the alliance would become increasingly important in dealing with an unpredictable North Korea, stating that “our alliance with the US will continue to be a cornerstone of our diplomacy in the future although China is emerging as a global power.”  But the real test for the future of South Korean diplomacy with China and the US is likely to unfold in 2013, following China’s leadership transition and elections in the US and South Korea.  In the meantime, uncertainties regarding a new North Korean leadership will create the context in which all three leaderships must grapple with their future options for preserving stability in Northeast Asia.