2018 was a diplomatic breakthrough year for Kim Jong Un, including three summits each with Presidents Xi Jinping and Moon Jae-in and a historic meeting with President Trump. After years of frustration over North Korea’s nuclear and missile development, the 70^th anniversary of the founding of the DPRK in September was an occasion for consolidating the China-DPRK friendship. Prospects for regional coordination on North Korea, however, have been hindered due to challenges of implementation of international sanctions and deadlocked US-DPRK denuclearization negotiations. The focus on inter-Korean progress both overshadowed and enabled the gradual recovery of China-South Korea economic and political relations, but progress on North Korea’s broader regional integration remains murky, and the regional dimension of the Korean puzzle remains unclear.

Celebrating traditional and new China-DPRK friendship

Communist Party of China (CPC) Politburo Standing Committee (PBSC) member and National People’s Congress Standing Committee Chairman Li Zhanshu led a delegation of state and party officials to Pyongyang on Sept. 8-10 for a series of events celebrating North Korea’s 70^th founding anniversary.  As President Xi Jinping’s special envoy, Li met DPRK counterpart Kim Yong Nam on Sept. 8 and delivered a letter from Xi to Kim Jong Un on Sept. 9.  Kim Jong Un and wife Ri Sol Ju hosted a special art performance and banquet reception at the end of Li’s visit on Sept. 10, attended by Kim’s sister Kim Yo Jong, Workers’ Party of Korea (WPK) Vice Chairman Choe Ryong Hae, and PRC Ambassador Li Jinjun.  Joint messages during Li’s visit highlighted three points: the advancement of bilateral ties through three Xi-Kim meetings this year, North Korea’s strategic shift centered on economic development, and the importance of implementing the June 2018 Trump-Kim statement.  Xi affirmed China’s commitment to “safeguard, consolidate, and develop” the China-DPRK relationship, while Li indicated China’s willingness to work with other regional partners on Korean Peninsula issues.

Li Zhanshu attends the DPRK National Day military parade, meets Kim Jong Un and delivers a congratulatory message from President Xi. Photo: Xinhua

China’s own National Day commemorations and other anniversaries in October presented more opportunities to pledge commitments to the bilateral relationship.  Such friendly exchanges contrasted sharply with the mood in 2016-2017, when state media on both sides refrained from celebrating a relationship soured by North Korea’s military provocations and China’s participation in UN sanctions.  PRC Ambassador to North Korea Li Jinjun reflected positively on Li’s September visit as he hosted Pyongyang’s number-two official Choe Ryong Hae and Culture Minister Pak Chun Nam at the Chinese Embassy’s National Day reception on Sept. 27.  Featured on WPK paper Rodong Sinmun’s front page on Oct 1, Kim Jong Un’s congratulatory message to President Xi promised to “develop the traditional DPRK-China relations of friendship on a new stage.”  Beijing returned similar pledges of cooperation to the WPK in commemoration of the party’s founding anniversary on Oct. 10.  During a visit by a Chinese youth delegation marking the Oct. 25 anniversary of China’s entry into the Korean War, Vice Minister of Urban Management Choe Song Chol and PRC Ambassador Li Jinjun, alongside Chinese residents based in North Korea, attended a ceremony in Pyongyang for the renovation of a cemetery of Chinese People’s Volunteers.  A Rodong Sinmun editorial on Oct. 26 celebrated both the traditional alliance and “new” friendship under Xi and Kim.

China-DPRK diplomatic engagements advanced against the backdrop of Pyongyang’s continued reconciliation with Seoul and the afterglow of the Trump-Kim summit in Singapore, including a third inter-Korean summit on Sept. 18-20.  North Korea’s highly publicized National Day commemorations, captured by Rodong Sinmun photos of foreign dignitaries arriving in Pyongyang, reflected Kim Jong Un’s broader external outreach following his summit achievements with Presidents Moon and Trump.  Although preparations for the 70^th anniversary event were accompanied by unfounded speculation over a visit by President Xi, Li Zhanshu was the highest-ranking PRC official to visit North Korea under Kim Jong Un, and represented the newly-consolidated CPC leadership since October 2017.  Li flanked Kim at the Sept. 9 military parade, which drew global media praise for featuring “flowers, not missiles” and an in-advance “Thank you To Chairman Kim” tweet from Trump for joint efforts on denuclearization. More cautious reviews in South Korea expressed concern that China’s reengagement of North Korea was an effort to keep the North within its “sphere of influence” and designed to counter the threat to Chinese national interests posed by Pyongyang’s closer ties with Seoul and Washington.

China and North Korea’s trilateral front with Russia on denuclearization and peace

Breakthroughs in high-level diplomacy this year have quickly revealed both China’s and North Korea’s disagreements with Washington.  China’s Foreign Ministry extended firm support for inter-Korean peace talks when President Moon visited Pyongyang on Sept. 18-20 and met President Trump four days later at the UN General Assembly in New York.  But US-DPRK dialogue since June has failed to gather momentum, while escalating US-China tensions on trade have spilled over to Korean Peninsula security issues.  Pyongyang’s demands for lifting sanctions and formally ending the Korean War conflict with what the State Department on Oct. 25 stated as “final, fully verified denuclearization of North Korea as committed to by Chairman Kim in Singapore” ahead of new US Special Representative for North Korea Stephen Biegun’s visit to South Korea.  After the US-China Diplomatic and Security Dialogue in Washington on Nov. 9, Secretary of State Mike Pompeo elaborated that “this means maintaining pressure through the continued strict enforcement of all UN Security Council resolutions,” and urged China to cooperate.  DPRK Foreign Minister Ri Yong Ho renewed Pyongyang’s denuclearization commitment in meetings with PRC counterpart Wang Yi and Special Representative for Korean Peninsula Affairs Kong Xuanyou in China on Dec. 6-8, focused on the outcome of Xi-Trump talks at the G20 summit.

North Korean Foreign Minister Ri Yong shaking hands with his Chinese counterpart, Wang Yi, in Beijing on Dec. 7, 2018. Photo: Yonhap

A major highlight of China and North Korea’s approaches to denuclearization and peace was their trilateral coordination with Russia in October on the eve of Pompeo and Biegun’s visit to Pyongyang as part of the US officials’ Asia tour.  PRC and DPRK nuclear envoys Kong Xuanyou and Choe Son Hui held their first three-way talks with Russian counterpart Igor Morgulov in Moscow on Oct. 9, after Choe’s bilateral meetings in Beijing on Oct. 4-6 with Chinese officials.  The three leaders jointly identified denuclearization and peace as two processes that should proceed “in a stage-by-stage and simultaneous way,” prioritize “confidence-building,” and be accompanied by “corresponding measures” by concerned parties.  Noting the North’s “significant, practical steps for denuclearization,” they further called on the UN Security Council to move toward “adjusting sanctions.”  Attacks on Washington in the DPRK media have reinforced the divide in official positions.  Citing the State Department’s pledge to maintain sanctions based on “denuclearization first and conclusion of a peace treaty next,” a Rodong Sinmun editorial on Sept. 7 angrily declared that “dialogue and pressure can never go together.”  A Korean Central News Agency (KCNA) commentator on Oct. 16 called on Washington to lift sanctions, attacked Trump’s “bragging” over the “big progress” embodied in the Singapore Joint Statement, and pointed to China and Russia’s backing on denuclearization and peace.

China-DPRK economic exchanges and cultural diplomacy

Boosted by back-to-back visits to Pyongyang by Li Zhanshu and President Moon Jae-in in September, North Korea’s economic initiatives show greater willingness to promote development in cooperation with external partners.  Official China-DPRK interactions since the Trump-Kim summit have centered on economic development and were accompanied by a revival of bilateral economic and cultural exchanges.  These exchanges have reversed China’s stricter implementation of sanctions since early 2018, when there was a notable decline in DPRK exports to China and North Korea’s overall trade volume.  The US-China Economic and Security Review Commission’s annual report in November indicated that “China appears to have eased off sanctions enforcement,” breaking promises of maintaining sanctions until the North’s denuclearization.  It also identified loopholes in the sanctions regime including ship-to-ship transfers of banned goods, and the continued role of Chinese oil exports as “key lifelines” for the DPRK regime.

A Chinese economic and trade delegation visited North Korea ahead of National Day events, where Pyongyang showcased its shift in priorities from nuclear development to economic opening.  Air Koryo resumed Pyongyang-Dalian flights in September, reestablishing the first DPRK route between the two cities since 2006.  During Li’s visit, China’s Global Times became the first foreign media group to tour Pyongyang Cosmetics Factory, an industrial facility Kim Jong Un visited in 2015 and 2017.  According to KCNA on Nov. 16, Kim recently traveled to Sinuiju, a central hub of China-DPRK economic cooperation where infrastructure development is reportedly underway for the border city’s industrial upgrading as part of Kim’s master development plan.  A South Korean lawmaker in November even claimed that North Korea is planning to create a new government agency overseeing external opening, citing exchanges between the WPK and China’s Central Party School and upcoming training programs for DPRK officials to learn from China’s experience.  While Beijing implemented UN sanctions by ordering a shutdown of all DPRK business entities in January, recent developments suggest the resumption of business in border regions.  In Dandong, the biggest DPRK establishment Ryukyung Restaurant resumed operations one month after the first Xi-Kim summit in March, while the North Korean restaurant Morangwan reopened on Sept. 10 after eight months of closure.  Both businesses, however, were newly-registered under Chinese ownership.

Improving bilateral ties have extended to sports and cultural exchanges, another facilitator of high-level political interactions.  China’s Minister of the General Administration of Sports Gou Zhongwen led a sports delegation to Pyongyang in October, where he held talks with DPRK counterpart Kim Il Guk and watched a China-DPRK women’s basketball game together on Oct. 9.  Top DPRK officials including Vice Chairman of the State Affairs Commission Choe Ryong Hae, Vice Chairmen of the WPK Central Committee Ri Su-yong, An Jong Su, and Choe Hwi, Foreign Minister Ri Yong Ho, and Vice Premier Ro Tu Chol attended a men’s basketball game in Pyongyang on Oct. 11.  Before the game, Choe Ryong Hae, North Korea’s number-two leader who accompanied Kim Jong Un on his two China visits this year, met the Chinese delegation, which included Minister Gou, PRC Ambassador Li Jinjun, and basketball superstar Yao Ming.  The DPRK Ministry of Culture hosted a Chinese arts delegation to North Korea a month later, led by PRC culture and tourism minister Luo Shugang.  Kim Jong Un and other DPRK officials watched a joint performance by Chinese and North Korean artists in Pyongyang on Nov. 3 displaying the “bright future of the traditional friendship.”

The gradual recovery of normalcy in China-South Korea relations

Moon’s single-minded focus on maintaining momentum in inter-Korean relations and achieving peaceful denuclearization has provided collateral benefits for China-South Korea relations by emphasizing areas of common interest in the relationship.  China has welcomed South Korean-led efforts to ease military tensions on the Korean Peninsula, especially to the extent that they decrease the risk of military conflict and generate greater pressure to reduce the scope and frequency of US-ROK military exercises. Commentaries in the Global Times following the September inter-Korean Pyongyang summit proposed sanctions-easing on North Korea and questioned the sustainability of the US force presence in South Korea.  At Moon’s fourth summit with Xi on the sidelines of the APEC Economic Leaders’ meeting in Papua New Guinea on Nov. 17, he emphasized the overlap in Chinese and South Korean strategic interests in peace and prosperity and called for closer China-South Korean coordination in support of the Korean peace process.  Xi emphasized that China-ROK bilateral coordination had been “very effective in stabilizing the Northeast Asian region” and agreed with Moon that “the time is ripening for resolving issues on the Korean peninsula.”

The two sides took another step toward a return to normalcy in China-South Korea relations with the Oct. 30 visit of Tianjin Communist Party Secretary and Central Politburo member Li Hongzhong, who declared a “new stage” in South Korean-Chinese cooperation in a meeting with Prime Minister Lee Nak-yon.  Seoul Mayor Park Won-soon led a delegation of local mayors to Beijing to discuss climate change and air pollution and to promote tourism with China in late November that included a courtesy call with Premier Li Keqiang.  The two governments agreed to launch a joint research group to analyze air quality and reduce fine dust particle levels.

The restoration of high-level political exchanges between Seoul and Beijing was accompanied in early October by the restoration of sponsored Chinese group tours to South Korea, including a 900-person group from Huangzhou-based Anya Cosmetics.  China’s Customs administration reported a year-on-year recovery in South Korean investment in China and an 11.5 percent rise in bilateral trade, recovering to pre-THAAD crisis levels, with over $247 billion in two-way trade according to South Korea’s Ministry of Trade, Industry, and Energy. In addition, the two countries launched negotiations on second-phase implementation of a China-South Korea free trade agreement.

However, hitches in the full recovery of China-South Korea relations persist. In November, a Korea University student festival elicited official protests from the PRC when an autonomous Tibetan display was combined with an India booth, and booths representing Hong Kong and Taiwan were allowed separate from the China booth. South Korean progressives remain wary of Chinese intentions toward and backing of North Korea, fearing that China’s influence will inhibit prospects for inter-Korean integration. China has not dropped THAAD as an issue of dispute in China-South Korea relations.  And China’s continuing violations of South Korea’s Air Defense Identification Zone (KADIZ), near the disputed Ieo-do (Sacotra Rocks) and over South Korea’s exclusive economic zone have required South Korean aircraft to scramble to defend South Korean territory.  Recent failures by Chinese pilots to respond to South Korean communications increase the risk of unintended conflict, and the risk of conflict with Chinese fisherman in South Korean controlled-waters remains a latent source of tension.

China-South Korea relations, regional economic relations, and the China-US trade war

Despite the recovery of China-South Korea trade to pre-THAAD crisis levels, South Korean fears of overdependence on the Chinese economy have grown, and those fears have been exacerbated by South Korean vulnerability to the impact of a China-US trade war.  Because South Korea’s exports to China are highly dependent on capital and intermediate goods, South Korean experts have expressed concern about the impact of the US-China trade war on their country. The Korea International Trade Association estimated that a full-blown trade war between the United States and China would cause a 6.4 percent drop in South Korean exports and a loss of $36.7 billion. Similarly, Hyundai Research Institute estimated that South Korean exports would fall by $28.26 billion with a 10 percent decline in US imports from China. In addition, both South Korean equity markets and currency values have proven to be vulnerable to rising China-US trade tensions.

The THAAD dispute (China’s retaliation for which was estimated to have cost South Korea as much as $7.5 billion in 2017) and increasing difficulties inside China have fueled South Korean economic diversification to Southeast Asia that has taken shape in the form of Moon Jae-in’s New Southern Policy.  One economic consequence of South Korea’s diversification efforts has been a dramatic uptick in trade between South Korea and Southeast Asia and especially with Vietnam, which is now South Korea’s fourth largest trading partner and number three destination for exports behind China and the United States.  Another step toward diversification could come in the form of a South Korean bid for membership in the newly-ratified Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

There have also been costs in the form of South Korean public support for China-South Korea relations.  Over the past decade, South Koreans have grown more anxious about China in rough proportion to growth in support for the US-ROK alliance. When asked in a March 2018 Asan Institute poll to choose between the US and China in the context of continued China-US rivalry, two-thirds of Koreans chose the United States.  South Koreans believe that their country’s economic future depended on the United States rather than China for the first time since Asan began asking that question in 2014. China’s favorability dipped to the threes on a scale of 1 to 10 in 2017 and has recovered to the fours in 2018 while US favorability in Asan polling continues to hover in the six range.

Conclusion: prospects for 2019

North Korea’s National Day celebrations in September earned much applause for not featuring the missile capabilities it showed off in April 2017 and instead sent messages of peace and development.  China’s renewed economic outreach has emphasized not just traditional friendship but also North Korea’s reform and opening.  In his Chinese National Day message to Xi Jinping in October, Kim Jong Un commended the “eye-opening changes” in China’s development since its founding.  Following reports in early October that Kim would soon meet Russian President Vladimir Putin and Xi Jinping, Moon speculated at a Cabinet meeting that a “new order” was being created on the Korean Peninsula.  The South Korean Foreign Ministry appeared to follow suit with the announcement that it would soon establish a new, single-country China bureau alongside a bureau to handle affairs with Japan, India, and Australia.  But prospects for fully supporting North Korea’s regional integration appear limited in 2019, when China and the DPRK will mark the 70^th anniversary of the establishment of formal diplomatic relations, without accompanying progress in both US-DPRK and US-China relations.

On the security front, as an Asan Institute report indicated in December, there are no indications of “substantive change” in North Korean progress on denuclearization.  Regional disagreements on the Korean Peninsula’s future loomed over the eighth Xiangshan Forum on Oct. 24-26, an annual international forum on security cooperation sponsored by the China Association for Military Science and China Institute for International Strategic Studies, attended this year by North and South Korea’s vice defense ministers.

South Korean Defense Minister Jeong Kyeong-doo shaking hands with his Chinese counterpart, Wei Fenghe. Photo: Yonhap

On the economic front, China and South Korea’s cross-border initiatives with the North are unlikely to advance without an end to the deadlock in denuclearization talks that has stalled US-DPRK dialogue, and are likely to draw continued scrutiny for potential violations of sanctions.  PRC Ambassador to South Korea Qiu Guohong expressed high hopes for regional integration at the two Koreas’ joint ceremony for launching an inter-Korean railway project in Kaesong on Dec. 26, which ROK Transport Minister Kim Hyun-mee called “another step forward” in “opening the door that had been firmly closed for nearly 70 years.”  The project fulfills Moon-Kim agreements in April and conforms with Moon’s “New Northern Policy” of regional integration, outlined by Prime Minister Lee Nak-yon for President Xi and other leaders at the Eastern Economic Forum in Russia in September.  But according to the ROK Ministry of Unification, in the absence of sanctions-easing that will only come with tangible North Korean steps toward denuclearization, the recent launch remains symbolic rather than an actual step toward groundbreaking on the project.

Chronology compilation provided by Michael Strickland, San Francisco State University