The Peninsula

Jang Song-taek Returns From China

By Nicholas Hamisevicz

Jang Song-taek, Vice-Chairman of North Korea’s National Defense Commission and uncle to Kim Jong-un, returned from China after several days of meetings about economic cooperation between the two nations, especially in the Special Economic Zones (SEZs). Jang brought back agreements on further SEZ cooperation and a renewed commitment by both parties to the importance of the China-North Korea relationship. Beyond these agreements, there were no other major announcements about aid or cooperation between the two countries. However, it will be interesting to see if this trip helped lay any groundwork in convincing the outgoing Chinese leadership as well as its incoming leaders that North Korea’s transition is safe and will not damage the stability in the region.

With North Korea having already spent much of its late spring and summer reaching out to nations in Southeast Asia as well as talking to Japan, this trip was watched to gauge the status of China-North Korea relations under the new regime. Jang was sent to China as the head of the DPRK-China Joint Guidance Committee to discuss cooperation in the economic zones of Rason and the Hwanggumpyong and Wihwa Islands. His other meetings in China also focused on investments and cooperation around the economic zones. All told, his delegation consisted of about 50 people, including Ri Chol, an executive officer for North Korea’s Joint Venture and Investment Committee, which is a newly formed government office in North Korea tasked with attracting and regulating foreign investment into the DPRK. Moreover, the Committee has responsibility the Rason SEZ.

Mostly what came out of the DPRK-China Joint Guidance Committee meeting were agreements and understandings on the establishment of management committees, economic and technical cooperation, arrangements for power and energy distribution, and construction plans for the economic zones. The North Korean delegation also visited the Chinese provinces of Jilin and Liaoning for meetings with their respective Provincial Secretaries. The Yatai Group, a Chinese conglomerate out of Changchun in Jilin province, said it would build a construction materials complex in the Rason SEZ.

Interestingly, there are indications the Chinese government would actually prefer working more on the Rason SEZ rather than the Hwanggumpyong and Wihwa Islands economic zones. China initially had some concerns over the laws for these island economic zones, especially regarding double taxation and dispute mechanisms. With recent public headlines surrounding the Xiyang Group, a Chinese company, having major difficulties doing business in North Korea, getting the laws and agreements implemented correctly will be a major task for North Korea to improve economic cooperation with China. Moreover, Hwanggumpyong Island is in a flood zone, and neither North Korea or China have done much infrastructure work to bolster the construction and improvements needed for economic activity. Chinese companies along with probable Chinese government money have recently helped improve some of the infrastructure needed at the Rason port. Access to the port at the Rason SEZ seems more enticing for the development of China’s northeast provinces than to the Hwanggumpyong and Wihwa Islands economic zones, but much of the benefits are dependent on implementation, focus, and action from North Korea.

Despite the announcement from the Yatai Group, there were no big investment or aid deals stemming from the trip. There were a couple of reports suggesting that Jang Song-taek asked the Chinese for a $1 billion loan, yet there is still uncertainty if that request or something similar was made by North Korea or given by China. Moreover, with all of these meetings and discussions on economic cooperation, Wen Jiabao, China’s Premier, did encourage North Korea to use “market mechanisms” during his meeting with Jang.

The appearance of the trip was all economics, but political issues are still lingering between the two countries. The relationship has not been at its tightest this year, with North Korea informing the U.S. about its satellite launch attempt before China, capturing of some Chinese fishermen in May, and supposedly ignoring Chinese offers for Kim Jong-un to visit. Jang did meet with Chinese President Hu Jintao, where the normal pleasantries were made about the long-standing friendship between North Korea and China.

However, Jang did not meet with Xi Jinping or Li Keqiang, the expected next leaders of China. Both of them most likely spent most of their August in Beidaihae, a summer resort where top Chinese Communist Party members discuss who will be the next leaders of China. Given the timing, it is unlikely that they would have been pulled away from leadership transition discussion to meet Jang Song-taek. Early reports also suggest Jang was trying to secure an agreement for Kim Jong-un to visit China next month. If Kim Jong-un really wants to visit China before October, the North Korean leadership would have to really convince China the meeting is worthwhile to take away valuable time from the final preparations for their leadership transitions. Nothing would suggest Kim Jong-un needs to see Hu Jintao or Wen Jiabao before they leave office. Thus, Kim Jong-un visiting China before the transition would mainly be about economic cooperation and showing he can handle North Korea-China relations. It could also possibly be a fear that if he waits until after the transition in China takes place, Xi Jinping and Li Keqiang would rather meet with other leaders first, delaying Kim Jong-un’s visit for an undetermined period and creating some uncertainty of bilateral relations.

The overall goals of Jang’s trip appears to be an attempt to gain more support for projects within the economic zones, maintain strong relations with China, and demonstrate that the transition to Kin Jong-un is safe and will not hinder China’s influence in the region. These agreements might be the next step after the SEZ law developments; however, implementation will likely have to be smoother for North Korea and China to gain from the SEZs advancements. China will continue to help North Korea, and the appearance of greater economic cooperation along the border is fine for China, yet actual progress will still need to be made in order for the new Chinese leadership and the rest of the world to decide if Kim Jong-un’s regime is different from the previous ones.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo from ezioman’s photo stream on flickr creative commons.