North Korea's border trade getting busier

The regime's collapse looks less likely as trade rises 20 percent a year.

That North Korea is or will soon be on the verge of collapse is a cherished hope in influential White House circles. But here at the biggest trading point between China and North Korea, few believe that will happen.

For Chinese flooring and seafood salesmen, drivers, brokers, and local officials who deal with the North, the economy across the river is getting better.

Each morning trucks line up on either side of a narrow "friendship bridge" across the Yalu River, between Dandong's high-rise world and the stunted skyline of sister city Sinuiju. The 225 daily trucks cross into Korea from China, making up 70 percent of the North's imports. And the traffic is increasing. North Korea's trade has risen 20 percent a year, to $1.2 billion, and it doubled in the last quarter of 2004.

This traffic visible on a recent trip to the border, as well as conversations in Asian capitals and in Washington, all suggest that the position of North Korean leader Kim Jong Il is not weakening, and that the uptick in economic activity represents a new lifeline for the regime.

The cargo trucked between the two worlds is a study in contrast: Korean open-bed trucks bring in scrap iron, crushed rock, sacks of mineral powder. Freight trucks are empty save a few boxes rattling inside. But Chinese trucks to Korea hold electrical equipment, stainless steel goods, gleaming appliances. Ocean-ship containers marked "GenStar, San Francisco," and from Europe, ride on flat beds. One mammoth vehicle sports 82 commercial refrigerators. Destination: Pyongyang.

North Korea is enjoying new investment as well. The Chinese have built a glass factory and revamped two steel factories. Chinese investors hoof it around the North as China imports coal and encourages trade. South Korea's Kaesung industrial park in the North is one of many small new cash sources from Seoul.

With North Korea declaring itself a nuclear state in February, and with the six-party talks on hold now for 10 months and in an unclear status, the stability of the North is a crucial question. US policy has been dominated by "collapse theory" advocates who argue the North is on the brink of chaos. Last December Western media buzzed with reports of Kim Jong Il's pictures being removed, and with talk of grumbling among the North Korean masses.

Yet barring a disaster or unforeseen crises, the assumption of a North Korean collapse appears wishful, and is a scenario taken less and less seriously by US partners in the six-party talks. Indeed, it now appears the theory of collapse held by influential voices in the Bush administration has itself collapsed among US officials and analysts working closest on North Korean issues. Critics say the US doesn't yet have a Plan B.

In reporting this story, a senior Pentagon intelligence official, State Department sources, diplomats living in Pyongyang, and a variety of other experts - suggest that to pin US hopes on a collapse of the North, or on persuading Beijing to induce collapse, is folly.

"I would love to see the North collapse," says a senior US diplomat. "But I don't think hope is a substitute for policy."

Neither China nor South Korea see it in their national interest to allow North Korea to collapse at this point, and both are tacitly committed to keeping the reclusive regime of Kim Jong Il, stable.

"In the US, collapse theory still has a lot of adherents and may be the dominant policy prescription," says Timothy Savage of the International Crisis Group in Seoul. "The problem is, the theory relies on the cooperation of the two countries least inclined to cooperate, China and South Korea."

The regime of Kim Jong Il is one of the most reclusive states in the world, and has often been compared to a huge cult, since the 23 million inhabitants are required to worship Kim, and to serve him through a complex ideology called Juche. Experts point that the central contradiction of the North is that to expose the North society to the outside world would also expose the fallacies of Juche and the structures of control.

Still, in the short and mid-term, there are a myriad of supports that Kim can count on: Trickles of food and fuel aid continue to arrive, as do cash infusions from both legal and illegal trade. Kim has continued to pursue small scale restructuring and market reforms that have started to create a cash economy.

"The amount of goods coming into the North doubled last year," says a Russian diplomat who lives in Pyongyang and visits Dandong. "The Party and the Army in Pyongyang have money. They carefully spend where they need to. It doesn't look like collapse to me."

To be sure, few if any analysts of Asia will rule out collapse involving a volatile state like North Korea.

But lacking an imminent collapse of the Kim regime, the problem for Washington is that Kim may have little incentive to come to the bargaining table and give up his nuclear program.

"I don't think we have any way of forcing Kim to give up his weapons," says a veteran Pentagon adviser. "If South Korea and China would really play, we could put on the pressure. But China can't tolerate collapse - and what that would mean."

A collapse could well bring the US military to the border of China, and could start a refugee flow and security crisis - with a roiling set of North Koreans mingling with hundreds of thousands of Chinese Koreans.

Veteran Kim-watchers say that from a Kim dynasty perspective, the reclusive leader is in a better position than two years ago. US military forces did not move quickly in and out of Iraq. The White House has been unable to focus on North Korea.

Meanwhile, Kim's diplomatic relations with China, South Korea, and Russia have steadily improved. Chinese No. 1 Hu Jintao will visit Kim as soon as next month. Russia's Vladimir Putin, whom Kim has twice visited, calls him a "man I can deal with," and Moscow recently discussed a gas pipeline with Kim.

Even Pyongyang's relations with regional states like nearby Mongolia have taken a beneficial turn. The droughts and floods that brought famine in the late '90s have not repeated.

This year is the 60th anniversary of the Kim family dynasty, a special date in Korean folk lore.

"In Kim's view, he has developed missile technology, nuclear power, and has so well engaged South Korea that the government in Seoul will work with him as he desires," says Alexandre Mansourov, Pyongyang specialist at the Asia-Pacific Center for Security Studies in Honolulu. "He believes he is on the right track, and he can rally his people to a proud view that 'We can endure a lot, and we can win. We can beat the world.' "

In public statements about the six-party talks, top US officials have consistently given the impression that Washington is successfully isolating Kim, since all parties want no nuclear weapons on the peninsula. The statements appear to suggest the scorecard is "5 to 1" - with five nations, led by the US, lined up against the North Korean leader.

In fact, almost the reverse is true. The actual scorecard of the six-party talks may be closer to "4 to 2," with only Japan aligned with the US in demanding a complete and immediate dismantling of the North's nuclear program.

These factors, however, seem extremely remote in a border town like Dongdan.

As trade with the North increased, Dandong began to refer to itself as the "Sleepless city of fortune and business opportunity."

The bridge to the North is one lane, and Chinese trucks and the mostly Japanese-made trucks from the North alternate crossing. Trucks come across, spend the day, reload, and go back.

A North Korean pedestrian shuttle service of white vans also operates. Across the river one can see a Ferris wheel with blue and red seats. It sits immobile; no one has seen it turn for more than a decade. At night, the town of Sinuiju is nearly pitch black, no electricity - while Dandong has a plethora of neon.

One Chinese warehouse owner says the minds of Koreans are "still very controlled. But they are opening slightly."

On weekends and holidays, parties of newlyweds hire speed and travel up and down the river close to the North Korean border with women in gowns and men in tuxedos waving at the North Koreans, who are scrubbing rusty fishing boats.

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