China changes game in N. Korea

With floods of cash and a new policy of patience and friendly support, China has quietly penetrated the thick wall surrounding North Korean leader Kim Jong Il's regime - gaining significant leverage for the first time in one of the world's most closed societies. Chinese leaders have gained Mr. Kim's ear, sources say, with a message that the North can revitalize its economy while still holding tight political control.

In the past year, with Washington preoccupied, Beijing has bypassed US hopes that it would squeeze Kim and force him to drop his nuclear ambitions. Indeed, the once-heady "six-party process," started in 2003 to denuclearize Korea, appears defunct. Instead, Beijing pumped up investment to some $2 billion last year, and is helping to rebuild ports, create factories, and modernize energy sectors in what one US diplomat calls a "massive carrot-giving operation." Yet Beijing is not using such aid as a means to end the North's nuclear program.

"China has decided to change its strategy on North Korea, and is looking beyond the six-party talks and the American approach," says Alexandre Mansourov of the Asia-Pacific Center for Security Studies in Honolulu. "They want to go their own way, and have decided to raise up North Korea again, to rebuild and reinvent it.

"For the first time," he adds, "Kim has fully embraced Chinese reforms."

"Any illusions in Washington that China will be complicit in helping to bring North Korea down, should be set aside," argues a diplomatic source close to both Beijing and Washington.

Indeed, following Kim's January visit to China, where he was feted in the Great Hall, North Korea seems to be behaving nearly like a Chinese "client state," a term used by knowledgeable sources to indicate the close nature of the relationship.

Kim arrived in the middle of China's 11th five-year-plan budget process, and he toured the model reform cities of Shenzhen, Guangzhou, and Zhuhai in the southern Pearl River Delta. Various Chinese officials used the word "shocked" to describe Kim's reaction to the scale of China's showcase reform zone, with its endless miles of crowded factories - sometimes called the "workshop of the world" - that supply Wal-Mart, Costco, Home Depot, and other US megastores.

The extent of the North Korean leader's shift in thinking may be measured by Korean Central News Agency releases after he returned to Pyongyang.

For the first time, KCNA commented positively about China's opening and reform. Previously, Kim called China's historic move to market reform, engineered by paramount leader Deng Xiaoping in a visit to the same cities that Kim visited, a "betrayal of socialism." After Kim went to Shanghai in 2001, KCNA stated that while market reforms might be good for China, they were not correct for North Korea.

Yet on Jan. 18, KCNA published a speech by Kim at the Great Hall, in which he stated flatly that, "our visit to the southern part of China convinced us ... that China has a rosier future thanks to the correct line and policies advanced by the Communist Party of China." South Korean media last week reported that the impoverished North, whose economy is in shambles, was gearing up to make its border region of Sinuiju a "special economic zone."

China is revitalizing the North's infrastructure and accounts for 40 percent of its foreign trade, according to a new study by the International Crisis Group. Eighty percent of the North's consumer goods are made in China.

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