A Sino-Russian Rivalry over North Korea?

October 23, 2014 7:00 AM

Back to the future, the northern part of the Korean peninsula is beginning to resemble turn-of-the-(20th)-century Korea, with a decaying dynasty and foreign powers vying for influence.

Further demonstrating his nostalgia for the Soviet Union, President Vladimir Putin’s revanchist Russia is making a bid to re-establish its influence in North Korea. With a history of playing suitors off against each other (when will we ever learn?), Pyongyang appears to be more than a willing dance partner. As Steph Haggard observed in an earlier post, Russia has written down Soviet era North Korean debt, signaled willingness to invest in a number of projects in the extractives sector, as well as gas terminal and a land freight terminal in the North Korean port of Rason. North Korea has simplified visa procedures for Russian investors, including unprecedented rights to use their cell phones. Russia has responded by including the Rason region in its $23 billion plan to develop its Far Eastern provinces, and has been pushing the extension of the east coast rail line to South Korea, and touting plans for a gas pipeline. South Korea has announced a pilot project to import a small quantity of Russian coal via Rason.

Form appears to be following function. Last month, Rodong Sinmun gave front page coverage to a congratulatory message from Putin on the 66th anniversary of the nation’s founding, while burying Chinese President Xi Jiping on page 3. (At least he was fully clothed.) And it wasn’t an aberration: the paper placed a message from the CCP congratulating North Korea’s leadership on page 3, alongside Kim Jong-un’s congratulatory message to Syrian President Bashar al-Assad for his upcoming birthday.

It has not gone unnoticed that President Xi has met with South Korean President Park Geun-hye multiple times, while managing to avoid Kim Jong-un. And as any economist will tell you, when the Finance Minister has to publicly deny an exchange rate devaluation is planned, it’s time to short the currency. So when the octogenarian head of the Supreme People’s Assembly, Kim Yong Nam is wheeled out to assert that everything is good between Beijing and Pyongyang you know that, well, the marriage is troubled.

In the words of the Chosun Ilbo, the showpiece Hwanggumpyong Island project “looks derelict.” Never the most promising of ventures, the conservative newspaper asserts that the project died with its patron, Jang Song-taek. And at this year's trade fair in Dandong, North Korean participation is down 30 percent. The number and value of business deals were apparently down as well.

Presumably this tilt toward Moscow—however justified as a means of diversifying political and economic contact— is a temporary blip: the case for North Korean-Chinese economic integration is overwhelming. In the meantime, however, Pyongyang seems happy to dance with its old partner wearing new duds.  To the south, Seoul says that it is holding firm on sanctions. But will insecurity and jealousy win out?



As mentioned before, US-policy in sanctioning Russia was one of its biggest political mistakes, firing back.
You see: Just a couple of days ago, a ground breaking ceremony was held in Pyongyang (with a Russian high ranking delegation) to begin with the modernization of Pyongyang-Nampo railway, which also connects very important coal mines. Contractor is Russian giant NPO Mostovic.
Real big investments under discussion now.


It's just plain simple realpolitik. Some people in North Korea surely read the classics from Germany when getting their education in East Germany (the two kept connected until the very end of East Germany, which is also a great archive for North Korea, which so far is unfortunately hardly used because of the language barrier). Russia is pissed at the West because of the issue with its Ukrainian aggression of taking Crimea and trying it in other parts. West put out lame sanctions, Russia did something equally lame (as in not actually hurting the other side) by giving some candy to KingKimIII. Kim, or whoever decides such things at the the management level, is gladly accepting the candy and shows it to China to make China believe it has competition, something which was already tried since the new Kim got to the throne. The way he grew up, I bet his wish is to get his country "diversified" enough so that he can enjoy a glamerous life like Ghaddafi did after giving up his poor attempt on nukes. People usually think he is some kind of evil person but there is little he can do on the short term. To change things, he would need some trustworthy people in powerful positions next(I mean under) to him and make complicated plans, calculations etc. I'm doubtful the North Korean administration can even accomplish that. That's also where I think Kim should be wary about Russian promises. Everything in Russia besides the army and oil/gas extraction are rotten to a degree most people here could not even imagine. The Russian state has a huge bureaucracy that is all-corrupt. Even with strongman Putin's pet projects, atleast a third of the money will just disappear.

walter clemens

where are the GDR-DPRK documents?

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Marcus Noland Senior Research Staff

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