Key Points

Current Situation in North Korea: Views from China

Chinese Views of the Food and Economic Crisis in North Korea

North Korean Responses to Crisis

Implications for North Korea's Political Stability

Implications for Northeastern China

The Growing Influence of South Korea

Impact of North Korea's Crisis on Northeastern China

China's Strategic Options toward the Korean Peninsula

Views of North and South Korea

U.S.-China Relations and the Korean Peninsula

About the Trip

SPECIAL REPORT 27

North Korea's Decline and China's Strategic Dilemmas

Scott Snyder

Implications for Northeastern China

Adjustments in the balance of power on the Korean Peninsula in favor of South Korea have had a significant impact in northeastern China. South Korea has become an important source of trade, investment, and economic growth, while North Korea's relative poverty threatens to spill over the border in the form of demands for food and the emergence of hundreds of refugees from North Korea who have crossed the border in search of food. China's official relationship with South Korea is only five years old, but the momentum for closer economic relations (and closer political ties) is growing quickly, while North Korea's former influence and shared ideological ties are dying with its first-generation leadership.

The Growing Influence of South Korea

The Sino-South Korean economic relationship has blossomed rapidly since the establishment of official relations in October 1992. This momentous political shift from China's traditional relationship with North Korea was facilitated by economic ties with the South that had already grown to $3 billion per year by 1992 from zero in the mid-1980s. Since normalization, the pace of growth in Sino-South Korean economic relationship has only quickened, as bilateral trade reached $20 billion in 1996 (a 25 percent increase over the previous year). Rapidly growing South Korean investments have concentrated mostly in northeastern China, particularly in the Shandong and Liaoning provinces. Foreign direct investment from South Korea has grown from $2.74 billion in 1995 to $4.2 billion in 1996, a 41 percent increase. Over 160 small and medium South Korean firms have extended investments into Jilin Province, and South Korea is the third largest investor in Jilin Province behind Hong Kong and the United States. The Yanbian Korean Autonomous Prefecture, with its sizable ethnic Korean population, is one area within Jilin Province where South Korean investment has found a natural home. However, the real attraction of Yanbian for South Korean investors has been as a potential jumping-off point for future investment in North Korea.

Following normalization and particularly within the past two years, there has been a steady rise in individual visits between South Korea and China that support economic exchange. Korean-Chinese have sought both legal and illegal entry into South Korea to earn money doing low-end jobs. South Korean tourists have traveled to China and particularly to the Yanbian Korean Autonomous Prefecture, site of Mount Paektu, the mythological birthplace of the Korean people. This flow of exchanges had reached 700,000 in 1996, according to South Korean Foreign Minister Yoo Chong Ha. Such exchanges have clearly provided new sources of capital and investment to the Korean-Chinese citizens of Yanbian.

In addition to benefits from increased investment from South Korea and increased work opportunities within South Korea, Seoul has become a new cultural resource for Korean-Chinese residents in Yanbian. However, local residents also complain that the growth in tourism from South Korea has also brought with it negative effects, including the "ugly Korean" syndrome, in which affluent visitors from the South flaunt their wealth and success in a deprecating manner before the Korean-Chinese, and an increase in the incidence of sexually transmitted diseases spread by some South Korean tourists.

Impact of North Korea's Crisis on Northeastern China

While South Korea's growing economic influence has had a positive influence on economic development in China's northeastern provinces, North Korea's food crisis has created the prospect of instability along the border, leading to an increase in flows of refugees and putting stress on the local Korean-Chinese community to provide food to help starving relatives in the North. These two developments have significant implications for management of China's official relations on the Korean Peninsula. Regional officials are on the front lines in managing concrete aspects of policy toward North Korea. The immediacy of problems stemming from North Korean instability may provoke differences in reactions between local officials, who are interested primarily in attracting investment from anyone who is willing to provide capital, and policy planners in Beijing, who may be primarily concerned with management of geopolitical and international relations concerns. The two concrete policy responses required from local Chinese officials are management of the North Korean food issue and the prospect of increased flows of North Korean refugees into China.

China has provided aid to North Korea through three different means: government-to-government aid, subsidized trade (disguised aid), and barter. Conversations with Chinese scholars suggest that it is proper to assume that China's contribution in recent years has averaged at least one million tons of grain per year. Recent customs figures show that at least 60,000 tons of grain per month have come across the Sino-North Korean border, and there are reports that unrecorded transactions regularly occur after the customs offices close each day. Another way of calculating China's grain contribution is to count announcements of national aid (approximately 140,000 tons in 1996 and 150,000 for 1997 through the first eight months of the year), national trade statistics (including 500,000-plus tons of wheat flour) and provincial trade statistics (approximately 100,000 tons of grain each for Liaoning and Jilin provinces, counted separately from the national figures, according to analysts of China's statistics collection process), and estimates of the amount of grain bartered by the Korean-Chinese community or delivered as part of supply to families (estimated at over 100,000 tons in Jilin province and possibly similar in Liaoning province). Although there are risks of double counting, analysts of China's statistics collection process suggest that undercounting may also be a distinct possibility.

Additional evidence of China's generous policy of allowing and possibly even encouraging grain transfers into North Korea on an unofficial basis include the following:

• Jilin Province--which had such a bountiful grain harvest in 1996 that local officials have complained at a recent Party Congress about a lack of storage space--has been excepted from a nationwide ban on grain exports instituted in 1994. (Much of this grain is known to have been directed toward populations in grain-deficient provinces in southern China, but some may have found its way to North Korea.)
• The limit on the amount of grain that members of China's ethnic Korean population are allowed to take to their relatives has reportedly been raised to 1,000 kilograms of grain per individual. (The size of such deliveries might be measured in truckloads, rather than knapsacks.)
• Chinese scholars report that Jilin provincial officials provided a previously unreported 100,000-ton contribution in 1995, leaving open the possibility that subsequent contributions on a provincial basis may have gone unreported.

The other major potential challenge resulting from North Korean instability has come in the form of refugee flows, primarily into border areas of Jilin Province. As the food crisis heightened through fall 1996, social controls within North Korea loosened and signs of social instability in North Korea grew as it became necessary for many ordinary North Koreans to forage widely for their food. Greater movement within North Korea was permitted, and North Korean border controls became more lax, creating flows of refugees in numbers great enough to get the attention of Chinese authorities. Although South Korean media report that Chinese border camps are under construction and as many as 3,000 North Korean refugees have already crossed into China, Chinese academics deny both stories, putting the refugee count at less than 1,000, a number that the ethnic Korean community in China might be able to absorb.

Even after coming to Chinese territory, North Korean refugees have few options available to ensure their survival. They usually cannot speak Chinese and are easily distinguished from local populations outside of the border area by their dress, mannerisms, and lack of Chinese identification. Northeastern China has its own problems with unemployment and the "floating population" of unemployed Chinese, which further limits survival options for the North Korean refugee population.

Requests for asylum by ordinary North Korean refugees to South Korean consular authorities in China are easily ignored by South Korean officials in favor of high-profile defectors with potentially useful information, while Chinese authorities--concerned primarily with internal stability--claim to be bound by terms of a mutual repatriation treaty with North Korea. Refugees are returned to North Korean authorities to face punishment and likely death. Despite widespread knowledge of the fate of these refugees, one Chinese academic in Liaoning province emphasized that China has a humanitarian refugee policy: first the refugees are fed, and then they are returned to North Korea in accordance with treaty obligations. In recent months, North Korea's social controls appear to have loosened to the point that the practice of executing returned refugees has slackened; Chinese authorities are finding that some of those refugees who have been turned over to North Korea have subsequently resurfaced in China.

Chinese local authorities may seek to avoid this dilemma by providing limited access in border towns to North Korean public security officials who are allowed to operate in Chinese territory, catching and returning North Koreans who may have risked an illegal border crossing. To the extent that the ethnic Korean community in China is capable of managing and absorbing refugee flows without creating instability, local authorities appear to have adopted a policy of looking the other way as much as possible.

Official avoidance extends far enough to allow South Korean nationals and members of the Korean-Chinese community to support a limited "underground channel" through which some emigration has been possible, including cases earlier this year in which whole families made their way from North Korea to Hong Kong and eventually to Seoul with the financial help of relatives in South Korea and the United States.

Conditions in China are sufficiently restrictive, and some North Korean illegal visitors are sufficiently loyal to their families and villages, that it is common for North Koreans near the border to make brief foraging expeditions to gather food on the Chinese side of the border. Some Chinese villagers near the border are reported to simply leave food outside at night for North Koreans who may make night-time excursions across the border to look for food. One North Korean refugee from Kyongsong County, North Hamgyong Province, said, "China is a place where one can actually live off the land and eat three meals a day, compared with the hell I came from." Yet after a stay of several months in the Chinese border area, he had no choice but to return to his family in North Korea after South Korean authorities rejected his request for asylum.

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See the complete list of Institute reports. The views expressed in this report do not necessarily reflect those of the United States Institute of Peace, which does not advocate specific policies.