China eyes North Korea's minerals; what's next?
A truck runs on a bridge on the China-North Korea border on April 8, 2008 in Linjiang of Jilin Province, China. Linjiang, Linjiang is situated at the hinterland of Changbai Mountain in southeast Jilin Provincewhich borders North Korea over the Yalu River. It faces the third mine of North Korea, which mainly produces copper, molybdenum concentrates and tungsten concentrates. (Getty Images)
December 27th, 2011
10:59 AM ET

China eyes North Korea's minerals; what's next?

Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy.  It leverages a global network of subject-matter experts via a patent pending crowd-sourcing methodology to provide unique insights.

Reuters reported that North Korea’s government will shift – for now – to rule by committee instead of by an all-powerful leader.  Most likely, a factional truce was worked out in advance of Kim Jong-il’s death.

This deal splits power among successor-son Kim Jong-un, a couple of regents from Kim Jong-il’s elderly generation and the North Korean military. It’s a generational split with the military as the fulcrum.  This makes it inherently unstable.  Young Kim’s coterie of supporters will want to expand their control over time, and Old Kim’s aged cohort won’t give up without a fight.

Kim Jong-il so mortgaged himself to the generals in his “military first” policy that they already hold most levers of power, including the all-important relationship with China regarding North Korea’s nearly $7 trillion’s worth of mineral wealth.

North Korea’s bankrupt regime, lorded over by the military, is letting Beijing strip the place clean of everything left worth buying - at bargain-basement prices. If Kim Jong-un goes along with this, China will most likely continue to support his spot on the ruling committee - or help him consolidate power unto himself.

Beijing will support whatever ruling package keeps the minerals flowing and North Korea’s half-starved population south of its border. Sure, China would like if somebody in authority eventually pulled off a Deng Xiaoping-like economic transformation in North Korea, liberalizing the economy, but on Beijing’s wish list, that places a distant third.

Given Kim Jong-il’s death, what possible futures lay ahead? Wikistrat, the world’s first massively multiplayer online consultancy, ran that scenario drill last February, updating our deathwatch calculations just a few weeks ago.  Here’s the three narratives we’re playing with now:

– Best case: Slow liberalization-by-committee.  In in this scenario, either Kim Jong-un or his uncle Jang Song-Thaek open North Korea to special economic zones, north and south, that let in, respectively, Chinese and South Korean direct investment. Over the years, the two neighbors achieve trustee-like control over North Korea that leverages China and South Korea’s financial heft. Meanwhile, North Korea opens up its doors and relaxes its economic and political constraints upon the population.

– Middle path: More of the same.  In this scenario, the North Korean military steps back just enough to let Kim Jong-un’s generation wipe out the Old Guard over time, using the pretext of “foreign aggression” to stage the usual purges. As Beijing signs off, Kim Jong-un can prove he’s got the old man’s guts, successfully grab the reins of power and salute the generals with a reasserted “military first” policy. This way, China retains North Korea as a thorny prod to the U.S., which is committed to strategically “pivoting” to East Asia.

– Worst case: A Chinese-backed military dictatorship. If things get really bad, Beijing might simply extract all the mineral wealth it can before turning over the carcass of North Korea to South Korea and the Americans for the super-costly rehabilitation.

Spot Washington anywhere in these scenarios?  You can’t.

Truth is, the Obama Administration painted itself into a corner.  By sticking to its non-proliferation guns, the White House can’t take any real advantage of the succession process since any breakthrough diplomacy of the sort desired by both Pyongyang and Beijing (e.g., a peace treaty to finally end the Korean Conflict) would directly contradict the administration’s oft-stated desire to create a “world without nuclear weapons” (along with its decision to appear strong vis-à-vis the “rising Chinese threat” during an election year). Any peaceful overture to North Korea would enable the Republicans to demonize Obama for “caving in to nuclear blackmail.”  Those attack ads simply write themselves.

Now, in Wikistrat style, we’d love to hear from you in the poll below. Which scenario do you find most likely. If you envision something different entirely, share it in the comment section below.

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Topics: North Korea

soundoff (34 Responses)
  1. darketernal

    Its horrible that the focus lies on money while thousands of North Korean people suffer in concentration camps and are still going thru hell every day , i mean i know money is important and all, i am a bussinesman myself, but there are lines where you do not do bussiness anymore with people if their ethics are worse then how animals are treated here. Seriously its too shocking, do you want to be like the Chinese that left that Chinese girl to die , simply because its non of our bussines? Something to think about.

    December 27, 2011 at 12:41 pm | Reply
    • Diane

      I've think about it a lot. Thank you for your comments. I get so frustrated that the United Nations will intervene to protect the citizens of a country from government abuses of basic human rights when the consequences are minimal.....and then turn its back on the most severe cases either because of political backlash and/or economic instability. It's sad to think that World Peace is a fairy tale.

      December 27, 2011 at 5:27 pm | Reply
    • Lokans

      People always speculate intentions of other's the way they think. the US fabricate excuses and launch warfare, grab resources and leave chaos behind. the ameircan, especially those never been overseas, don't have an open mind towards the world, just keep advocating hate, envy or so. If you ever talk to a chinese, he would very likely tell you that we are willing to see N.K. people open up economically and politically, to see they get better off. that would help the regional peace and for the mine, we have no interest. hope your america don't have either. that belongs to N.R. residents.

      December 27, 2011 at 6:58 pm | Reply
      • ron

        china has no interest in n.k. ? what a joke.if it wasnt for chinese intervention in the korean conflict ALL of korea would b free now. china is the model of repression that n.k. follows...ask the Dhali Lama what he thinks about china...its not about hate...its about reality. the chinese gvmt is as brutal and repressive as any form of gvmt that ever exsisted on this planet....

        December 27, 2011 at 7:40 pm |
      • davidmd

        @ron well, the other also can say without U.S.A interventions in Korean peninsula ,korea would have been unified 50 years ago, or to all the world, without U,SA. invasion and interventions& looting the resources , all of the world would be free of repression, foreign exploitation , bullies ,wars .... from America , ask dalie lama? why dont u ask the islamic world, Africa, Asia ,south America how much they hate America for its crimes committed on them and chinese govetment might not be good, but U.S. is surely most evil most dark most greedy country all of the world in last 60 years of human history.

        December 27, 2011 at 11:55 pm |
      • sam

        Who is responsible to Koren be devided? which country still has occupied military in Koren now? If there were no foreign military invasion, Koren is a united coutry now. China is not the foreign force who entered Koren War first, China do not have army stay in Koren after the war. Which country want peace, make peace in Koren? Which country devided Koren, sitll have army there?

        December 28, 2011 at 10:22 pm |
  2. Chris, Austin

    I think that the Chinese government's policy of keeping North Korea totally dysfunctional while stripping the country of mineral wealth is probably their vision for Afghanistan, as well. I think they prefer their neighbors to be completely failed states without sufficient organization to charge China a fair price for their resources, but not so failed that chaos ensues which will interfere with them getting those resources into their hands.

    Myanmar seems to be waking up and pulling itself out of this trap, witness the steps towards democracy, and the cancellation of the Chinese dam project. I hope they continue down this path, and that they act as an example for other Chinese client states.

    December 27, 2011 at 1:06 pm | Reply
  3. Ohmybuddha

    I've voted for (Gradual) liberalization. I think their military holds the key, especially younger generations who don't hold power yet, just are fortunate being in the military, and whose non-military relatives are starving. My wishful thinkging is they will come out honorably to do right things for their people, their starving families and relatives.
    Like the legend of King Arthur in England, there are legends and honorable figures of history in another countries too. Korea has some too. And time like this today those stories are as strong and inspiring as religion can be. I hope.

    December 27, 2011 at 1:14 pm | Reply
  4. luvUamerica

    China is stripping Myanmar/Burma clean at bargain basement price. In return, it backs the military regime. When Clinton visited Myanmar, Myanmar's military general was summoned to Beijing. China does have absolute control over North Korea, Myanmar and any other country it can influence. So much for it's "non-interference" policy.

    December 27, 2011 at 1:33 pm | Reply
  5. tony

    Deja Vu for the British Empire? And the post WW11 Middle East, and the US taking South America for all it had. Why the concern now?

    December 27, 2011 at 1:34 pm | Reply
    • edward

      >> Deja Vu for the British Empire? And the post WW11 Middle East, and the US taking South America for all it had. Why the concern now? <<
      this is typical argument used by the chinese government. here are two problems with your logics:
      1) there were murderers in your country. does it mean you should legitimate murders?
      2) there is a significant differece in the magnitude of the disasters caused. do you know whom in other countries the chinese government called as their close friends? they are joseph stalin, ho chi minh, pol pot, kim jong il, moammar gadhafi. i suggest you read some basic history to know about how many human beings were killed by these individuals.

      December 28, 2011 at 12:43 pm | Reply
  6. Tyler

    Part of NK's entire ideology is that the U.S. and Western powers are their primary aggressors. Nork Korea absolutely will not give up their nuclear weapons program and research if we ask them. So let them keep the nukes. But also let them know, at least for now, that if they pull anything, they are surrounded on all sides by enemies who have many more nukes and much stronger militaries that will grind the country into a powder. I think China has too much vested interest in global politics to really help them again like in the Korean War, so they probably won't jump in if a conflict arises. We should fight hypothetical fire with hypothetical fire and really hammer it to Pyeongyang that the world has weapons pointed at them at all times (which they probably already know). Then, we can open the doors to cooperation and North Korea can once again know true prosperity.

    December 27, 2011 at 1:42 pm | Reply
    • rude dog

      sure, lets give them more money to buy more nukes.

      December 27, 2011 at 2:50 pm | Reply
  7. Larry

    I agree that NK is never going to give up their nuclear weapons program. I think the US has kong been facing a dead end with that strategy and needs to move on. Why don't we try some direct investment instead?

    December 27, 2011 at 2:04 pm | Reply
  8. Skeptic

    This is all speculation, and wishful thinking. Koreans are the direct decedents of Mongols and they will listen to anyone, especially the Chinese. They only want milk from China, free of charge.

    December 27, 2011 at 2:09 pm | Reply
  9. j. von hettlingen

    There are signs that the North would open up the country for foreign investments. A delegation of mourners from the South were in Pyongjang for two days. One was led by the former first Lady Lee Hee-Ho and the other by chairwoman of the Hyundai Car Company, Hyun Jung-eun, The late Kim Jong-il offered both women his condolences when their hausband died. While in Pyongjang the two women were also received by Kim Jong-un. Lee Hee-Ho is widow of the late Kim Dae-jung pioneered what became known as the Sunshine Policy, trying to engage the North through diplomacy.

    December 27, 2011 at 4:07 pm | Reply
  10. Ken

    The "worst case" isn't the worst case. Worst case is along the lines of conflict in the ruling elite for the spoils of power, breakdown in order, refugees fleeing north and south and then intervention from China. Total chaos on the peninsula.

    Given that the country is a kleptocracy we shouldn't be too certain of ANY benign outcomes – it is ALL about the money.

    December 27, 2011 at 6:00 pm | Reply
  11. Tony

    You forgot "pre-emptive invasion by the South led by the US"

    It would be over in days and prevent any bloodshed by the North by making the first move.

    December 27, 2011 at 6:25 pm | Reply
  12. davidmd

    this fareed ? something from Pakistan or india , with a ugly face, always makes up stroy on its own baseless imaginations, and especially with a nasty tone and foreign accent as if he were the king or something overlooking all the countries , had enough with this chap

    December 27, 2011 at 11:42 pm | Reply
  13. soliterry

    There is no denying that China is after North Korea's minerals perhaps because they want their fair share of losing 1 million people in Korean War? From the Chinese perspective this is an opportunity they cannot pass in order to stand shoulder to shoulder with America.

    December 28, 2011 at 3:18 am | Reply
  14. Mike

    If we would have let MacArthur do his thing back in the 50's, we wouldn't have these problems today.

    December 28, 2011 at 9:50 pm | Reply
  15. Sam Rupani

    Good Evening.

    If North Korea wants $7 trillion for mineral wealth, we can get for him now by selling to Germany.

    China can go to Africa to get all mineral or talk to me my Matrix system can do in few clicks in 10 minutes.

    DRC is excellent country to get minerals on this planet.




    Sam Rupani

    Houston, Texas, USA.

    December 28, 2011 at 11:35 pm | Reply
  16. Kate Almona

    When China eyes North Korea's minerals, It is not only the minerals but the Leadership. As long as both Countries share the same political beliefs/idealogy to wit Communism, Beijing will still want to have a stronghold on North Korea leadership. But in the present scenerio, it will be a bit difficult because the young lad/ leader still has the effects of Western influnce in him. So China will have a lot of forces working against it.

    January 9, 2012 at 12:52 pm | Reply
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