A large number of North Korean businesspeople working in China's northeastern cities of Dandong and Shenyang were recalled to Pyongyang on Dec. 15. The move is believed to be related to the ouster and execution of Jang, who spearheaded many investment programs along the Sino-North Korean border. So far, major projects in the Rason Economic Zone on the border appear unaffected. A new agreement on a highway linking Beijing and the North Korean-South Korean industrial park of Kaesong via Pyongyang also seems to have remained intact. Together with North Korea's continuing desire to upgrade Kaesong, these measures could convince outsiders that Pyongyang is still committed to economic change. Still, the purge, along with the reshuffles that are likely to follow, is raising uncertainty about trade and investment between China and North Korea and about signs of strain in the countries' relations since Kim Jong Un took power.
Jang had close and long-standing ties to China, which considered his influence on the North Korean regime — from the late Kim Jong Il's reign to Kim Jong Un's — as the best means of getting Pyongyang to act in China's interests, particularly by maintaining stability and undertaking a Chinese-style economic transition. Jang's ties with China were once his greatest strength, allowing him to build up his own power base and personal wealth. Yet when Kim Jong Un became North Korea's leader and the regime's uneasiness over its dependence on China grew, Jang's strength became his greatest weakness.
Despite China's repeated statements that the purge is an internal North Korean affair, Jang's sudden execution and the coming consequences apparently unnerved Beijing. On Dec. 16, Chinese Foreign Minister Wang Yi stated that China is closely monitoring the implications of Jang's death and would like to see political stability and economic development in North Korea. The remark came after Wang held phone conversations with U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, who discussed the matters in the context of the resumption of the long-stalled six-party talks on North Korea's nuclear program. Meanwhile, China's semi-official Global Times news outlet emphasized the importance of Kim Jong Un's upcoming visit to Beijing — an obvious shift from Beijing's previous reluctance to invite the new leader and a sign that China now feels the need for direct dialog.
Sign of Diverting from Beijing?
Jang's ouster and execution itself could have been a sign from North Korea that the country may want to distance itself from China. First, among the many charges Jang faced was the accusation that he sold the country's resources to China at a low price. This accusation is widely thought to refer to Jang's gains from North Korea's export of iron ore and minerals to China, the largest recipient of North Korea's iron ore resources. Second, Jang was accused of allowing foreign nations to sign 50-year leases on land in the Rason Economic Zone. Jang was believed to have offered China favorable terms in an agreement on land and port access in 2011. Meanwhile, the state-owned China Merchant Group reportedly withdrew from the Hwanggumpyong Economic Zone — a new economic zone along the Sino-North Korean border directly orchestrated by Jang — in late November. The withdrawal reportedly occurred as Pyongyang raised barriers to Chinese business that reportedly frustrated not only the China Merchant Group but also Chinese businessmen operating in North Korea.
China has repeatedly emphasized that Jang's execution will not affect its relationship with North Korea, but its reaction could be explained two ways. On one hand, Beijing could still be gauging the implications of Jang's execution and could be willing to accept Jang's purge as an indication of Kim Jong Un's consolidation of power. On the other, it could reflect China's growing challenges in reining in the situation, and an international perception that Beijing's influence in Pyongyang is diluted could give North Korea more room to maneuver independent of China's will.
In fact, although Jang's execution was sudden, Beijing appeared to have anticipated Jang's purge, given Jang's excessive personal ambition. According to Chinese media, Jang reportedly was "anxious" about his future when meeting with an unnamed Chinese politician in late January and said his influence in Pyongyang had been exaggerated outside the country. The speculation about Jang's future should have been reinforced when Vice Marshal Choe Ryong Hae visited China as Kim Jong Un's special envoy in May, shortly after North Korea's nuclear and missiles tests, dampening Beijing's estimation of Jang's influence. Moreover, in a private meeting between a visiting high-level Chinese delegation in late July — three months before Jang left the public scene — he reportedly expressed concern about losing support from Kim Jong Un.
But even with Pyongyang's desire to reduce its reliance on Beijing, Jang's purge does not necessarily signal that North Korea is willing to — or can afford to — give up its relationship with China, given China's paramount influence and the countries' geopolitical ties. Rather, Pyongyang may feel that China would prefer the countries' current relationship to a North Korea led by a hostile regime and rife with internal turmoil, and thus will allow Pyongyang to maximize its own security and economic interests.
For China, the Korean Peninsula is both a strategic buffer and a corridor for foreign threats — threats that have manifested repeatedly from the days of the Ming Dynasty to the Korean War. Thus, the very least Beijing can accept in light of its geopolitical interests is a neutral North Korean regime. Beijing's current acceptance of the new regime in Pyongyang has three limits: internal instability in North Korea, Pyongyang's sudden moves without Chinese involvement and North Korea's continued push for nuclearization, which increasingly threatens China's strategic environment.
China has long been concerned about instability in its eastern neighbor sparked by either a succession crisis or an economic crisis stemming from North Korea's international isolation. Thus, while it has yet to establish official connections with Kim Jong Un, China prefers a regime with its leadership consolidated in order to prevent greater instability in the country. As part of its strategy, Beijing has tightened its economic ties with the regime in anticipation of the country's further opening — especially toward China, which could bring more stability to the countries' shared border. China remains a strong factor in preventing a massive economic crisis in North Korea. In 2012, the first year after Kim Jong Un took power, bilateral trade reached $6 billion (up from $1.6 billion in 2005) — nearly 90 percent of North Korea's total trade. Several investment projects and the establishment of special economic zones along the border facilitated this increase in bilateral trade.
From China's perspective, as long as North Korea continues to push ahead with its nuclear program, full rapprochement between North Korea and the West — particularly the United States — is not possible in the near term. However, this only benefits China if the perception exists that China can or will exert influence on North Korea. In fact, although Beijing had long cultivated North Korea's nuclearization as a lever in Korean affairs, it is growing uneasy about North Korea's continuing nuclear efforts and the effect they could have on China's strategic environment and credibility in mediating North Korean affairs. Even more concerning for China is the possibility, however remote, that North Korea will one day no longer merely serve as a buffer against hostile neighbors and the West but may begin a process of normalization and perhaps unification with South Korea, even posing a nuclear threat just next door to China.
Beijing's desire to rein in North Korea conflicts with Pyongyang's imperative of self-defense and independence. Neither side can afford to back away from the countries' bilateral ties, and neither is willing to go that far; Beijing's challenges in maintaining strong influence over the provocative regime are as great a constraint as Pyongyang's limitations in reducing its dependence on Beijing. However, as North Korea continues to demonstrate its intentions to act outside China's control, Pyongyang is testing Beijing's boundaries.