North Korea's Black Market: Big Enough to Force Reforms?

There is a property boom in Pyongyang, the capital of the destitute Democratic People’s Republic of Korea. The boom, in turn, has created an impetus for economic reform.

Apartment prices have skyrocketed 30-fold since the turn of century. The most expensive unit now goes for about a quarter of a million dollars, a large sum in a country where official wages are not even $2 a month.

That, at first glance, is amazing, especially because all property—including every single housing unit in the country—is owned by the state.

As Richard Lloyd Parry of the Australian explains, owners—if they can be called that—do not actually have title. They occupy their apartment after “swapping” residences with “sellers,” who receive compensation for taking less-desirable units in exchange. All transactions are approved by state bureaucrats, who attend to necessary paperwork for under-the-table payments.

China Creates Adversaries With South China Sea Reclamations

Beijing’s exchange of allegations with Manila over the South China Sea became increasingly nasty this week when the Chinese Foreign Ministry, on May 5th, accused the Philippines of “malicious hyping and provocation.” China accused its island neighbor of illegally seizing its possessions in that body of water. China claims almost all the islands, shoals, rocks, and reefs there as sovereign territory.

Beijing’s undiplomatic language accompanies its contention that the Philippines and other nations had, by building facilities, violated the nonbinding Declaration on the Conduct of Parties in the South China Sea, signed November 2002 by ASEAN states and China.

China Goes After ‘Economic Fugitives' in America

On April 22nd, Xinhua News Agency reported that China’s Central Commission for Discipline Inspection released a wanted list of 100 individuals—77 men and 23 women—accused of corruption. Beijing is trying to get foreign governments to cooperate with its efforts to apprehend the suspects.

Of the 100 listed, 40 are believed to be in the US, and Beijing also maintains that in total there are more than 150 “economic fugitives” now in America. 

Chinese law enforcement officials have had some success in obtaining American assistance. Washington’s collaboration, however, raises fundamental issues for any free society.

North Korea Looks for a New Friend, India

On April 13th, Ri Su Yong met his Indian counterpart, External Affairs Minister Sushma Swaraj, in New Delhi. The trip is thought to be the first time a North Korean foreign minister has visited India.

Ri’s mission highlights North Korea’s attempt to isolate China, its only formal military ally, and establish new relationships in Asia and elsewhere.

Ri last week discussed his country’s nuclear weapon program and asked for additional humanitarian aid. Yet the topics of conversation were not nearly as important as the fact that the meeting took place at all, not to mention in the Indian capital.

India Goes Shopping for Submarines

India is in the market for subs, but it’s having trouble buying the best ones. Indian Defense Minister Manohar Parrikar, during a two-day meeting in Tokyo at the end of last month, reportedly asked his counterpart there, Gen Nakatani, to offer to sell six of Japan’s Soryu-class diesel models. The Japanese, according to a source in the Indian Defense Ministry speaking to Defense News, were “non-committal.” The apparent hesitance suggests that New Delhi might want to rethink the application of its “Buy and Make in India” program.

For China and India, Diplomacy Meets Competition

Chinese troops provoked a confrontation with India’s soldiers twice last month in Ladakh, according to reports that surfaced over the weekend. The incursions—elements of China’s People’s Liberation Army advanced south over the Line of Actual Control into Indian-controlled territory—took place in the same area as an incident in April 2013 that roiled relations between the two nations. The line, a little more than 4,000 kilometers long, serves as a de facto border between India and China.

The provocations last month—on March 20th and 28th—were reported to be on the agenda when Indian Defense Secretary R. K. Mathur and his team sat down with Chinese officials in Beijing Wednesday and Thursday for preliminary talks. The discussions took place before their seventh annual dialogue, to be held on Friday.

The Xi Jinping Faction in China

On Friday, the Asahi Shimbun, a Tokyo newspaper, suggested that Chinese ruler Xi Jinping was building a “Zhejiang faction” by promoting longtime acquaintances, some from the Nanjing Military Region of the People’s Liberation Army. Xi served in party posts located in that district.

The report is striking because Xi is at the same time attacking factionalism inside the Communist Party. “Banding together in gangs, forming cliques for private ends, or forming factions is not permitted,”  the official Xinhua News Agency stated after a December 29th meeting of the Politburo, the high party organ.

Xi’s attack on factionalism, while attempting to form a faction of his own, is roiling the Communist Party. 

China’s Never-Ending ‘War on Pollution’

On Monday, the Beijing municipal government announced it would close the last of its major coal-fired generating stations. By next year, China Huaneng Group’s 845-megawatt plant will cease operations. The capital city shuttered another one in 2014 and two more last week. The closed facilities will be replaced by four new ones powered by clean-burning natural gas. Beijing’s notoriously dirty skies—its air is more than twice as bad as the Chinese national standard—should be cleaner as a result of the closures.

There is now a sense that Chinese leaders are starting to take the environment seriously. Premier Li Keqiang, for instance, at the National People’s Congress this month said he was reaffirming his March 2014 “declaration of war” against pollution.

China's Infrastructure Bank Proposal Gains Traction

On Tuesday, France, Germany, and Italy announced they will participate in the Beijing-led Asian Infrastructure Investment Bank. The trio follows Britain’s decision to do so and precedes expected announcements by Australia and South Korea.

Is China’s One-Party State on the Brink?

“We cannot predict when Chinese communism will collapse,” writes David Shambaugh in an essay in Saturday’s Wall Street Journal, “but it is hard not to conclude that we are witnessing its final phase.”

The George Washington University professor is known in the global China-watching community as having close ties to the Communist Party of China. In his essay, titled “The Coming Chinese Crackup,” he mentions attending a conference at the Central Party School in Beijing last December and having other contacts with cadres and officials. He was recently named one of America’s top 20 China watchers by China Foreign Affairs University, which is affiliated with China’s Ministry of Foreign Affairs.

Will Russia Buckle, Sell China Control of Its Oil Fields?

On Friday, Russian Deputy Prime Minister Arkady Dvorkovich signaled that the Kremlin would be willing to give Chinese companies majority stakes in Russian oil and gas fields. “There used to be a psychological barrier,” he said, speaking from Krasnoyarsk, a city in energy-rich Siberia. “Now it doesn’t exist anymore. We are interested in maximum investments in new industries. China is an obvious investor for us.”

At present, Russia caps foreign ownership at 50 percent for oil fields where reserves exceed 70 million tons and gas fields containing more than 50 billion cubic meters in reserves. Yet that could change if the Chinese want bigger stakes. As Dvorkovich said, “If there is a request, we will consider it.”

Re-monopolizing China's Industry

The recent completion of two government-directed mergers in China’s energy and manufacturing sectors and other mergers now in the making suggest Beijing is reversing two decades of reform intended to make Chinese industry more efficient and competitive in local and global markets. The ongoing effort is certain to fail in the long term.

Hong Kong Protests Traders from China

On Sunday, more than a hundred protesters—most of them young—mobbed New Town Plaza, a mall in the Sha Tin District of Hong Kong. There, they clashed with shoppers and hounded tourists from mainland China.

Police tussled with the demonstrators, wielded batons, used pepper spray, and made arrests during the second consecutive Sunday of demonstrations against “parallel traders,” individuals buying goods in Hong Kong and lugging them across the border to China. On February 8th, there were similar protests in Tuen Mun, an area also close to the China border.

For years, residents of Guangdong Province—from quick-buck artists to concerned parents—have entered Hong Kong, a special administrative region of China, and bought foodstuffs and household items to bring back to the mainland.

Will Japan Flex Its Naval Power in South China Sea?

In a startling interview with Reuters, Admiral Robert Thomas, commander of the US Seventh Fleet, said that America would welcome Japan patrolling the South China Sea, south of the Japanese islands and far beyond the country’s current area of operations. Tokyo has no current plans to send planes and ships into that body of water, but Beijing, which aggressively patrols there, is already upset.

“I think that JSDF operations in the South China Sea make sense in the future,” Thomas said, using the acronym for the Japan Self-Defense Forces. The admiral’s comment signaled Japan would soon take on responsibilities beyond its vicinity because Washington and Tokyo are now in discussions to revise bilateral security guidelines.

An Ominous Chinese Military Parade

Everyone loves a parade.

And, evidently, no one more so than General Secretary Xi Jinping. The Chinese ruler has scheduled a grand military procession through the heart of Beijing in early September. The news of the parade, carried in state and Communist Party media but still not officially confirmed, was unexpected and suggests China will continue to move in dangerous directions.

There have been 14 military parades in the history of the People’s Republic of China.

Eleven occurred between 1949 and 1959, during the era of founder and tyrant Mao Zedong. His first three successors—Deng Xiaoping, Jiang Zemin, and Hu Jintao—each presided over one military parade, all of them on October 1st, National Day.

The last such parade was in 2009, marking the 60th anniversary of the founding of New China, as the party calls the country. The one before that was in 1999. Most everyone, therefore, assumed the next military parade would be held on October 1, 2019.


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