At-loss China accepts unified Korea: WikiLeaks

By Shaun Tandon (AFP) – 4 hours ago

AFP: At-loss China accepts unified Korea: WikiLeaks

WASHINGTON — China, long viewed as North Korea's protector, increasingly doubts its own influence and would support the peninsula's reunification if the regime collapses, leaked US documents have said.

Over an expansive dinner last year, the Chinese ambassador to Kazakhstan revealed that Beijing considers North Korea's nuclear program to be "very troublesome," according to a memo obtained by whistle-blower site WikiLeaks.

Ambassador Cheng Guoping "said China hopes for peaceful reunification in the long-term, but he expects the two countries to remain separate in the short-term," said the leaked cable by US Ambassador Richard Hoagland and reprinted by Britain's The Guardian newspaper.

In another cable reproduced by The New York Times, a Chinese official whose name was removed said that Beijing believed North Korea had "gone too far" after carrying out its second nuclear test and firing a missile.

The official told a US diplomat "that Chinese officials had expressed Chinese displeasure to North Korean counterparts and had pressed (North Korea) to return to the negotiation table," it said.

"Unfortunately," the Chinese official was quoted as saying, "those protests had had no effect."

"'The only country that can make progress with the North Koreans is the United States,'" the Chinese official was quoted as saying.

WikiLeaks has outraged the US government with its massive release of sensitive data. The memos became public a week after North Korea shelled a South Korean border island, killing four people and sending tensions soaring.

The standoff comes as North Korea's reclusive leader Kim Jong-Il, who has suffered a stroke, prepares to hand over power to his little-known youngest son Kim Jong-Un, who is believed to be in his late 20s.

Dai Bingguo, China's state councilor, is quoted in a cable as telling US officials after a visit to Pyongyang that Kim Jong-Il had lost weight but "appeared to be in reasonably good health and still had a 'sharp mind.'"

Kim said he still drank alcohol, saying that only scheduling problems stopped the North Korean leader from partaking with his guest in one of his legendary drinking sessions, according to the cable.

Many US experts believe that China wants to preserve the status quo on North Korea, fearing that a collapse would trigger a flood of refugees and bring a united and US-allied Korea to its border.

But senior South Korean official Chun Yung-Woo is quoted in a cable as saying that more "sophisticated" Chinese officials have come to believe that North Korea "has little value to China as a buffer state" since its first nuclear test in 2006.

Chun also said that South Korea believed that North Korea "had already collapsed economically" and would "collapse politically" two to three years after Kim's death.

Chun, who was then vice foreign minister and is now national security adviser, said that China "had far less influence on North Korea than most people believe."

"Beijing had 'no will' to use its economic leverage to force a change in Pyongyang's policies and the (North Korean) leadership knows it," he said.

However, another cable quoted a Chinese official who "discounted strongly any suggestion that the system would collapse once Kim Jong-Il disappeared."

The unnamed official "cautioned that US experts should not assume North Korea would implode after Kim Jong-Il's death," it said.

Copyright © 2010 AFP. All rights reserved.

__________________
"Patriotism means being loyal to your country all the time and to its government when it deserves it."-- Mark Twain

"Inter arma silent Musae"--when the weapons speak, the muses fall silent.

An't nanum hearm deth, doth hwaet ye willath.

It is forbidden to kill; therefore all murderers are punished
unless they kill in large numbers and to the sound of trumpets. -Voltaire

Economic Left/Right: -3.88
Authoritarian/Libertarian: -4.36

WikiLeaks Fans Intrigue on $5 Trillion Bill: William Pesek - Bloomberg

WikiLeaks Fans Intrigue on $5 Trillion Bill: William Pesek
By William Pesek - Dec 1, 2010

Dec. 1 (Bloomberg) -- Bloomberg's Stephen Engle reports from Dandong, China, on a bridge linking the country with North Korea and the economic disparity between the two nations. China is blocking attempts by the UN Security Council to condemn North Korea over its attack on the South and its nuclear activities, Agence France-Presse reported today, citing unnamed diplomats. Frustration reigns as North Korea acts like a 2-year-old having an epic tantrum.

South Koreans are perturbed by their government’s impotence in the face of deadly attacks. Americans are bitter that one option to curb Kim Jong Il’s nuclear program is worse than the next. Japanese believe they are a target. Chinese are losing patience with their erratic and bellicose ally.

We haven’t seen anything yet. Irritation will rise once world leaders discuss money. Recent tensions brought the issue of Korean reunification to the fore as rarely before. The real questions are: How much will it cost and who will pay? They are big ones and they aren’t getting enough attention.

The price tag will be $2 trillion to $5 trillion over 30 years, says Peter Beck, a senior fellow with the Atlantic Council in Washington. A South Korean presidential committee puts it between $322 billion to $2.1 trillion, but come on. The costs of German reunification -- about $2 trillion and counting -- suggest even $5 trillion is optimistic.

It’s not a matter of whether the world is willing to bear the cost. It must. North Korea is too nuclear to fail and a stable peninsula is absolutely in the best interest of the global economy. It’s among the biggest risks hanging over markets. In a sense, peace would be, well, priceless.

In practical terms, though, meshing the two Koreas together could cost more than Japan’s current annual economic output. It could cost more than double China’s currency reserves, six times U.S. President Barack Obama’s $787 billion stimulus package and 45 times Ireland’s bailout.

We’re talking serious money here -- far beyond anything the International Monetary Fund and World Bank could cough up. The thornier issue is who pays. Picking up the check seemed easier before the collapse of Lehman Brothers Holdings Inc. in 2008. Since then, governments borrowed massively, U.S. unemployment skyrocketed, Europe’s debt crisis mushroomed and Japan’s deflation worsened.

In a more perfect world, we would look to Asia’s most developed economy. Yet Japan faces daunting limitations -- namely, a debt that is 200 percent of gross domestic product. The U.S. has similar constraints and the trajectory of its policies augurs ill for increased spending abroad.

China? It faces huge challenges in the years ahead and committing hundreds of billions of dollars to Korea would be unpopular in Beijing. Like Japan, China’s aging population will strain government coffers. China isn’t a big fan of a unified Korea anyway, as it would remove a key buffer between it and the U.S.


South Korea’s $833 billion economy, meanwhile, can only afford so much.

“Reunification is something hardly anyone in South Korea wants right now,” says Bradley Martin, author of “Under the Loving Care of the Fatherly Leader.” “That’s not only because of the enormous expense, but also because Southerners’ experience receiving some 20,000 North Korean defectors shows that putting the two divergent streams of Korean culture back together is going to be a huge challenge as well.”

The idea that reunification will go smoothly is fanciful. Will the South’s nouveau riche accept lower living standards to absorb the North’s huddled masses? President Lee Myung Bak has proposed a unification tax. South Korean GDP also will take a sizeable, and still unknowable, hit.

Social cohesion is a big imponderable. Once Internet connections sweep the North, won’t folks there bristle at the South’s wealth? And then there’s what to do with the North’s 1 million-plus soldiers. Given how disastrous dissolving Iraq’s military turned out to be, this will have to be handled wisely. This, too, won’t be cheap.

Many look to Europe for clues on what lies ahead. It’s a dubious comparison. East Germans were far more connected to the global economy than North Koreans. Poverty is much worse in North Korea. And it won’t enjoy a common market of the kind East Germans were able to tap into after 1990.

The challenges run far beyond those faced by Germany. Even high-end estimates for reunification only get the North’s per capita income to 80 percent of the South’s. Really, we could be talking about $6 trillion or $8 trillion to finish the job.

Perhaps Kim’s regime is banking on a sticker-shock dynamic. It may be betting that once the true costs are tallied, world leaders will balk and try to put it off.

That would suit China just fine, even if there are indications it’s getting fed up. A leaked Feb. 22 diplomatic cable provided to the Guardian newspaper by WikiLeaks.org said young Chinese Communist party leaders don’t see North Korea as a reliable ally and some officials think Korea should be unified under the South.

Getting there will require big money. The longer the process is delayed, the more antiquated North Korea’s economy becomes relative to the South’s and the more expensive the process will be. A unified Korea is a wise investment, yet we need to think long and hard about how to finance it. The time to start planning is now.

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)

__________________
Unless otherwise specified, I am posting as a regular poster. When I will act as a mod, I'll make sure you're in no doubt.