North Korea gets blamed; China, South Korea get the mess

By Jonathan Thatcher and Chris Buckley – Analysis

SEOUL/BEIJING (BestGrowthStock) – The North Korean torpedo that killed 46 South Korean sailors is rupturing ties across the peninsula, but it is also damaging China’s regional standing and its self-portrayal as a helpful broker between its neighbors.

South Korea said on Thursday international investigators had shown it was a North Korean submarine that sank its navy corvette near the disputed sea border with the North in March.

Isolated, sanctioned and heavily armed, North Korea has for years used apocalyptic threats, a nuclear program and occasional firefights as a means to keep its dynastic ruler in power despite deepening economic misery.

An international storm of condemnation has broken out over the sinking, but the tight lipped-response of China, North Korea’s sole supporter, looks to some like a snub to a worried region and a lost opportunity to assert influence.

“The North Korea issue is an absolutely crucial test of whether China has what it takes to be a world leader,” said Lee Jung-hoon, a Yonsei University professor of international relations.

“Depending on how it handles it, it can demonstrate itself as a true global leader or otherwise it will simply remain a socialist giant.”

Beijing has called the ship sinking “unfortunate” and refused to be drawn into the condemnation of Pyongyang and its leader Kim Jong-il, whom it hosted earlier this month on a rare trip abroad, to the irritation of South Korea.

For China, say some analysts, the priority is to prop up Kim rather than risk the North imploding in chaos that would spill into its territory and, perhaps, lead to South Korea and its ally the United States moving right up to its border.

But that risks undermining Beijing attempts to play more of a role as a great power in the region and is already hurting ties with South Korea, one of its leading trade partners.

“This is a big dilemma for China, but it would be unrealistic to expect China to line up behind South Korea so soon after Kim Jong-il’s visit,” said Shi Yinhong, a professor of international security at Renmin University who follows Korean affairs.

“The price that China will pay will be its regional influence, especially over South Korea. It will have some impact on that influence … now regional governments may feel that Chinese foreign policy is out of balance.”

INTENSE EFFORTS

For more than a decade, China has devoted intense diplomatic efforts to cultivating its Asian neighbors — assiduously attending an endless round of summits, sending top leaders on regular bilateral trips, and presenting its idea of a “harmonious world” as a cure for all ills.

Now that harmony has taken a blow.

One early victim could be attempts by Beijing to resume North Korea denuclearization talks among regional powers which it has long hosted but which Pyongyang has boycotted for over a year.

South Korea, Japan and the United States have all made clear that they see little point in resuming talks and effectively helping the North.

South Korea itself is mindful that however angry it may feel, it cannot afford to strike back at the North. Investors, vital to Asia’s fourth largest economy, have long tolerated the animosity between the Koreas but only as long as they feel the threat of actual war is remote.

Indeed, President Lee Myung-bak refused to blame the North in the aftermath of the attack on the corvette and waited for the report by an international team of investigators, despite widespread anger in the South.

And although it feels justified now to step up the rhetoric against Pyongyang, the prosperous South has reason to be terrified of a collapse of the North.

Sudden, and forced, unification would force it to bear the cost of absorbing 23 million North Koreans who have little idea of how modern business works and whose own economy barely functions.

It is also painfully aware that its very open economy can quickly see investors flee at the sight of major risk.

The South is offering major investment across the border to reduce the pain of what it believes will be eventual unification.

But for the North’s leadership that would require what analysts say would be unacceptable acquiescence to Seoul and put at risk its own legitimacy, based largely on its perceived ability to fend off a hostile world even it means abject poverty for the masses.

Ultimately, Seoul may have miscalculated the propensity of Pyongyang to take differences to the brink.

“It shows that we failed to manage the way North Korea inherently is … it is in their nature to wage provocations,” said Cho Min of the Korea Institute for National Unification.

Investing Research

(Additional reporting by Jack Kim in Seoul; Editing by Raju Gopalakrishnan)

North Korea gets blamed; China, South Korea get the mess