China's Kaesong dilemma

The shutdown of the Kaesong Industrial Complex leaves South Korea unscathed but creates a predicament for China Photo: Associated Press

SEOUL, May 1, 2013 — South Korea has announced that it will pull the remainder of its workforce from the Kaesong Industrial Complex, where over a hundred South Korean companies employed over 50,000 North Koreans. 

A more reckless leadership in Seoul would have done this much earlier, when North Korea first suspended operations at Kaesong earlier this month, but the Park Geun-Hye government has shown remarkable patience; it responded to North Korea’s provocation in a somewhat obsequious manner – by offering to negotiate.

This offer was not a sign of weakness on the part of Seoul but rather of confidence in the strength of their position. If the North Koreans accepted the offer, it would be for them an admission of defeat. If they rejected it, which they did, South Korea would simply quit Kaesong, as it did. This allowed the Park Administration to demonstrate to its people that everything has been tried to bring about a negotiated solution, and that all the aggressiveness and irrationality was coming from the North.

North Korea’s brazen challenge may cause some monetary loss to Seoul, but other than that, it leaves South Korea completely unscathed. The shutdown of Kaesong affects, not South Korea but China, which will now have to decide whether to reimburse its ally, either by replacing the South Korean companies with their own companies or by an increase of direct aid. Kaesong provided about 90 million dollars in precious cash every year to the North Korean leadership, and if the Chinese do nothing, they will effectively be cutting off aid to their troublesome ally. Had all this transpired five years ago, China would have certainly come to the rescue. But today, relations between the two countries have deteriorated to the point where China’s response is more difficult to predict.

A possible clue to Beijing’s future conduct can be found in a recent meeting between the top generals of the U.S. and China, in which it was announced by the Chinese side – General Fang Fenghui – that North Korea may be planning a fourth nuclear test.

What is surprising about this announcement is not so much its content, which was expected, but the fact that it was delivered publicly, and in the context of a military meeting with the United States. Had the Chinese intended to step in for North Korea, they likely would have said nothing about this hypothetical nuclear test. Certainly they would not have fed the suspicion themselves to the very country which is always urging them to apply pressure to Pyongyang.

The Chinese could not have conveyed this message to the United States in so public a forum just to give us information; this they could have done privately.  Beijing’s intention, it seems, was to send a message to Pyongyang that this time was different, and that China may not come to the rescue as it had so many times before.

The chance is high that this time around China will leave North Korea to hang; for in a sense, the shutdown of Kaesong gives Beijing the chance to apply pressure on North Korea simply by doing nothing – what a mistake on the part of Pyongyang. 


Follow Benjamin Ra on twitter @ForeignPolicyX


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Benjamin Ra

Benjamin Ra is a recent graduate of Sciences Po Paris. He writes mainly on foreign policy and is currently residing in South Korea. 

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