China's dangerous game

North Korea is raising the stakes in the confrontation with South Korea and the United States. North Korean negotiators are asking for far more money from the 100 or so South Korean companies that employ 40,000 North Korean workers in the Kaesong industrial complex just inside North Korea, about 65km north of Seoul. They're holding a South Korean worker for ransom, more or less, accusing him of having bad-mouthed the North in a conversation with a North Korean waitress at a snack bar.

The standoff at Kaesong is emblematic of North Korean strategy on a much larger scale. They've got two US journalists, grabbed by North Korean soldiers along the Tumen River border with China on March 17, and have charged them with 'hostile acts' including espionage. They, too, are being held essentially for ransom - US agreement to talks that the North sees as necessary to get it to agree not to resume its nuclear weapons programme, as Pyongyang has promised to do, as well as pump in billions in aid.

The North is getting increasingly tough following its launch on April 5 of a long-range missile and the subsequent condemnation by the UN Security Council. Despite China's interest in hosting six-party talks, in which the North has said it will 'never' again participate, Beijing has contributed to a sense of confidence among North Korean strategists that they can actually get away with frightening the world into agreeing to ever more aid. The refusal of China, as the North's ally since the Korean war, to go along with any effective response, in the UN or elsewhere, underlines Beijing's growing support of the North over the past few years.

Far from discouraging North Korea, China has vastly increased economic and other aid since 2004. Just as Chinese 'volunteers' saved North Korea from outright defeat by UN and South Korean forces in 'the coldest winter' of 1950-51, so too has China come to the rescue while the starving country plunges billions into nuclear weapons, missiles and space exploration.

As tensions increase on the Korean peninsula, Chinese policymakers need, or at least believe they need, to stand ever closer to North Korea in a big-brother act that is sure to deepen divisions and confrontation. China now provides the North with US$1.5 billion in aid a year, nearly four times the US$400 million it gave in 2004. North Korea has a favourable trade balance with China, and multi-millions more in goods and cash flow beneath the books in traffic across the long Yalu River border to the west and the much shorter (but shallower and easily traversed on foot) Tumen River in the northeast.

'The North Koreans know they have the Chinese in their pocket,' as Scott Snyder, a North Korea expert with the Asia Foundation, remarked at the American Enterprise Institute in Washington.

But why? The answer lies in China's desire to assert its historic hegemony over the entire Korean peninsula - and its influence in northeast Asia. It's also possible the Chinese fear that diminished aid to North Korea would hasten the collapse of the regime, bring about a flood of refugees across the border, and destabilise the peninsula to the point of chaos, with a bloody and unpredictable outcome. Nick Eberstadt, a long-time analyst of Korean negotiations at the American Enterprise Institute, cites the danger of an 'explosion of Chinese subsidies'.

The most frightening aspect of North Korean advances in nuclear and missile technology is the threat it poses not just to its neighbours - and enemies - but to the world at large. Bruce Bechtol, a former marine in Korea and now a professor at the Marine Corps University in Quantico, Virginia, warned of rapid strides made by North Korea all the while the US was pressing six-party talks to get the North to abandon the whole programme. 'The North Koreans are advancing their capabilities and are proliferating that to the Iranians,' he said. 'No matter how much we pay to the North Koreans, they will still build the missiles and proliferate them.'

If such arguments are daunting, however, they carry the threat of a reaction that China may see as anti-Chinese. That would be the Proliferation Security Initiative (PSI), a US-spurred international effort to block shipments of nuclear materials and technology, as well as the missiles to deliver them, from North Korea to its client states. Japan is an enthusiastic PSI participant, and South Korea has said it is willing to join what North Korea says would be 'a declaration of war'.

China may perceive all that as the rise of an alliance that could turn against it. Thus, Beijing unreservedly buoys a North Korean regime as clouds darken over a region of uneasy peace.

Donald Kirk is the author of two books and numerous articles on Korea for newspapers, magazines and journals