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Analysis

Xi can give Trump history lesson

Economics will topple Kim Jong-un

by Brian Reading in London

Fri 21 Apr 2017

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A war in the Korean peninsula would lead to mutual assured destruction. It is in everyone’s interest to avoid escalating the conflict between Seoul and Pyongyang. For South Korea, the idea of taking over the North is absurd. Reunification is an impossible dream. A flood of North Korean refugees is the last thing neighbouring China wants. One must hope President Donald Trump shares in this thinking.

The priority for Kim Jong-Un, the hereditary leader of North Korea, is survival. In time, he may develop nuclear missiles capable of striking the US mainland. He would never use them unless provoked – the US would respond in kind, annihilating North Korea. At present, Kim can exterminate domestic opposition, while a nuclear capability is his defence against external threats. The US has two options: to eliminate North Korea’s nuclear capability in a single blow, or to persuade China to rein in Kim’s ambitions.

The US used its massive ordnance air blast, popularly known as the ‘mother of all bombs’ (but weighing 200kg less than the Grand Slam ‘earthquake’ bombs dropped by the British Royal Air Force during the second world war) in Afghanistan on 13 April to imply it could deliver a knock-out blow. If the US were to engage in military action against the North, Kim would retaliate with conventional artillery and chemical weapons against Seoul. The US aim should be to persuade China to de-escalate the standoff.

Lessons from the cold war must be remembered. Joseph Stalin supported the 1950 North Korean invasion of South Korea. He gave little direct help, but sold armaments to North Korea and China, as the Soviet Union wished to avoid open combat with the US. The North Koreans were roundly defeated by US-led United Nations forces. China felt threatened by the possibility of an invasion aimed at toppling the communist regime, which had emerged as victor in the Chinese civil war. By sending a battle fleet to the region, the US made clear it would frustrate an attack on Taiwan, where the Chinese Nationalist Party had retreated to. Turning his attention away from Taiwan, Chairman Mao Zedong intervened in Korea. Though their armies were substantial, China and North Korea had no industrial power or the appropriate logistics to support their forces. General Douglas MacArthur advocated US nuclear attacks and war with China – President Harry Truman relieved the general of his duties. The war ended in stalemate.

North Korea’s communist regime will fall for internal economic reasons. It is a matter of relative GDP and population size. The USSR collapsed in 1991 because it could not afford to both arm its soldiers and feed its people. It spent 25% of GDP on its military-industrial complex, though the US won the arms race with lower expenditure. Economics, not military prowess, was Moscow’s undoing.

The population of North Korea is 25m. The labour force is half that, and 10% of the people are in the armed forces. The military-industrial budget is at least 25% of GDP valued at about $25bn. Annual per capita income is barely $1,000. North Korea is entirely dependent on China, just as China relied on the Soviet Union in 1950. If left alone, economic hardship and Chinese pressure will result in regime change in North Korea.

The US needs the help of the world’s other superpower. Washington cannot solve the North Korean problem alone. Hopefully Chinese President Xi Jinping can give Trump a history lesson, so he understands better what is at stake.

Brian Reading was an Economic Adviser to Prime Minister Edward Heath and is a Member of the OMFIF Advisory Board.

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