commentary

(Los Angeles Times)

January 26, 2001

North Korea Considers 'Going Chinese'

by Michael Parks and Gregory F. Treverton

Does the second visit in seven months by North Korea's leader, Kim Jong Il, to China suggest that the North is "going Chinese"? Is Kim contemplating something like the Chinese path to reform? South Korea's President Kim Dae Jung thinks so: "This shows that North Korea is deeply interested in the Chinese-style reform and open-door policy and that it is trying to become a second China." The Shanghai that Kim Jong Il saw last week included a GM plant, a Japanese semiconductor factory and the stock market--none of which existed when he visited in 1983 and pronounced China guilty of "revisionism."

In the 1970s, China, too, was unable to feed itself and exported cheap consumer goods to buy grain. Its people lived by ration books--so much cotton cloth, so much cooking oil, so much meat--and by special allotments when a couple was married or a baby was born. It had come through periods of great starvation, earthquakes and floods and the political chaos of the Cultural Revolution and the Great Leap Forward.

At a crucial meeting of the Communist Party Central Committee in December 1978, "paramount leader" Deng Xiaoping introduced the first elements of a market economy, followed over the next several years by these developments:

  • Letting farmers sell rice they grew themselves. This quickly led to the decollectivizing of agriculture and the fueling of the rural economy. As farmers earned money by feeding city folks, they bought consumer goods, and light industry began to boom. Heavy industry followed. The terms of trade between city and countryside began to draw into balance.
  • Opening China to trade, foreign technology and, very soon after, foreign investment. China, too, had sought self-reliance--not as extremely as North Korea--but it was wary of the West, of Japan and of the Soviet Union. The goal was modernization, paid for with what were then just promises of future profits for those companies and countries that entered China first. One of Deng's first moves was to establish special economic zones--Shenzhen on the Hong Kong border--where he pushed economic experiments, including a stock exchange and foreign management.
  • Seeking better political relations with the West. China established diplomatic relations with the U.S. just after the Central Committee plenum ended. China began to deal methodically with old disputes with India, the Soviet Union, Japan and others, though it did "punish" Vietnam for its move into Cambodia. Overall, this was a different assertion of national pride.
  • Relaxing the Maoist ideology. This would permit new political, social and cultural freedoms--a reward for the intelligentsia and an encouragement to people to take risks--required by the new economic approaches.

These changes were possible only with the consolidation of power by Deng in 1978, after the death of Mao Tse-tung in 1976, much as Korea's Kim Jong Il consolidated power after his father's death. They also depended on Deng's persuading party and military leaders that reform was still socialism but with Chinese characteristics. The party was still paramount, and the economic reform plan known as the "four modernizations" included the military.

North Korea is not China; it has fewer resources, a much smaller internal market and has never been self-sufficient in food. Its economic crisis is probably deeper than China's was in 1978, and its political sophistication and technical know-how is shallower. However, its situation is not much worse than that of the neighboring Chinese provinces of Manchuria in 1978. Its small size confers some advantages, and its political leadership appears more unified than China's was. And it has a willing partner in South Korea.

The Chinese model seems adaptable for it, all the more so if it were accompanied by economic assistance from South Korea, Japan, the United States and perhaps China. Going Chinese would require several steps.

First, get party and military leaders on board, in part by showing them what China has done and still remained socialist. Kim didn't need to go to Shanghai to learn about China; it is no surprise that he took his senior military leaders with him.

Find the best economic drivers and gradually free them from government constraints. Work on agriculture and light industry. Slowly, carefully abandon central planning by letting market forces grow within the country and then be influenced by the global economy.

Allow North Korea to be exploited--at the right price--to get trade going, pay for modern equipment and technology and establish a new industry base. What North Korea has is reasonably skilled cheap labor. Its immediate future is not in high tech, but rather in shoes, textiles and other simple processing that is now leaving South Korea for cheaper manufacturing locales.

Create openings to those countries that can help--first of all, South Korea and the United States. The others would then be easy.

Liberalize the political system by pushing decision-making downward, letting ideas bubble upward, and sending people abroad in significant numbers, which is already beginning.

If North Korea went the Chinese way, South Korea would be spared the immense cost of an abrupt, German-style reunification. Reunification would be postponed, and its cost reduced as North Korea grew. This might be styled as "one nation, two systems," playing off the Chinese idea of eventual reunification of China, Hong Kong, Macao and Taiwan. South Korea would also find it easier to gather help from other governments if the North were pulled toward the mainstream of political and economic life.

There have been accumulating signs that North Korea's leaders have come to understand that they must change course. Going Chinese, adapted to North Korea's circumstances, is not a bad road map.


Michael Parks and Gregory F. Treverton are fellows at the Pacific Council on International Policy. Parks, who was Beijing bureau chief for The Times from 1980-84, is also a visiting professor at the Annenberg School of Communication at USC. Treverton is a senior consultant at RAND.

This commentary originally appeared in Los Angeles Times on January 26, 2001. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.