UPDATE: Yonhap has a report in English.
ORIGINAL POST: Yankee go home? Apparently not.
Not even after an eventual reunification of the Korean Peninsula.
According to a report on negotiations between Korea and the United States on the future of the bilateral alliance, U.S. troops will remain in Korea even after unification, which the document posited would be lead by South Korea. The report was obtained by the Hanguk Ilbo on Feb. 12. It said Korea and the United States hypothesized that ultimately, a unified Korea would be lead by a democratic South Korea that is legalistic and respects human rights.
The report was the result of two years of working-level talks between Korean and U.S. officials that began after both parties recognized in 1999 the need to discuss ways to adjust the Korea-U.S. alliance. The document was reported to 2002 Security Consultative Meeting (SCM). Experts believe the report, which deals with the broad security environment and all pending alliance issues, provided the framework for later talks such as the Future of the Alliance and Security Policy Initiative (SPI) negotiations.
The document said the U.S. side clearly expressed its support for South Korean-led peaceful unification, even at the stage of peaceful North-South co-existence. According to the Hanguk Ilbo, there is public consensus in support of South Korean-led unification of the Korean Peninsula, but Seoul officials have yet to make such a stance official out of concern of provoking Pyongyang. Accordingly, the report is considered exceptional in that Korea and the United States expressed through official channels that “South Korea must play the leading role in a unified Korea and the unification process.”
One civic group official said the negotiation results, which he deemed “aggressive claims” that went against the the June 15, 2000 North-South Joint Declaration (in which the South said it did not pursue German-style unification through absorption), presupposed the collapse of the North Korean regime. Another security expert refuted that it meant “unification through absorption,” saying, “We can’t allow North Korea to lead during the process of peaceful unification through North-South talks, no can we?”
Moreover, the report said Korea and the United States began talks on the future of the Korea-U.S. alliance based on the common understanding that U.S. troops should remain based on the Korean Peninsula even after unification. It said a unified Korea and the United States would maintain their security alliance, including the stationing of U.S. troops on the peninsula, hence ruling out a complete withdrawal of U.S. troops from Korea.
In particular, both countries outlined three stages of development in intra-Korean ties: reconciliation and cooperation, peaceful coexistence and unification. The report enumerated expected situations and concerns associated with each stage. The dividing line between “reconciliation and cooperation” and “peaceful coexistence” was the normalization of ties between Washington and Pyongyang, while unification would begin when the Armistice Agreement was replaced with a peace treaty.
At the stage of “reconciliation and cooperation,” Korea and the United States set as their common goal the blocking of WMD proliferation, and included as matters of concern supranational threats like drug smuggling and counterfeiting. At the stage of “peaceful coexistence,” the two sides needed to be on guard against North Korean moves pertaining to WMD proliferation, and viewed as potential matters of concern limited military provocations and the possibility of terrorist attacks.
The sixth round of Security Policy Initiative (SPI) are underway in Guam. Among the topics being discussed is the transfer of wartime control of Korean troops to Seoul.
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48 Comments
A Yonhap report said “progressive civic activists derided the report,” presumably because they’d like S. Korea to “progress” into a Stalinst military dictatorship. Some of these civic group types are really bizarre–do they actually believe a country that doesn’t participate in the world economy (legally anyway) in any significant way and lives on handouts (including from its erstwhile enemies) will simply chug along merrily for decades to come? And that S.K. and the U.S. shouldn’t anticipate its collapse? I guess it goes against their fervent desire to live under the bootheel, umm, benevolence of the Dear Leader.
The talks in connection with which this Draft was prepared predated the election of The Great Pretender and his government of No-Nothings, right?
They were saying this back in 2000 when all the focus was on the NK-SK Summit and hopes of unification were running high.
I always want to know what these people are smoking.
Generation after generation in South Korea, below those currently 65 and older, have barely been able to put up with the American bastards while under great threat to their nation. Who in their right mind believes the society will be able to control itself when that threat is gone? Let me put it this way, what would the fury over the tank accident have been like if the South did not need US troops to deter a very real chance of a 2nd invasion?
And anti-Americanism hasn’t been “rising” in the society like is commonly said. The difference has been that it has been exercised more than in the past, and what triggered the increased willingness to put it on display was the 2000 summit. But, again, I am supposed to believe that after unification, a big, huge, f-ing green light will not be lit perpetually for venting pent up anger at USFK and the US in Korea anytime the mood strikes the society? What is going to hold it back? Fear of China? I doubt that seriously.
We can flip the coin around too.
What are the chances in the next 20 to 30 years that the United States will find itself seriously moving to engage in another war? That another Iraq or Afghanistan or Kuwait or Kosovo or Bosina and so on will pop up in an area we really haven’t been planning to be engage in.
And what are the chances troops in a unified Korea will not look too appetizing to the Pentagon who will be looking for troops to send to one or more of these conflicts? We just started taking out 1/4th of the USFK forces in this time of “nuclear crisis.” Why should I believe taking more and more of the troops out of South Korea is going to be less appealing after unification?
The way I see it, it doesn’t matter which side lands up when you flip the coin, USFK will not last long past unification if it lasts that long.
Who in their right mind believes the society will be able to control itself when that threat is gone?
North Korea is not the only threat.
Let me put it this way, what would the fury over the tank accident have been like if the South did not need US troops to deter a very real chance of a 2nd invasion?
If there is a unified Korea, then uch less, probably about the level of what happens in Yokosuka.
Why? Because without a communist regime in North Korea orchestrating the activities of a fifth column that seeks to dupe the “progressives” in the chinbo/jinbo groups and those non-”progressives” wtih whom they occasionally find resonance, there won’t be anyone actively promoting the animosity. There would be Yokosuka-level or even Okinawa-level anger, but not like what happened in 2002.
Has anyone thought of routing the staff summary sheet for this “report” through the North Korean field grades and generals?
the americans want to camp at the doorstep of China just across the Yalu.
americans are scared of China.
The China argument seems to me about as foolish as the idea Koreans will be able to limit anti-US culture after unifiction when just the China threat is present.
Will having troops on the toe of East Asian mean something?
What are the chances the American military will want to get in a land war with China?
What are the chances if conflict comes with China they will try their best to avoid a general land war?
Why will having ground troops in a unified Korean peninsula pressed up against China be an asset?
If troops in South Korea facing North Korea have been locked in and inflexible but highly dangerous due to the ability of the North to strike at them, why would troops facing China but limited to a peninsula be such a hot idea for the US? Why have troops you hope will not get into a ground war in China pressed close to the Chinese military? Why give China great targets if they want to push tension up on Taiwan? Would troops in Korea not limit the ability to dream up options against China being so close?
I’m a bit perplexed here. What is a “confederation” and what is a “federation”?
Washington has a simple solution to most governments it doesnt like: isolate them, slap sanctions on them, and wait for their downfall. Indeed, this document is predicated on the assumption of NK collapse.
It is a conflicted report which reflects the conflicted nature of SK’s precarious tightrope walking policy, formally known as ‘NE Asia Balancer’. But given recent developments, it seems to also confirm that the US’s desire for NK total collapse and indefinite presence of US military on the peninsula. This runs counter to SK’s conditional engagement.
What a shame if North Korea should completely collapse. Can’t we do something to stop that?!
South Korean-led unification is the only conceivable and conscionable outcome. North Korea has little beyond spoiled land and sullen labor to contribute to an expanded ROK — unless Seoul wants vast stocks of banned WMDs and forests of kitschy statues. The language of the 6.15 statement was a major concession by Seoul. I assume South Korea has one plan for North Korean face-saving and another for the reality of cleaning up the mess that is the DPRK. I don’t see a USFK presence as politically sustainable beyond unification if the combined population of 70 million inherits the prickly nativism of the 386ers in the South and the extreme blood and soil nationalism that the North inculcates. It will be too easy and tempting for a future ROK president to follow Roh’s poor example and use Yankee-baiting to unify a population that will be riven by huge economic and social gaps between South and North, and perhaps feeling squeezed economically by China. The US would be better off spending its energies getting its China policies exactly right.
Bluejives asked,
“I?? a bit perplexed here. What is a ‘confederation’ and what is a ‘federation’?”
Well, I’m not a constitutional expert, but in the context of this thread and given what I understand of my own country’s (Canada’s) structure (a confedaration), “confederation” could be taken to mean an association of semi-autonomous entities under a relatively loose federal structure. I.e., in Canada, individual provinces have more autonomy and control over internal affairs—a wider jurisdiction—than individual states in the U.S. (which is sometimes described as a “federation”).
In the Korean context—and I could just be talking out of my ass here—some South Koreans would be looking for an intermediate stage in reunification, where the North would function as a separate unit—with a free market economy and human rights, but buffered from the South, probably with lower wages and possibly even mobility restrictions between North and South (regarding Northerners’ ability to live or work in the South). I’m guessing this is what’s referred to by SK’s idea of “confederation,” as a response to economic concerns.
On the other hand, the North never seems to have given up its long-term aim of also having a reunified Korea, but with fully centralized control from Pyongyang—or perhaps from Seoul, but with the KWP fully in charge. I don’t think under the Northern plan, there’d be any autonomy for the South!
Any nation that shares a common border with NK do not want a sudden collapse. The idea is to avoid a situation where an imploded NK drags down its neighbors (like a drowning victim dragging down its rescuer) but to maintain a managed situation where NK is slowly ramped up to par. There is a real risk of anarchy, crime which may produce unforseen nasty consequences. Reunification is a long-term goal.
The tumor must be removed carefully, not ripped out, to avoid harming adjacent organs.
usinkorea
you’d be better off directing those questions to the state department and the pentagon nyahaha
As i see it, america is really trying to encircle China physically. Staking its claim to the rest of Asia, Northeast, Southeast, South. It’s kinda like placing one arm around a girl’s neck with the hand of the other spread on the butt and looking at China in the eye “See? the rest of Asia is mine”
The Korean peninsula in the northeast, Taiwan in the middle, and the Jemaah Islamiah (with the AbuSayyaf and the MILF) in the Southeast, hah! It is going to be quite an interesting century for the americans in Asia.
The americans are back and conducting little war games in Mindanao.
Look here:
GI in hot water for shooting stray animals at Sulu camp. Jeez, they hardly changed. In the past american servicemen used to shoot at Aetas in the periphery of Clark.
the americans are never going to leave the Korean peninsula. and Okinawa
Are there any serious analysts of international affairs in the Philippines?
I don?? see a USFK presence as politically sustainable beyond unification if the combined population of 70 million inherits the prickly nativism of the 386ers in the South and the extreme blood and soil nationalism that the North inculcates. It will be too easy and tempting for a future ROK president to follow Roh?? poor example and use Yankee-baiting to unify a population that will be riven by huge economic and social gaps between South and North, and perhaps feeling squeezed economically by China.
As soon as Korea unifies, Beijing will??s if on cue because they really are that ham-handed with their threats??ake sufficient noise that will remind most in the ROK just what China is after. That will make plenty of people very happy that the Americans are sticking around.
The US would be better off spending its energies getting its China policies exactly right.
And what would that be? No economic cooperation without guarantees of human rights? That shipped sailed during the Clinton Administration. Kim Daejung’s Sunshine Policy was just a copying of the DLC-GOP’s own sunshine policy with Beijing.
I think the ultimate problem for South Korea’s Sunshine policy as currently followed is that it is short sighted and will end up costing more in the end for both the North and South Korean people.
If SK could bring NK “on par” or in the same ballpark as the South, it might make sense, but the chances of that happening are very slim. The Soviet Union and China backing it with other communist satelite states as markets was able to create the facade of development for a time, but at a very high price. It isn’t likely China or South Korea are going to funnel the type of material aid into the North it once enjoyed during the Cold War, but even if it did, there is more evidence from history telling us North Korea will not take advantage of it to move “on par” with the South.
Without massive aid and fundamental reform, the North is just going to suck South Korea dry. Well…South Korea will not give to the North until it collapses like the Soviet Union did. It will try to find a happy middle ground where it can keep the North alive without throwing too much good money after bad.
Which means, SK’s effort to “build up” the North will result in a perpetuation of a weak, dictatorial North Korea in constant need of life support from the South. It will end up costing the South far more than it might if the North were allowed to collapse.
And in the end, there is no guarrantee the South will be able to find enough material support to keep the North alive - or that the North might not try something desperate and fail sending it to collapse despite the South’s best efforts.
If unification is going to come, and the South is going to overcome the brunt of hardship joining with the North will bring, it will need the US and Europe (and Japan).
It would make more sense to me to move closer to the US, not push it away, if Korea wants the kind of financing of the North after unification it will need.
I would not bank my hopes on the idea the South can move closer to the North, alienate the US, but if collapse comes, count on the US giving full support to stabilizing the situation.
That is why it rings true to call South Korea’s policy with the North anti-unification. They don’t have a prayer of building the North up even over a period of decades without fundamental changes the North will not make and the South does not want it pressured to make. So, there effort, in the end, is to simply avoid collapse and unification with a weak North. Which means no unification at all.
Anybody who’s given any serious thought to the mechanics of unification can only conclude that it has to happen under South Korean control. My undergraduate thesis in the mid-90s was about unification and I believe I got to that conclusion by page 3 — there just is no way for the North to do it. They lack every type of resource from human to physical to evince any kind of control over the South. Their power is purely destructive — they can only hurt or possibly kill the South. They cannot absorb it.
Also, we shouldn’t conclude that a unified Korea will be anti-American. While NORK rhetoric is rabidly anti-American, we don’t know what the average North Korean thinks about the US. If unification were to happen after collapse, the humanitarian aid needed would be massive. I foresee foodbags, blankets and clothing with small, discreet American flags on them (like on the tag). At least that’s what any decent PsyOper will have done. Also, I think collapse would bring some solidarity between Americans and South Koreans. A cataclysm of this magnitude would stretch South Korean society to and perhaps beyond its operational capacity. I believe Americans officially and unofficially would pour out the help. And if American missionaries are allowed into the North, we would see even more billions of dollars worth of materiel move in mere months. I concluded in my thesis that unification would serve American interests strategically and operationally. Events in the intervening decade only strengthen that idea.
It’s gonna cost either way. But the cost of a sudden collapse is too great to bear. SK knows that it cannot afford a sudden NK collapse. If Germany, the world’s 3rd largest economy, has so much difficulty absorbing East Germany, arguably the most well-off of all the former Communist bloc states, then SK, which has a smaller economy than Germany, will experience a pain several times worse.
A slow and continuous process of reconciliation, driven initially by economic joint ventures, merging of infrastructure, and intra-Korea summits is preferably to the chaos and uncertainty that would surely be wrought by sanctioning and isolating NK to the point of collapse. Even with the hard-ball approach, there is slim chance that NK will fall, since it has been weathered by Juche philosophy and can still conduct trade via the Chinese border. But it would only serve to make them more entrenched in their antagonism toward the outside world.
The invisible hand of the market will drive reform, not humanitarianism.
Short of waging war and inducing regime change, economic/material reform must precede political reform. It is a proven historical fact, including for Western nations. Economic and material initiatives will inevitable introduce the elements of civil society, commerce, contact, information that will slowly force change even in a place like NK. But this can only happen effectively in an uncomplicated environment where NK doesnt have to fear the threat of regime change, despite Ambassador Vershow’s soothingly reasurances to the contrary.
I hope changguang is correct. But the South Korean left is potent and under Roh it is digging into society deeply and more rapidly than any credible counterveiling forces are emerging to replace the ageing and disredited right. I predict large-scale revisionism of the kind that is already creeping into public discourse and testing the waters with a Professor Kang here and an anti-MacArthur protest there.
Kushibo - the Chinese are far more patient imperialists and subtle statesmen than you give them credit for. It is simplistic to suggest a U.S. choice between cutting off economic ties or ignoring human rights. The West (and Japan and Korea, for starters) should be more subversive a modernizing presence in China by standing up firmly and consistently for shared democratic values. I see the pressure on Yahoo and Google over Chinese censorship as a great start, because ultimately it puts China’s system on trial. But when push comes to shove, you KNOW the Europeans and the South Koreans will seek to profit from any displacement U.S. business would suffer from confronting China. Japan used to behave that way (sucking up to China after Tiananmen for example) but I’m not sure they would do so again in the current climate of Sino-Japanese friction.
Changguang wrote:
“Anybody who?? given any serious thought to the mechanics of unification can only conclude that it has to happen under South Korean control. My undergraduate thesis in the mid-90s was about unification and I believe I got to that conclusion by page 3 ??there just is no way for the North to do it. They lack every type of resource from human to physical to evince any kind of control over the South. Their power is purely destructive ??they can only hurt or possibly kill the South. They cannot absorb it.”
Of course, given the internal structural weaknesses so evident even to us casual outsiders, the North could fortunately never have any realistic hope of exercising control over the entire peninsula.
Nevertheless, NK has evidently never formally renounced its vision for a unified Korea. The North may play the warm, fuzzy Sunshine card by waving the blue-on-white Unification Flag, but what NK conveniently doesn’t discuss in public is that the reunification they seek is not that of a free-market democracy with its capital in Seoul, but a personal fiefdom run out of Pyongyang.
I believe I’ve read somewhere that the original intent of the Sunshine Policy was twofold: open the North up to economic cooperation and reform, while at the same time “shining light” on human rights and other issues. In the current climate in SK, the former continues apace, while the latter has been all but completely swept under the carpet. Meanwhile, the North seems to milking the arrangement for all that it’s worth, getting economic benefit from things like the Kaesong project, while not being held to account by the South for all the various sordid goings-on that we frequently read about.
“A slow and continuous process of reconciliation, driven initially by economic joint ventures, merging of infrastructure, and intra-Korea summits”
The North is not going to reform in a manner that would facilitate economic growth and increased integration with the South.
The South is paying to prevent collapse. That is all. It has little hope of convincing North Korea to open up and reform. The North will accept what it needs in exchange for as little reform as possible and frequently reverse the reforms it does make.
The most likely best case, pretty much the only real case that matches what we have seen from the North since 1998, is that SK will be able to keep North Korea away from collapse indefinately.
That will benefit South Korean society but cost it plenty.
And it will continue the misery for the North Korean people.
And it is an anti-unification policy.
…And if it’s just staving off the inevitable, then come such time as we finally do see the first reports coming in of Northerners pouring across the dismantled DMZ in the NK equivalent of Trabants to visit Lotte World and taste Choco-Pies, there may be a lot of resentment among ex-North Koreans at how the South turned a blind eye to their plight in the early days of the 21st century. The longer the current situation goes on, the more resentment there’ll be.
So not only might the current arrangement make the path the reunification harder—by helping to shore up the NK government and stave off collapse—but it may well make post-reunification life more difficult as well, by increasing mistrust among northerners of the SK government’s intentions.
We don’t know much about the North, but there have been numerous reports in countless different news media that unfiltered, uncensored news from the outside world does get into the North. There probably already is a widespread awareness among northerners of what people in different countries are doing to help or hinder—intentionally or unintentionally—maintenance of the status quo.
It is also implicit that if the North collapsed (which it may), considering the hard core nature of what has been reported regarding crime and youth gangs in the North, and, if access to the South was possible, there would be a crime wave like there has never ever in South Korea. The police — as they are now — would be unable to contain or deal with such civil unrest. It would be more like one of the rap tunes by Tupac where people come in the front door and take what they want.
“We don?? know much about the North, but there have been numerous reports in countless different news media that unfiltered, uncensored news from the outside world does get into the North.”
Today’s Chosun Ilbo has an interesting article regarding this exact topic: http://english.chosun.com/w21d.....60019.html
Seems some of KJI’s cheerleaders got back home and talked about what they saw in the South. Now they are wards of a State re-education center, reportedly one of the worse ones in the country.
Changguang wrote:
??nybody who?? given any serious thought to the mechanics of unification can only conclude that it has to happen under South Korean control. My undergraduate thesis in the mid-90s was about unification and I believe I got to that conclusion by page 3 ??there just is no way for the North to do it. They lack every type of resource from human to physical to evince any kind of control over the South. Their power is purely destructive ??they can only hurt or possibly kill the South. They cannot absorb it.??r
I strongly disagree. I think North Korean leaders have given very serious thought to the mechanics of unification, and I believe they do have a plan in place. They will absorb it BY destroying it. They will control by slaughter and terror.
Several defector testimonies (of NK officers) reveal that North Korea is planning a deliberate massacre of South Koreans on a staggering scale during a takeover war - Seoul and other cities will be poisoned gassed and mercilessly shelled to inflict maximum casualties. “We cannot make socialists of them so we must eliminate them” were the words spoken to one officer during a briefing by NK’s gas warfare head, when one officer noted/objected that the plan involved gassing “our brothers” in Seoul. “We all understood that anyone who resisted in the slightest way had to be killed on the spot” - another officer speaking of plans for a future ‘Liberation war’. These quotes are from memory, from Bradley’s book on NK “Under the loving care of the Great Leader”.
Please remember, this is a state which regularly has public executions. Think about that. Can you imagine leaving the office for an hour to go outside to, say, Kwanghwamun or Sadang, and watch another human be screamed at for 20 minutes and finally a bullet put into her head in front of you? Can you? This is medieval, folks, and as civilized people who live with a lot of comforts it is hard for us to imagine the levels of ruthlessness and brutality humans are capable of.
After seizing control of the peninsula, Hwang JangYop is on record as saying the North plans to terrorize the survivors with a purge (whether that means camps or killings or both I don’t know) reaching into in the millions. I predict hysterical ‘The evil Japanese/Americans etc are coming all Koreans stand together, it is traitors we are killing, praise your neighbors murder or you and your children get the same” propaganda will be everywhere as well, to give the terrorized SK’s some rationale for the submission I also predict will quickly come.
This possible plan of the North, although viciously ruthless, criminal and bloodthirsty, strikes me as quite …. do-able. Premised on America being out of the picture. Ever notice that ‘America out of SK’ has been the patient and consistent goal of Northern diplomacy? You think it’s because they fear 36 thousand men will attack them?
Perhaps they fancy they can remove American by threatening to nuke Los Angeles, or by launching with Iran and China a joint South Korea-Israel-Taiwan attack that will keep America busy elsewhere (am I the only one who feels a whisper of nervousness everytime King JongIl visits China?), or perhaps they just wish America will decline and go away. Whatever. I guess in a long-winded way what I have just said is that I believe the North could possibly take over and hold the south, purely through terror and killing, and if America is out of the equation.
Well, Hugh, that’s frightening stuff, but I doubt that it’s ultimately do-able, and certainly not in the near future, cause the Yanks would bomb KJI back to 2333BC. Mind you, it could become more possible, with several if’s in place:
If the Norks become much stronger over the years from the support provided by China and SK (and not merely left in a weakened but surviving state by China and SK).
If the SK kicks the US out and is told to not come back-or if the US leaves in a huff and says they won’t be back (can’t see this happening, as the Pentagon knows they couldn’t let the place go under to the Norks (aka Chinese)-missile strikes would be the very least they would provide, unless there was some kind of strategic blocking of any US military intervention by the Chinese).
If the Americans were effectively blocked or unable to provide military support to SK (can’t see this, as no matter what predicament the US is in, they do have nukes and if things were as bad as you describe, the US would probably use them if that was all it could do). Mind you, would the world learn about these things as they were happening? Maybe not, because the leftists of the world would be jumping up and down telling the great satan not to intervene in a ’spat between brothers’.
If China lets the Norks even contemplate such a move, which they won’t allow to happen, unless they are sure the Americans will not step in.
So I don’t think the scenario you describe is realistic, unless the US were out of the picture, and I can’t see that happening, at least not for a long time (next 30-40 years?).
Hugh, mind you, I could see the Chinese perhaps contemplating some of these nasty scenarios that you suggest, if it ever came down to an all-out war with the US. The Chinese are communists, and we know from history that commies tend to fight real dirty, as nasty as they possibly could, Geneva Conventions and everything else be damned.
Well, Hugh, that?? frightening stuff, but I doubt that it?? ultimately do-able,
I’m not so sure if it’s doable (as in succeedable), but what scares me more is that it’s try-able.
A lot of this doomsday stuff is on shaky ground–China has a $114 billion trade surplus with the U.S., and only Taiwan is maybe important enough to it to risk totally destroying its economy. N.K. has limited usefulness as a buffer and source of minerals, and is otherwise a major pain in the ass for China because N.K. defectors bring unwanted attention to China’s human rights situation.
Also, N.K. is structured like an organized crime family, and its ruling class is not about to “unify” with S.K. They will go along with limited cooperation for now, like the Hyundai Asan business and Kaesong, because the regime gets cash and it give S.K. the illusion of progess toward unification.
As much as the Bush administration’s foreign policy has failed elsewhere, the sanctions on N.K., the PSI, resolutions on N.K.’s human rights abuses–these are all steps in the right direction.
China really does not have to go to war with america to bring america down to its knees.
All China has to do is to mess with the economy and america is dead
from the economist
from t shirts to t bonds
july 28, 2005
To keep its exchange rate pegged to the dollar, China was the biggest buyer of American Treasury bonds over the past year. In the first six months of 2005, its foreign-exchange reserves increased by more than $100 billion, to $711 billion, of which about three-quarters are in dollars.
…
the People’s Bank of China has also supported America’s mortgage market by buying vast amounts of mortgage-backed securities.
…
China to diversify its reserves away from dollars. It is unlikely to dump its dollars, but it could well reduce its new purchases of Treasury bonds in favour of other currencies. And, if China really has broken the yuan’s link with the dollar, then this could be the trigger for another general slide in the greenback against the euro, the yen and other currencies, prompting investors to demand higher yields. The fate of American house prices could thus be determined by unelected bureaucrats in Beijing rather than the unelected central bankers of the West.
…
China creates immense opportunities, but it also brings new risks. If it stumbles, or if it decides to buy fewer American T-bonds, pushing up yields, then America might really have something to complain about: the first global downturn made in China.”
from the economist
how China runs the world economy
july 30, 2005
…
revived Bretton Woods system of fixed exchange rates between China (and other Asian economies) and America.
The dragon’s breath
Under this arrangement, China has provided cheap finance to America’s consumers and its government by buying Treasury bonds.
…
America’s trade deficit is due mainly to excessive spending and inadequate saving, not to unfair Chinese competition. If China has contributed to America’s deficit it is not through its undervalued exchange rate, but by holding down bond yields and so fuelling excessive household borrowing and spending. From this point of view, global monetary policy is now made in Beijing, not Washington.
…
A better way to deal with China’s growing power would be to give the country a bigger stake in global economic stability. China should be a full member of international economic policy forums, such as the G7 and the OECD. Western policymakers would be wise to remember another Chinese proverb: “What you cannot avoid, welcome.”
and this interesting exchange between Der Spiegel and Mr. Lee
http://service.spiegel.de/cach.....28,00.html
SPIEGEL: But the Americans are trying to encircle China. They have won new bases in Central Asia.
Mr. Lee: The Chinese are very conscious of being encircled by allies of America. But they are very good in countering those moves. South Korea today has the largest number of foreign students in China. They see their future in China. So, the only country that’s openly on America’s side is Japan. All the others are either neutral or friendly to China.
???????? ???
Why would China want to “bring America down to its knees”? It’s China’s largest export market and investment destination ($244 billion in U.S. Treasury securities). The two nations are so interlinked financially it would set China back decades if it cut off that relationship. The U.S. would probably go into a recession, but would recoup and eventually replace Chinese products with ones from Brazil, India and elsewhere. You have it backwards, it’s China that would be “dead” if they alienated the world’s largest economy.
Michael, you’ve missed that child lux’s main message: ???????? ???
Slim, saw that “message” but I just ignored it. Thought some reality was in order instead of cut-and-paste from the Economist. If he even read the article he picked closely, it’s just saying the U.S. should get its fiscal house in order, which is what the Economist tells every country.
If Luxie is jonesing to live in a communist dictatorship maybe we can all chip in for a plane ticket
Hugh - please provide a link for the quotes you posted.
Mr. Lee: The Chinese are very conscious of being encircled by allies of America. But they are very good in countering those moves. South Korea today has the largest number of foreign students in China. They see their future in China.
(Some) Koreans see their future in China in this way: Korea’s job market is extremely competitive, so it’s necessary to have a leg up somehow. Since everyone learns English in school, a useful language somewhere else is necessary. People are still learning Japanese and will long be trying to excel at English, but with growing business ties to China, learning Chinese seems like a good idea to some.
Ergo, learning Chinese is good for their future. But for Koreans, it goes little beyond that. If China again starts up overtures that they are the Middle Kingdom behind which Korea should fall in line, most Koreans simply will not go for that. Since disrespect and junior status is the reason for a few Koreans to be disgruntled enough with the US that they would want to leave the US-ROK alliance, why would they want to trade that for more of the same but with China?
At any rate, Japan is stil the number-2 sender of foreign students to China.
So, the only country that?? openly on America?? side is Japan. All the others are either neutral or friendly to China.
Japan? You mean China’s #3 export partner and it’s #1 import partner? That Japan?
Kushibo - the Chinese are far more patient imperialists and subtle statesmen than you give them credit for.
For starters, Slim, I am not saying they’re not patient imperialists. They have, after all, waited over a century to get Korea entirely back under their wing.
Are the threats to Taiwan subtle? I would say the decision to declare ancient Kogury? as part of China a subtle indication of their plans, but the the decision to go to enter the war on the Korean Peninsula was not. Neither was the decision to take (back?) Tibet in 1959. Nor was the Hainan Island incident of 2001 all that subtle. When nothing’s happening, they’re moves may be glacier-like: so slow as to be undetectable but still moving in a clear direction. But God help you if you’re beneath them or next to them when a big chunk of ice is ready to break off.
It is simplistic to suggest a U.S. choice between cutting off economic ties or ignoring human rights.
I wasn’t really suggesting that. I was just pointing out that the DLC-GOP powers decided to do so back in 1995. No one is really taking Chinese human rights seriously other than talking about it. With hundreds of billions of dollars in economic ties with the United States now wide open, it’s hard for calls against China to gain any traction.
The West (and Japan and Korea, for starters) should be more subversive a modernizing presence in China by standing up firmly and consistently for shared democratic values.
Should be, but won’t be. Japan and Korea are doing what the United States and the EU are also doing: they’re too busy making money for them to be concerned about these human rights issues, and those that are concerned can lull themselves into believing that open ties, especially open economic ties, will effect a change in China, that it will magically effect an end to human rights abuses there. Last I checked, though, they’re still rounding up them North Korean refugees and sending them back to NK, among other abuses.
I see the pressure on Yahoo and Google over Chinese censorship as a great start, because ultimately it puts China?? system on trial.
Pressure only because it got public. What about all these other sectors that are not the darling of the blogosphere? Anyway, it’s disturbing that Yahoo and Google (and Oracle and others?) even got involved with China’s censorship apparatus to begin with.
But when push comes to shove, you KNOW the Europeans and the South Koreans will seek to profit from any displacement U.S. business would suffer from confronting China. Japan used to behave that way (sucking up to China after Tiananmen for example) but I?? not sure they would do so again in the current climate of Sino-Japanese friction.
Sino-Japanese friction is spilt water on a giant cake; right below the surface, you still have Japan as China’s #3 export partner and its #1 import partner.
South Korea, Japan, the United States, Australia, the EU, etc…. none of them are really interested in human rights abuses in China if it’s going to lose them money or competitiveness. None.
This is why a grass-roots effort to boycott the 2008 Beijing Olympics should go through. If our governments are going to do nothing but pay lip service to human rights abuses and businesses ignore the issue, individuals should say, “Sorry, but I’m not going to support human rights-abusing China with my eyeballs.”
The only good thing about all this economic inter-connectedness is that it makes war-mongering all that more costly. And that, at least, is a good incentive for peace.
???????? ???
Keep thinking that way and insisting on the Korean way over the world’s most successful global economic model. It’s bound to keep Korea an isolated developing nation for a long time to come.
Lux Bearer: “South Korea today has the largest number of foreign students in China. They see their future in China. So, the only country that?? openly on America?? side is Japan. All the others are either neutral or friendly to China.”
To be accurate, Korea sees its PAST in China, and therefore its FUTURE since Koreans are fatalistic and have a backwards-thinking fixation with the past and are therefore pretty much resigned to an eventual resumption of their perennial status as a Chineses vassel state. This complascency is largley driven as well by an irrational hatred of Japan, another manifistation this backwards-thinking living-in-the-past.
While Korea remains mired in the past, China, however, is future-oriented. It knows it will soon surpass and eclipse Korea and eventually engulf it. While mthe Chinese realize this, perhaps Koreans do as well deep down in their hearts, but are exceedingly proficient in denial and rather lacking in self-awareness.
As for Japan being the only nation “openly on America’s side”, the phrase is entirely meaningless drivel. In the global economy there are no sides. The most successful Chinese microeconomies, such as Dalian, are in intimate partnership with Japanese firms (read “The Next Global Stage” by Kenichi Ohmae).
Second, as Asia develops and awakens to the global economy, they necessarily increase their ventures with global US firms, and the US’s influence in Asia is on the rise.
Only fools mired in the past still view today’s gloabal economy in terms of nation states. The key to the future is “glocalization”, the falling away of borders, and the rise of the “region state”. Not only do US firms remain the most competitive, best capitalized, managed and operated, but the US remains the world’s most lucrative consumer market. China’s rise will not change this, but it will complement this, whereas it will not be as rosy for Korea. Korea lacks the global capital, infrastructure, management and mindset to compete in the emerging global marketplace.
Reunification,if it does occur, will not prove the godsend that short-sighted Korean thinktanks envision it to be. A united Korea will still not be of the scale to become a self-sufficient market like the US, Japan or China. Its depenence on global trade will continue even as its international competitiveness declines. Aside from reunification, the government has yet to come up with a “future strategy” to deal with the coming reality.
Given this, Korea’s ace-in-the-hole remains its alliance with the US. The US was largely behind Korea’s economic development through grants, financing, market-access, technology, and zero-net cost military protection. Since the US will remain the dominant global economic leader for years to come and an expanding Asian presence, it represents the best hope for Korea to avoid domination by China. As long as there are Koreans willing to play both ends against the middle - and there appears to be no shortage of them - Korea will continue to value the US alliance.
The Free Trade Agreement is a good illlustration of this. It is Korea that is pushing for the agreement, not the US, since Korea is at best a very minor market for most US interests. Because there is only a brief window in which to accomplish it due to a deadline on the US side, and becasue Korea is so aggressively pursuing it, Korea will likely make numerous concessions that it will probably attempt to renegotiate, characteristically crying foul. Of course, there may be no Agreement at all, but far-sighted Koreans know how much ther is to gain from expanding economic ties with the US, versus the risks that China poses to the Korean economy.
At any rate, Korea remains a “shrimp among whales” and is currently debating with whom they should throw in their lot. But the wildcard in the equation remains: how soon can Korea develop a global mindset? Given the relative disadvantages Korea faces - lack of capital, absence of brand recognition, inadequate English skills and an inward-oriented 19th century nationalistic mentality, the real question is whether Korea will be engulfed by global companies or compete along with them. What does it proffer Korea to fail to give up its uniquely Korean perspective and become truly global minded if they are bought up by Coka Cola or China Incorporated?
The challenge is clear and so is the answer. In truth, Korea has as good a chance as any competitor. But as long as people like Lux Bearer continue to debate irrelevant issues framed in 18th century thinking and fail to recognize the real issues Korea faces in the global environment, there is little hope of Korea realizing its potential.
Snow: Yes, we agree completely. It is not do-able if America is in the picture. And that is why it has not happened to this point.
Richardson: There are no links, those quotes were from memory from Bradley Martin’s excellent new book “Under the Loving Care of the Fatherly Leader”. You can go to a bookstore and check, though.
Now that I’m at home, book in hand, the first quote is from page 487 of the hardcover - I’ll type out a bit more of it:
“Following his arrival in Seoul in 1994, he warned publicly that his military superiors had claimed that North Korea had the capability to wipe out the South Korean population with chemical wepons as well as wreaking havoc on Japan.
I asked Lee how his superiors justified their talk of killing 40 million South Koreans. “They’re saying every South Korean is full of anti-communist ideology” he explained “When we reunite the country we can’t make them communists, so we should get rid of them.” One officeer in Lee’s unit, Lieutenant Colonel Hwang Chang-pyong, had made clear that genocide was on his mind when, in August 1993, he taught in an ideology course that “not only the U.S. army, or the South Korean army - everybody should die”
That’s the first quote. I can’t find the 2nd quote right now (it’s a rather large book) and “Oceans 12″ just started on Catch One, but…it’s there somewhere. I highly recommend buying the book, it’s an astounding read.
“To be accurate, Korea sees its PAST in China, and therefore its FUTURE since Koreans are fatalistic and have a backwards-thinking fixation with the past and are therefore pretty much resigned to an eventual resumption of their perennial status as a Chineses vassel state.”
China is the future.
It is not called ??? ??? for nothing.
you americans should be ashamed.
snow Says:
The Chinese are communists, and we know from history that commies tend to fight real dirty, as nasty as they possibly could, Geneva Conventions and everything else be damned.
how can you say that when the american economy is buoyed by the Chinese?
do you have any idea how much american treasury bonds are held by the Chinese? Yes, the same moolah that is used to finance your imperial delusions
kushibo Says:
The US would be better off spending its energies getting its China policies exactly right.
And what would that be? No economic cooperation without guarantees of human rights? That shipped sailed during the Clinton Administration. Kim Daejung?? Sunshine Policy was just a copying of the DLC-GOP?? own sunshine policy with Beijing.
you americans should just heed the advice of ????? , your staunchest ally in Southeast Asia
China’s ascendancy is inevitable.
empires rise and fall
america must focus on executing a graceful exit
I guess it is not really that bad. Look, the Romans, the Spaniards and the British and the French have done it
michael Says:
If Luxie is jonesing to live in a communist dictatorship maybe we can all chip in for a plane ticket
See how some westerners could think like a ???
I’ll bet that you live in lincoln and you have never been outside of nebraska. Or is it boise, idaho?
China today is refuge to some westerners, who, otherwise, would be downright losers in their own countries.
look at Shawn of china life blog, he used to shine helmets in new york, but according to his confession, his life has never been better now that he is in ???
michael Says:
begin quote
February 17th, 2006 at 10:15 pm
Why would China want to ??ring America down to its knees?? It?? China?? largest export market and investment destination ($244 billion in U.S. Treasury securities). The two nations are so interlinked financially it would set China back decades if it cut off that relationship. The U.S. would probably go into a recession, but would recoup and eventually replace Chinese products with ones from Brazil, India and elsewhere. You have it backwards, it?? China that would be ??ead??if they alienated the world?? largest economy.
end quote
that one was for snow
And yes, I have to agree with you that the Chinese are more astute than that. It would be foolish for them to cut ties with the outside world. And that is the scary thing, 1.3 billion Chinese fully assimilated into the world economy. The Chinese will just own everything. Middle Kingdom it will be once again.
Brazil? Brazil is nothing, all they have are pastures and rubber plantations and hot chicks.
look:
the biggest pure-play foundries are in Asia
TSMC
UMC
SMIC
Grace
Chartered Semiconductor
and the first four of them are in China
“how can you say that when you know the US economy is bouyed by the Chinese?”
Lux, if you would have read what I wrote, you would have noted that I also said, “If it ever came to an all-out war with the US.” Thanks for selectively misquoting me.
And again, your other quote supposedly for me makes no sense at all if you read what I wrote. I was arguing that the Nork attack scenario is very unlikely to happen, as there’s no way that China would allow it, especially if the US is in the picture (militarily).
You seem to assume that I’m arguing that China will attack, a ridiculous conclusion if you had actually read what I wrote. Give me a break, I was arguing that the chances of the Norks attacking were extremely unlikely, not that I think the Chinese will attack. Thanks for misreading and misinterpreting.
Lux Luthor:”China is the future.It is not called ??? ??? for nothing. you americans should be ashamed.”
The shame lies not with Americans but with backwards-thinking China-centrism exhibited by some Koreans like yourself who view China as the future because you see China as Korea’s past. After all, it was China that dominated Korea for centuries, and China that was responsible for our North-South by invading and pushing down to the 38th parallel, successfully frustrating the US-led UN resolution to unify Korea under free elections. People who have never been in a geographical or political position to be dominated by China escape the shame of fatalism, and have a broader and clearer perspective on the future.
Lux: “how can you say that when the american economy is buoyed by the Chinese? do you have any idea how much american treasury bonds are held by the Chinese? Yes, the same moolah that is used to finance your imperial delusions”
Basic lessons in history and economics are in order here. Let me first dispense with history first by explaining that the US is not an imperial nation, but a participative democracy. Unlike other Western nations, it was not an 18th-centuray imperialist power. Since the nation-state is not the driver of economic activity in today’s world, imperialism does not apply in this sphere, either.
Now, to address economics, a recent survey showed that the majority of Korean educations did not understand the basics of capitalism, and this appears to be your problem as well.
First, the US is both a self-sustaining market and one of the most highly developed capital markets. The reason people buy t-bonds is that they are backed by the faith people hold in the US economy, which remains the world’s most competitive by every economic measure.
Second, today’s world is ruled by the profit motive. The Chinese are no exceptions. That Asians and Americans hold capital positions in one another’s economies is illustrative of the fact that there are no meaningful boundaries in the global economy. To single out T-bonds is as meaningless as to single out any other form of capital investment.
Third, it is not the Chinese political structure that holds US bonds, but Chinese economic interests. They were acquired for financial, not political reasons and are not an instrument of political pressure. No single entity or government is in any position to orchestrate a massive economic sabatage with meaningful economic consequences. What you describe is not even theoretically probable, but merely speculative in the sense of bad dime-store novels.
Fourth, capital investment and lending represent exchanges of value. Both issuers and consumers of bonds take on analogous positions of risk and reward. China’s T-bond consumption does not somehow exempt it from this economic inevitability and place it in some kind of superior economic position.
Fifth, the liklihood of a T-bond crisis is extremely low. People hold positions in one another’s economies because they represent sound values. If the value of these investments begin to decline, people will consume less of them over time. But because US bonds are long-term positions, sudden fluctuations do not occur.
Sixth, while a bond crisis could trigger a financial dip, declines and recoveries are part and parcel of capital economics, something that capitalist nations have faced time and again over time. After every decline comes a recovery. The underlying soundness of the economy has been thus tested time and again and is not an undue concern.
Seventh, you can paint numerous much more devestating - and numerous more likely doomsday scenarious than this. The world’s oil supplies could dry up tomorrow. North Korea could precipitate a nuclear conflict that would bring about massive destruction. The earth’s crust could give way. A massive meteor shower could devastate the world.
There are numerous much move valid concerns for humanity to address, such as global warming, the destruction of the rain forests, Mid Eastern unrest, AIDS, epidemics like Bird Flu and the nuclear brinkmanship of small-minded dictators in North Korea and Iran.
Americans are at the forefront in endeavors to eliminate these threats and guaranteeing human rights including your right to express your opinions on forums like this. If you feel that this is to America’s shame, you are free to express that opinion, and this is largely due to the US’s influence and tutelage to Korea in democratic principles.
Whenever I read some misguided, miseducated person like yourself spouting hate, I feel positive and encouraged. This is because I understand that the positive efforts of people working to make a difference in the world do matter, and I understand that your current intellectual darkness is just a prelude to a better understanding. If you can just take that passion and sense of justice, and shape it through education into a mature instrument of positive change, you can join such efforts and help make a big difference in this world. I have faith in you; I encourage you to have faith in humanity, and in yourself.
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