Mr. Kim Jong Il’s “secret” trip to China was one of the worst-kept secrets in recent history. Although the Chinese government refused to officially confirm the visit by the reclusive North Korean leader, the news was out as soon as Mr. Kim’s special train crossed the border into China last week. If much of his itinerary is now known, one big mystery remains: What was the purpose of the trip? That is the question that has real significance for North Korea, the Korean Peninsula and the rest of the world.
There were probably two reasons for the visit. The first was China’s desire to show the world — and the new U.S. administration in particular — that it still has clout in Pyongyang. The Beijing government’s desire to be a leading power in Asia depends on just that sort of influence. Last year, just before Mr. Kim revealed that he would meet with his South Korean counterpart, Kim Dae Jung, the North Korean leader made another trip to China — which was a better-kept secret — to brief his hosts on the upcoming summit. It is tempting to think that another breakthrough might be in the works.
Second, the world has been pushing North Korea to reform its economy. The situation in the country is dire. Hundreds of thousands, if not millions, of people have died from starvation over the last decade. Many more suffer the effects of hunger and malnutrition-related diseases. Quite simply, North Korea cannot feed its people. Its economy does not work.
Reportedly, China has advocated market-oriented reforms. Beijing’s interest is twofold. It prefers to have a stable country, capable of supporting itself, on its northeastern border. North Korea’s adoption of a version of Chinese market socialism would also confirm Beijing’s influence in Pyongyang, as well as validate the Chinese economic model, which is important for an ideology-driven state like China.
Mr. Kim’s itinerary gave him a good look at what reform would mean. In addition to meetings with Chinese President Jiang Zemin and Premier Zhu Rongji, the North Korean leader visited the Shanghai stock exchange, a Japanese-affiliated semiconductor plant, and a U.S.-affiliated auto plant. During his visit to China last May, he visited the Legend company, China’s biggest computer maker.
There are other encouraging signs. According to South Korean reports, a Research Institute on Capitalism has been set up in the Ministry of Trade to collect information on market economies. Mr. Kim’s visits to the manufacturing plants — and his much-publicized comments to foreign visitors about e-mail — show a real interest in the technology that his country desperately needs if it is to modernize its economy. Pyongyang announced last week that computer education would be made a compulsory subject in schools. Last month, North Korea declared that it would “computerize the whole country.”
While North Korea may be interested in reform, it is unclear whether the government truly understands what that requires. The government has set up special economic zones to lure foreign investment, but they have been desolate areas, unprofitable and largely unsuccessful. The leadership’s notion that capitalism is a contagion that can be isolated and contained will doom other limited reforms. The same mind-set will ensure that attempts to use information technology will also fail. The value of such technologies is dependent on the network, the web of connections to the rest of the world.
Then again, the idea that contact with the outside world has to be rigidly controlled could mean that the North Korean government understands perfectly well what reform would mean. Isolation is the only way of ensuring that the North Korean people do not know how badly their government has failed them. The government’s survival depends on its ability to describe the world as it chooses without fear of contradiction.
The tension between the need to open up and the unintended consequences of reform is growing. The experiments, such as the economic zones, are not working. Hyundai, which agreed to pay $942 million for the right to run tours to a sacred site in North Korea, has asked Pyongyang to halve the monthly fees of $12 million because it is losing money on the arrangement. The government has refused, most likely because it cannot afford to give up what little income it has. Unfortunately, the unwillingness to compromise may hamper future deals with Hyundai. Perhaps Mr. Kim has returned home with a better understanding of Hyundai’s thinking. In that case, North Korea might be ready to do some business.
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