Short Cut to Shanghai – China has started to ship coal to Shanghai through the port of Rason in North Korea’s northeast tip. Going through North Korea instead of to the nearest Chinese port cuts off several hundred kilometers of expensive railroad shipping costs from the total price of the coal. Supposedly, China has secured rights to use its own pier in Rason without paying any duties.
China has already leased the border island that lies in the river between China and Rason and is pouring investment into facilities there. Last week, China’s Xinhua news agency vehemently denied an AFP report that China was also stationing troops on North Korean soil to protect Chinese interests in Rason.
North Korea’s new 10-year plan is “a fantasy” — The North Korean government has announced the adoption of a new 10-year plan. According to North Korea’s Central News Agency, this new plan will “take North Korea to the threshold of the development level of advanced nations.”
Commenting on the details of this plan, South Korea’s research institute on North Korea commented, “North Korea has no financial resources and with sanctions it is unable to attract international investment. It seems mainly like a fantasy to give North Koreans some sort of hope.”
South Korea’s analysis did not dwell on South Korea’s own large investments in North Korea’s Kaesong Industrial Park near the North/South border or on China’s swelling investments in Rason.
North-South trade increases 14% in 2010 — Despite sanctions and the sinking in disputed waters of the Cheonan (a South Korean patrol boat on March 27) followed by the cutting off of all government aid from South Korea to North Korea, trade between North Korea and South Korea increased 14% in 2010.
South Korea treats private and governmental aid to North Korea as part of trade statistics, and aid payments fell between 20% and 60% in 2010, according to the Japanese publication the Asahi Shimbun. This was more than compensated for by a tremendous leap in investment of over 50% by South Korean companies in the Kaesong Industrial Park only 10 kilometers over the border in North Korea and a little more than an hour’s drive from Seoul.
Apparently, the lure of rock-bottom labor costs and no pesky labor unions was too much for South Korea’s industry to resist. Trade between the two countries rose to close to 2 billion dollars.
My rocket is bigger than your rocket – According to reports in Japanese newspapers attributed to unnamed “South Korean military sources,” the United States and South Korea have been negotiating since the start of the year to lift the ban on South Korea developing tactical missiles with a range of more than 300 kilometers and with warheads greater than 500 kilograms. Supposedly, according to these same unnamed sources, this will then enable South Korea to join Japan and the U.S. in a trilateral ABMD (anti-ballistic missile) defense pact.
Given that Japan and South Korea have a hard time agreeing to even send observers to each other’s military exercises and that the U.S. flatly turned down a similar request from South Korea in 2009, the timing of this announcement seems suspiciously geared to coincide with the visit of Chinese Prime Minister Hu Jin Tao to the U.S.
No doubt, this report is like the Taiwanese missile tests, which the Taiwanese government claims were “scheduled in advance” but strangely enough happened to coincide with the start of Prime Minister Hu’s visit to the U.S. The Taiwanese missile tests were a flop, with only 19 out of 25 missiles performing properly.