Tag Archives: China

The Likelihood of a US-North Korea War. How Can China Help?

A US-North Korea war is highly unlikely. What is likely is status quo – vibrating waves of security tensions, sanctions, and South Korea and Japan’s whiny diplomacy to tell on North Korea to the US. As much as the world is entertained by Trump’s loud rhetoric that the US will unilaterally take care of the North Korean problem, the stakes are too high for China, South Korea and Japan to allow US attack on North Korea. Perhaps the only agenda common to China, South Korea and Japan right now on this matter is that none of them wants a war in the region.

When it comes to North Korea, we’re talking about a regime that:

• thrives on the nation’s fear of the regime;
• is not accountable to the nation for its actions;
• will not hesitate to starve the nation just to be able to wage a war, if it must;

And yet it is highly unlikely that Kim Jong Un wants to start war with the US. The dictator is brandishing threats against the US and its two Asian allies in the region to likely seek the least compromised peace treaty with the US. The regime would not see itself gaining in a peace negotiation unless it can project formidable military capability. Sustaining the regime is undoubtedly Kim’s biggest priority and going into a war with the US is his least likely option.

The US unilateral strikes on North Korea will likely anger Japan and South Korea more than China as the two Asian countries will have to bear the brunt of a North Korean retaliation. The safety of South Koreans and Japanese are as important as that of the US, not to mention that there are 29,000 and 50,000 US troops in South Korea and Japan respectively. Besides, North Korea has massed artillery and missile capability adjacent to the demilitarized zone, close to South Korea. It has been estimated that in this scenario alone, North Korea could potentially cause 100,000 casualties in South Korea.

China, on the other hand, has remained ambivalent whether or not it will defend North Korea in the event of a military conflict. According to the 1961 Sino North Korean Treaty of Friendship, Cooperation, and Mutual Assistance, China is obliged to intervene against unprovoked aggression toward North Korea. But the Asian superpower has its own priorities in the region and can likely adopt other means to stop the supposed war between the US and North Korea. China’s support to North Korea dates back to the Korean War (1950-1953). Since then, China has provided political and economic backing to the North Korean regimes. But relations between the two countries have strained over the years since North Korea’s proliferation of nuclear weapons. Beijing has also supported sanctions from UN Security Council Resolutions and implemented new trade sanctions including reduced energy supplies to North Korea and has called for denuclearization talks. But China is also known to have stopped international punitive action against North Korea over human rights violations. China’s support to North Korea ensures a buffer between China and democratic South Korea, home to around 29,000 US troops and marines. Also, the apprehension of hundred of thousands of North Korean refugees flooding into China in the event of an unstable North Korea is a huge concern for Beijing. It is highly likely that China will want North Korea’s stability, which, otherwise, will jeopardize China’s strategic buffer and bring US troops too close for comfort.

While Trump has been urging China to do more to confront North Korea, the US has also sent an aircraft carrier strike group to the region, heightening concerns in China. China is worried that North Korea’s test of military hardware could provoke a strong response from Washington. Amidst the tension, China has sought Russia’s help to cool tensions over North Korea. Russia has also warned North Korea that Kim’s threats to deliver preemptive nuclear strikes could create a legal ground for the use of military force against the country.

There is a realistic possibility that the US does not know exactly what North Korean nuclear capability is as Kim’s threats have rapidly escalated US concerns. But the US ought to know that North Korea’s military capability is sufficient to annihilate millions in South Korea and Japan, should a war break out between the US and North Korea. That North Korea will be smashed in retaliation cannot be a consolation or measure of success in this war.

The US has pushed North Korea to irreversibly give up its nuclear weapons program in return for aid and diplomatic benefits. Washington believes in using pressure to influence North Korea to change its behavior. But the only likely power to influence North Korea is China. Pressing China to force North Korea to give up its nuclear arms is, however, ineffective, rather pushing China to make sure that North Korea does not use them is a reasonable way forward. It is almost certain that Beijing will actively seek to stop a supposed US strike on North Korea. This could be through attempts to force North Korea to negotiate. If that fails and a war is imminent, China is likely to deploy troops on the line in North Korea to dissuade the US from striking. It’s the same strategy that the US adopts as it stations troops in South Korea and Poland. The Chinese forces in North Korea would then also be in a position to force a coup and install an alternative government to the Kim regime, which ensures that North Korea survives and Chinese priorities in the region are served.

The lynchpin of this assessment is that Kim Jong Un is a rational actor in this matter. It is likely that he will not lose sight of his need to sustain his regime. With that in perspective, tensions will still prevail but the likelihood of a war in the region is remote.

Hyperinflation in Venezuela: recent events and current outlook

December was not a good month for the Venezuelan people. The power political reverberations of former President Hugo Chavez’ death have reached a new climax in the last month of 2016. A widespread financial crisis sparked by governmental mismanagement; runaway hyperinflation and a severe drop in oil prices has ultimately led to major civil unrest and public violence. The current situation led the UK Foreign Office and US State Department to issue travel warnings for a country which has not been in this much turmoil for a long time. The month started on a bad note after Venezuela was expelled from MERCOSUR, the regional trading bloc. Following a decade in which strong growth and leftist policies across South America led the bloc to embrace Venezuela, the suspension now underscores the ideological split in a region struggling with plummeting commodity prices and weakening economies. It further isolates the administration of Venezuelan President Nicolas Maduro, who is accused of exacerbating the political, economic and humanitarian crises battering the country.

Meanwhile Maduro sent his Foreign Minister Delcy Rodriquez to Buenos Aires to attend a bloc meeting. Being expelled, Rodriquez was physically prevented from entering a meeting room, which led to the Minister becoming ‘gravely hurt’, according to Maduro. The removal of MERCOSUR put the Bolivar, the national currency, under increased pressure. Devaluation and soaring inflation led to the issuing of new higher-value notes. A backpack full of cash is often required to pay bills at a restaurant or supermarket. The central bank said that six new bills ranging from 500 to 20,000 bolivars would come into circulation halfway through the month. The largest note used to be 100 bolivars and worth about two US cents. Over the past month, the currency has tumbled by 60% against the dollar on the black market. In order to facilitate the use of higher denominations, Maduro pulled the 100 bolivar note creating a national cash shortage on top of the brutal economic crisis. After two days of unrest over the measure – including one death and dozens of shops ransacked – Maduro postponed the measure until 2 January. That helped stem violence, though there were still reports of more lootings in other parts of the country. The border between Venezuela and Colombia was closed for 72 hours in order to prevent the flow of cash out of the country. The Venezuelan crisis has also strained its relationships with allied countries and businesses.

The Chinese Foreign Ministry spokeswoman Hua Chunying said that it has asked the Venezuelan government to take measures to protect Chinese people and their property. Multiple Chinese-run business have suffered from looting. Ford Motor Company has halted auto production in Venezuela and will not resume it until April: “It is a measure to adjust production to demand in the country.” The pressures on the Venezuelan people and economy are not likely to alleviate soon, although it is a realistic possibility to see an extension of the current rise in oil prices in the coming year, perhaps the country’s only hope amid a folly of bad news.

UN Imposes New Sanctions on North Korea

The United Nations Security Council has imposed new sanctions on North Korea over its nuclear programme, with the latest sanctions targeting the secretive nation’s valuable coal exports to China.

Under the new sanctions, which follow North Korea’s fifth and largest nuclear test in September, coal exports will be decreased by about 60% under a strict new sales cap. Coal is North Korea’s to export earner and diplomats have disclosed that the export cap of 7.5 million metric tonnes would cost it US $700 million in lost earnings compared with 2015 sales. Exports of copper, nickel, silver, zinc and the sale of statues will also be banned.   The resolution also blacklists eleven more people and ten entities, who are said to be connected to North Korea’s nuclear and ballistic missile programme, imposing a travel ban and asset freeze.

China, believed to be the only state that purchases North Korean coal, agreed to the sanctions after months of negotiations with the United States and the Council unanimously approved the sanctions resolution. While China is the reclusive country’s primary ally, and has traditionally protected it diplomatically over fears of what may occur if the government were to collapse, it has however grown increasingly impatient with its actions.

UN Secretary General Ban Ki-moon has disclosed that the latest sanctions sent an “unequivocal message that the DPRK must cease all the provocative actions and comply fully with its international obligations,” adding, “sanctions are only as effective as their implementation.” Meanwhile US ambassador to the UN Samantha Power has admitted that “no resolution in New York will likely tomorrow persuade Pyongyang to cease its relentless pursuit of nuclear weapons,” adding however that “unprecedented costs” were being placed on North Korea for defying the international community.

North Korea has been under UN sanctions since 2006 over its nuclear and missile programme.

Latin American Consequences of the US Presidential Elections

The US presidential elections are already swinging the pendulum for Latin America in significant ways. The fear that the US will now revert to protectionism lead to a major sell off across different asset classes. The Mexican Peso tumbled to 20-years lows and has hardly recovered as of yet, pulling down the entire region. After an initial quick fall the Dollar bounced hard and is currently trading at multi-month highs. This has exacerbated the devaluation of Latin American currencies, which are traded against the Dollar.

Apart from the financial fallout, geopolitical consequences of Trump’s future policies have appeared as well. Now that Trump has confirmed he will not support the Trans-Pacific Partnership, potential members like Chili, Peru, Mexico and Colombia will likely beef up their bilateral economic relations in order to compensate for TPP. Peru already stated to foresee bilateral negotiations with Australia and New Zealand. Argentina, very open to free trade, will receive $4.1 billion in investments from Canada. This is about half the amount expected from US companies through 2019. A more protectionist approach by Trump could bring that amount down and leave the door open for Canadian companies to fill the gap. Withdrawal from NAFTA could exacerbate this and will constitute extra incentive for Latin American countries to strengthen bilateral relations with other geopolitical powers. Peru, which has strong historic ties with China, already trades more with China than with the US, a development that could potentially spill over to increased security and military cooperation. President Kuczynski’s pull to China is very clear: “We hope to tap into new markets in China, especially for agriculture. We are also interested in cooperation on science and technology. Furthermore, cultural exchanges and cooperation in archaeology and climate change are also very important for us.” It remains the question whether the US will look on from the sidelines if Russia and China increase their influence in Latin America.

Interregional relations are likely to strengthen as well, given Trump’s veiled threats to Central American countries on the topic of immigration. Whether the US will build a wall or will significantly increase deportations of immigrants, Honduras, Guatemala and El Salvador have said to form a bloc with Mexico to deal with the US under Trump leadership. However, with regards to Mexico, it is likely that organized-crime competition will increase, as a result of traffic restrictions and stricter border controls. In this scenario, conflict over control over the remaining open crossings would lead to increased violence. Violence in border cities like Ciudad Juarez and Tijuana is already on the rise. The second security consequence for Mexico stems from the influx of deportees, who would have few employment opportunities in Mexico. They could provide a ready pool of labour for criminal organizations. Central American cooperation is said to increase collaboration on jobs, investments and migration.

It remains to be seen as to which direction the pendulum will eventually swing, however, for the moment significant financial, economic and security consequences are already visible in Latin America.

MH370 Search: New Debris Located in Madagascar

Officials this month confirmed that five new pieces of debris that could belong to the missing Malaysia Airlines flight MH370 have been found in Madagascar.

The findings were made by debris hunger Blaine Gibson, who has previously found other parts of the plane. Mr Gibson, a laywer from Seattle, has funded his own search for debris in eastern Africa. According to officials, two fragments appear to show burn marks, which if confirmed would be the first time that such marks have been found. Mr Gibson has disclosed that the two alleged burnt pieces were recovered near Sainte Luce, in southeastern Madagascar. It is unclear, however, if the apparent burn marks were caused by fire prior to the crash or as a result of burning afterwards. Another small piece was found in the same area while the two other pieces were located in the northeastern beaches of Antsiraka and Riake, where debris had already been found. All of the five fragments located this month have the “honeycomb” material that was found in other MH370 debris. The new discovered have been sent to investigators at the Australian Transport Safety Bureau (ATSB).

A number of other pieces of debris, some confirmed to have come from MH370, have been found in countries near Madagascar. They include a section of the wing called a flaperon, which was found on Reunion Island, and a horizontal stabilizer from the tail section and a stabilizer panel with a “No Step” stencil that were discovered in Mozambique.

MH370, which was flying from Kuala Lumpur to Beijing, had 239 people on board when it vanished on March 2014. The flight is presumed to have crashed into the southern Indian Ocean after veering off course. Australia has been leading the search for the missing aircraft, using underwater drones and sonar equipment deployed from specialist ships. The search, which also involves China and Malaysia, has led to more than 105,000 sq km (65,000 sq miles) of the 120,000 sq km search zone being searched so far. Countries have agreed that in the absence of “credible new information” the search is expected to end later this year.