Many people, groups, politicians and news agencies are fast to point out that Kim Jong-il, the Leader of the People's Republich of Korea (PRK) - aka North Korea, is crazy. He's critized as being Hitler like, starving his people while he eats American food and maintains a harem.
Personally, I don't dismiss any of this criticism. In fact, I agree with it and suspect it to be true.
A crazy leader is a Red Herring.
Regardless of his mental faculties, Kim Jong-il is very valuable to China. I am not going to speculate in this article on the potential for China and even Russia to indirectly support North Korea. Regardless of their support, China directly benefits from a crazy North Korean leader. They benefit even more from a crazy North Korean leader with nuclear technology. They may even think that they will benefit from a renewal of hostilities on the Korean penninsula.
Why do they benefit?
Money. Its very simple. China competes on an economic level with both South Korea and even with Japan for manufacturing work and even some service jobs. If South Korea is perceived as being slightly more risky or even destabilized by a potential artillery or nuclear attack from its northern neighbor, business may diversify or redirect itself to China as a growing manufacturing power.
Despite its rapid growth and recent capitalistic changes, China is still considered to be relatively stable from a political perspective. There are also few scenarios where North Korea might attack China. So a destabilized or riskier South Korea, would be an item that potential South Korean customers would have to consider when choosing a manufacturer. It may not be the only thing that turns them away from South Korea, but it could tip the balance in China's favor.
Similarly, if North Korea were to launch an attack on South Korea, it could have a severe and direct impact on South Korean manufacturing capability. China would stand to benefit from less manufacturing competition in Asia.
Even Japanese manufacturing might be hurt in favor of Chinese outsourcing. Japanese technology is widely seen as beeing superior to Chinese technology. However, China is racing to close the gap. China has been repeatedly accused of attempting to steal technologies from many countries including Japan, South Korea and the United States. If North Korea were to attack Japan, the attack itself would have a very serious impact on Japan. A single Nuclear Bomb would not obliterate the country of Japan, but could disrupt a key city or two, but again the perceived instability of the region might direct some business to mainland China. Japanese companies might even consider pushing more of their own manufacturing capabilities onto mainland China, where the technology could be at greater risk. A potential necessity to avoid political instability and damage from attacks.
By far South Korea is in the most direct line of fire from North Korea. The potential for real destruction from a 1-6 nuclear bombs combined with the destruction from countless conventional missiles and artillery weapons, could level a significant portion of the South Korean manufacturing capability that has not already moved off shore.
China might not only benefit fromt he new business, but from its perceived role as a benefactor and aid provider to the victims of both sides of the war. Providing Chinese capital and Chinese goods.
I'm sure that many factions of China are in favor of a stable Asia and are not in favor of a renewed war in North Korea. The primary reason might even be the desire to keep additional US troops off the Korean penninsula.
We should not be into believing that it is completely in China's interest to calm North Korea down. China benefits from all the talk and hype about North Korea's crazy leader.
Technorati Tags: China, Nuclear Technology, North Korea, Follow the Money
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