North Korea is now under tremendous pressure from China to change from a controlled economy to a market economy. This is mainly due to the heavy burden that North Korea is on the flagging Chinese economy.
The Kim dynasty has been given its instructions from China to make the transition, as the heavy Chinese subsidies will be reduced dramatically.
North Korean politicians got the message and began the process with the recent speech by the leader. The NK military however has been slower on the uptake and there is considerable opposition and infighting in the military over the issue.
To modernize and transition into a modern market economy, German experts have been brought to North Korea with a view towards instituting a Viet-Nam style of economy, which is a compromise between controlled and market economy, featuring free market sectors and controlled sectors.
The Germans are being rewarded with a mass pool of cheap labour and mining possibilities.
Any unification of the peninsula would require the neutralization of the new entity as a buffer zone between China and Japan.
Of course this is a longer term project as the United States might collapse in a year or two, completely changing the equation as regards Japan and China; and the Koreas. Scripture tells us that a new Europe will shortly rise up, and will take over dominance of the western world as the US falls. This new Europe will then make war with Asia [the Shanghai Cooperation Organization and its allies] in the third year after the new Europe has been set up.
German Master Plans
(Own report) – German foreign policy makers are reacting with great anticipation to the most recent announcement of an economic “opening” of the Democratic People’s Republic of Korea. According to head of state, Kim Jong Un’s declaration, the country is facing a “radical change of course,” which would not even exclude a “reunification” with the Republic of Korea. According to reports, German economic scholars and jurists are in Pyongyang helping to elaborate economic policies, which could also open up lucrative business opportunities for western companies. It has been reported that North Korea disposes of large deposits of natural resources and an extremely cheap work force. For several years, German experts, under contract of the FDP-affiliated Friedrich Naumann Foundation, have been working in Pyongyang to promote the “transformation from a planned to a market economy.” In addition, because of its experience in taking over the German Democratic Republic, South Korea considers the Federal Republic of Germany an important partner for advice and cooperation on the issue of “reunification.” The development taking place on the Korean peninsular is very important for the People’s Republic of China, whose national security is seriously affected.
Radical Change of Course
The current debate over a possible opening of the Democratic People’s Republic of Korea was ignited by the New Year’s address of the head of state Kim Jong Un. Kim, who came to office at the end of 2011, declared that it is “important” to cease the confrontation between North and South Korea. If this is successful, the “division of the country could be overcome and reunification achieved.” Kim announced, at the same time, that this year, there will be “a radical change of course” in the North Korean economy. With the aid of “great inventions and transformations,” the development of the Democratic People’s Republic of Korea into an “economic giant” has become possible. This latter statement is not taken seriously in the West. However, observers are wondering, whether Kim really plans a “change of course” that includes opening up the North Korean economy to the West. German business circles had anticipated such a change, a few years ago, but were disappointed.
China’s Economic Power
As German media have noted, unlike in the past, an economic opening today, could be linked to cautious reform steps. In fact, there are already private entrepreneurial initiatives – for example in the food, textile and electronic trades – even though larger companies remain under state control. Recently, foreign trade grew significantly – in 2010, by twenty percent and by 32 percent in 2011. This is based primarily on trade with the People’s Republic of China. The Chinese-North Korean trade reached around US $5.5 billion in 2011, which amounts to more than 70 percent of North Korea’s total exports and imports. On the other hand, South Korea’s share has fallen to 21 percent. Statistics for 2012 are not yet available, but China’s influence is expected to have continued to grow. According to reports, Pyongyang has negotiated the establishment of two special economic zones, with China – in addition to the already existing one in North Korea’s Rason – whose elaboration could enhance China’s already strong influence.
According to a recent report in the press, head of state, Kim Jong Un is pursuing an alternative course – with German assistance – for the possible coming economic opening. The Democratic People’s Republic of Korea is “being advised by German economists and jurists.” A participating German scholar is quoted saying that an “opening will take place still this year,” a “master plan” has already been established. The scholar explains that the master plan does not foresee the creation of new special economic zones – modeled on, and in cooperation with the People’s Republic of China. Pyongyang is rather more “interested in the Vietnamese blueprint,” which “designates enterprises for investments.” The North Korean government has a special need to “modernize investment laws.” However, because of massive resistance from the military, “it is in no way certain that these reform steps will be implemented.” The report suggests that, if they are, German companies will also be in consideration for business contracts – which could be lucrative. In North Korea there “is a gigantic untapped potential” of valuable natural resources as well as the availability of “a massive (…) cheap (…) work force.”
Berlin’s many years of systematic lobbying has led the Democratic People’s Republic of Korea to accept German experts to aid in preparing the important steps to be taken. The CSU politician Hartmut Koschyk, who is said to have special knowledge of the socialist countries’ collapse, nourishes relations to both South and North Korea. Koschyk was the incumbent chairperson of the “Silesian Youth,” homeland association, when some of its members were engaged in subversive activities among the German-speaking minority in Poland, to help weaken the People’s Republic. Today, Koschyk is one of South Korea’s advisors on “reunification.” Most recently the politician, who is currently the Parliamentary State Secretary in the German Ministry of Finance, served as liaison for the conclusion of a cooperation agreement between South Korea’s “DMZ Museum,” handling the subject of Korea’s division, and the “Deutsch-Deutsch Museum Mödlareuth,” which, according to its self-description is in memory “of the history of the German division.” ‘Various levels of the South Korean government have repeatedly sought information from Koschyk about the procedures the Federal Republic of Germany used to take over the German Democratic Republic, to learn possible lessons, if necessary, from the German experience.
From Planned to Market Economy
The FDP-affiliated Friedrich Naumann Foundation is also developing relatively extensive activities in North Korea. One focus of its admitted activities is the “economic revival of the country.” The foundation initiated its activities in the Democratic People’s Republic of Korea in 2004, with, among other things, a 4-day “training seminar” in cooperation with the North Korean Ministry of Finance, which was held in Pyongyang. In the same year, the foundation carried out a “workshop,” addressing, according to its own accounts, the subject of “the challenges and opportunities” of a possible “transformation from a planned to a market economy.” (german-foreign-policy.com reported.) The foundation has maintained its contacts to functionaries in North Korea’s economy, and continues to develop its activities in Pyongyang. For the first time, a presidium member of the foundation was, allowed to visit the North Korean capital toward the end of 2011. He “noted that economic modernization was making progress,” according to a subsequent report.
Strategic Buffer Zone
The efforts to have the Democratic People’s Republic of Korea open its economy and take steps toward unification with the Republic of Korea, are, by no means, only to gain access to the country’s natural resources and the low-wage work force. At stake are particularly issues impinging on the long-term national security of the People’s Republic of China. Years ago, Shen Dingli, Director of the Institute of International Studies at Shanghai’s renowned Fudan University, noted that North Korea currently serves as a sort of “strategic buffer zone” for Beijing. Its well-armed military is tying down US-American troops in South Korea and thereby preventing the United States from engaging in military activities that could be directly aimed at the People’s Republic of China elsewhere in Asia. “That is North Korea’s ‘contribution’ to China’s national security” explained Shen. Beijing could encounter great difficulties, if Pyongyang were to change sides and “sign an accord with the United States.” This would also be the case, should North and South Korea unite along the lines of the German model. Even the deployment of western troops along the Korean-Chinese border would no longer be out of the question.
From the German point of view, an additional factor would be the great influence Berlin would have on the Korean Peninsular, should North Korea open its economy or even unify with South Korea under influence of the collaboration of German advisors. This would mean that Berlin would be able to secure for itself a foreign policy base, where Germany had never succeeded before – at a strategically central point in Eastern Asia. This would provide the Federal Republic of Germany a position in the Pacific realm, for the ensuing conflict between the USA and China, which would be highly advantageous for its efforts to achieve global influence.
 Kim Jong-un will Konfrontation mit dem Süden beenden; www.faz.net 01.01.2013
 see also Die Achse der guten Wirtschaftsbeziehungen
 Nordkorea bereitet baldige Öffnung der Wirtschaft vor; www.faz.net 04.01.2013
 Nordkoreas Außenhandel wächst kräftig; www.gtai.de 30.07.2012
 Nordkorea bereitet baldige Öffnung der Wirtschaft vor; www.faz.net 04.01.2013
 Deutsch-Deutsches Museum Mödlareuth; moedlareuth.de
 Korea: Gezeichnet vom Kalten Krieg; www.freiheit.org
 see also Gesamt-Transformation
 North Korea: Hope for Economic Revival; www.fnfkorea.org 15.11.2011
 Shen Dingli: North Korea’s Strategic Significance to China, China Security Autumn 2006. See also Even closer to China