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NORTH KOREA NEWSLETTER NO. 243 (January 3, 2013)

N. Korea's Economic Reliance on China Increases in 2011: Data

SEJONG, South Korea (Yonhap) -- North Korea's trading with China topped 70 percent of its total exports and imports last year, a report said on Dec. 27, indicating that the North's reliance on its closest ally is increasing amid its isolation from the world.

   According to the report by Statistics Korea in the South, the North's bilateral trading with China came to US$5.63 billion last year, accounting for 70.1 percent of its total trading with foreign countries.

   The ratio is higher than 56.9 percent estimated in 2010 and marked the first time that it has exceeded the 70 percent level since the South Korean statistics agency compiled related data in 2000.

   Information on North Korea is hard to obtain. The statistics agency collects related data from domestic and foreign research institutes studying the communist country and unveils them every year.

   The increase in the North's dependence on China is attributable to the country's further isolation from the world and strained relationship with South Korea. The ratio of its trading with the South fell to 21.3 percent last year from 31.4 percent in 2010.

   As North Korea remains isolated from the international community, the economic gap between the two Koreas has been widening.

   South Korea's external trading volume amounted to $1.08 trillion last year which is 171.4 times larger than $6.3 billion for the North, the data showed.

   South Korea's per-capita gross national income totaled 24.92 million won last year, which is 18.7 times larger than 1.33 million won ($1,239) tallied for the North, according to the data.

   The income gap between the two Koreas, however, slightly narrowed, as the North's economy posted a 0.8 percent growth last year, the first positive growth in three year.


Nuance Expected in China's Policy on North Korea: Experts

WASHINGTON (Yonhap) -- China's new leadership is expected to deal with North Korea in a more aggressive manner, abandoning a "kid-glove" approach, experts said on Dec. 27.

But Beijing will continue to "reluctantly tolerate" Pyongyang's long-range rocket launch program, which the North claims to be part of peaceful space initiative, according to Adam Cathcart, a history lecturer at Queen's University in Northern Ireland.

   His views are in an article on the prospects for China-North Korea relations distributed by the Pacific Forum CSIS, affiliated with the Center for Strategic and International Studies. The co-authors are Nathan Beauchamp-Mustafaga, a researcher at Peking University, and Roger Cavazos, a non-resident associate at the Nautilus Institute.

   "China will reluctantly tolerate space rockets even though these launches enrage regional rivals, and will likely tolerate small arms and weapons development within limits," they said. "It's in China's interest to keep the Korean People's Army on its feet."

   North Korea conducted a successful launch of a long-range rocket earlier this month. The U.S. viewed it as a test of an intercontinental ballistic missile.

   The U.S. and its allies are pushing for tough U.N. sanctions, but China, a veto-wielding member of the U.N. Security Council, has been apparently uncooperative.

   Diplomatic sources said no concrete deal on how to punish Pyongyang is likely by the end of the year. Many U.N. diplomats are on year-end vacations.

   The experts, however, said China is unlikely to blindly take the side with North Korea, especially given the new line-up of China's powerful Politburo.

   When President Hu Jintao was at the helm from 2002 to 2012, the Politburo Standing Committee (PSC), a decision-making organ on key foreign policy, lacked members with direct experience with North Korea, they pointed out.

   That is not the case with the newly formed PSC, whose seven members include Zhang Dejiang and Li Keqiang, they said.

   In particular, Zhang is known for his expertise in North Korean affairs. He attended Yanbian University, where he studied the Korean language, and also received a degree in economics from Kim Il-sung University in North Korea.

   His connections to North Korea and his handling of illegal immigration from the neighboring country as a local official in a border province are believed to be key factors in his rise to power.

   Sun Zhengcai, Communist Party boss of Jilin province, right next to North Korea, also joined the 25-member Politburo.

   "These officials spent formative years in close proximity to North Korea, and benefited from their time in local governments with long-term cross-border interactions with North Korean counterparts," said the experts.

   "They appreciate that patience and constant pressure are key to promoting reform in Pyongyang," they added. "This new generation of leaders is ostensibly better informed on North Korea issues and may lead to some policy nuance -- if not policy changes -- from China."

   The new-generation Chinese leaders are apparently "tired of being pricked by North Korea."

   "As a result, they are letting the DPRK (North Korea) know directly and indirectly that the 'kid glove only' treatment of the previous PSC may be coming to an end," the experts said.


Seoul Retrieves 6 Items of Debris Believed to Be from N.K. Rocket Engine

SEOUL (Yonhap) -- South Korea has retrieved half a dozen items of debris believed to be from the engine from North Korea's long-range rocket, a finding that could provide clues to the communist nation's rocket technologies, a defense ministry official said on Dec. 28.

   The debris was pulled from waters about 160 kilometers west of the western port city of Gunsan in a two-day operation since Wednesday, the ministry official said, adding that they appear to have been damaged a lot from the shock at the time of the crash.

   A Navy salvage ship and five minesweeper vessels were mobilized for the salvage operation. Six deep-sea divers alternately reached the bottom of the sea, about 88 meters from surface, during the operation, the official said.

   North Korea successfully launched the Unha-3 rocket on Dec. 12 and put a satellite into orbit, fueling concerns Pyongyang is closer to developing intercontinental ballistic missiles capable of carrying nuclear weapons as far as the mainland U.S.

   Seoul, Washington and other countries condemned the launch as a disguised test of missile technology and a violation of U.N. Security Council resolutions that ban Pyongyang from any ballistic activity over concerns it could be used for missile development.

   The rocket's first stage fell in the Yellow Sea and the second stage near the Philippines.

   South Korea's Navy has been scouring the area where the first stage fell to retrieve debris. Including the latest finding, 10 items of debris have been recovered so far. They include parts of the rocket's oxidizer container and fuel tank.

   "Should the object retrieved this time be confirmed to be engine debris, it will be useful for analyzing North Korea's long-range rocket technologies," a military official said.


N. Korea Looks Technically Set for Nuke Test: U.S. Think Tank

WASHINGTON (Yonhap) -- North Korea appears to be ready to conduct a nuclear test in as little as two weeks once a political decision is made to move forward, a U.S. think tank said on Dec. 28 in an assessment based on satellite imagery.

   "Satellite photos as recent as December 13 show that Pyongyang is determined to maintain a state of readiness at the area of the Punggye-ri nuclear test site, where a third test is expected even in the dead of winter," the U.S.-Korea Institute at the Johns Hopkins School of Advanced International Studies said on its website, 38 North.

   The institute scrutinized several satellite photos of the North's nuclear test site, taken by GeoEye, a commercial geospatial information provider, in March and April and then again on Oct. 3, Nov. 19, Dec. 2 and Dec. 13.

   A previously unidentified structure was spotted that may be intended to protect data-gathering equipment from inclement weather, the institute said.

   "The North Koreans have restored the capability to conduct a nuclear test at the south tunnel of the Punggye-ri Nuclear Test Facility in the aftermath of rains this past summer and fall," it added. "They continue to maintain the test site at a state of readiness that could allow them to conduct a detonation as soon as two weeks after such a decision is made."

   A possible setback, however, is the continued stream of water that appears to be coming from the tunnel entrance, indicating a possible problem with seepage, which could adversely affect a nuclear device and sensors intended to gather data on and monitor the test, according to the institute.

   "Whether this problem is under control or has been solved remains unclear," it said.

   The North carried out two previous tests, in 2006 and 2009, and succeeded in a long-range rocket launch earlier this month.

   The U.S. and its allies are pressing for tougher U.N. sanctions against Pyongyang, but the effort has been apparently hamstrung by China.


N. Korea's Trade with China Likely to Hit Record in 2012: Report

SEOUL (Yonhap) -- North Korea's trade with China is likely to reach a record volume this year as the North's economic reliance on its closest ally is deepening amid its isolation from the world, data showed Dec. 30.

   North Korea's trade with China was valued at US$4.96 billion won in the January-October period, up 6.3 percent from a year earlier, according to the Korea International Trade Association (KITA).

   Given the monthly trade volume reaching $400 million to $500 million this year, the full-year trade is likely to surpass the current record volume of $5.62 billion tallied for last year, the KITA said.

   China's trade surplus with the North amounted to $760 million in the cited period, up 33 percent from a year earlier.

   China's exports of oil and petrochemical products accounted for the largest portion of $483 million, followed by trucks with $87.5 million and flour with $52.6 million, it added.

   In a separate report by the state-run statistics agency, North Korea's trade with China accounted for more than 70 percent of its total exports and imports last year, indicating that Pyongyang's reliance on China is deepening.

   South Korea's relations with the North have been frozen since President Lee Myung-bak took office in 2008, virtually cutting inter-Korean economic cooperation.

   In response, the North has strengthened its ties with China in an effort to help revive its moribund economy alongside stricter international sanctions following nuclear and rocket tests.


U.S. Congress Introduces New Legislation on Protecting N. Korean Children

WASHINGTON (Yonhap) -- The U.S. House of Representatives passed a bill on Jan. 1 aimed at protecting "stateless children" from North Korea.

   Entitled "An Act to develop a strategy for assisting stateless children from North Korea, and for other purposes," the bill notes that hundreds of thousands of North Korean children suffer from malnutrition in the socialist nation.

   It also says many North Korean children become orphaned or stateless in neighboring nations, especially China.

   A steady number of North Koreans flee their hunger-stricken nation with their children. Concerns grow that those children are being left without proper care.

   The bill, also dubbed "North Korean Child Welfare Act of 2012," calls for the U.S. secretary of state to "advocate for the best interests of these children, including, when possible, facilitating immediate protection for those living outside North Korea through family reunification or, if appropriate and eligible in individual cases, domestic or international adoption."

   It demands that the secretary of state designate a representative to regularly brief Congress on the U.S. government's efforts to protect North Korean children.

   The Senate passed the bill last week as well.

   It is a revision of a bill, named the "North Korean Refugee Adoption Act of 2011," sponsored by Rep. Ed Royce (R-CA).

   The new bill calls for the U.S. government to develop a broader strategy for assisting North Korean children.


Report: Google boss to visit North Korea

WASHINGTON (Yonhap) -- Google's executive chairman, Eric Schmidt, plans to visit North Korea as early as this month, a news report said on Jan. 2.

   Schmidt will travel to the communist nation on a trip organized by former New Mexico Gov. Bill Richardson, the Associated Press said.

   The Google head's trip to North Korea, if confirmed, comes as the country's new leader, Kim Jong-un, seeks an "industrial revolution" as a way to develop his impoverished nation.

   Kim, believed to be in his late 20s, has shown signs of pushing for an "economy-first policy" away from his father's "military-first" approach.

   Google officials were not available for immediate comments on the reported trip to North Korea by their boss.

   Responding to Yonhap News Agency's inquiry, a U.S. State Department official said, "We don't have any information about Eric Schmidt."

   Meanwhile, Richardson, a former U.S. ambassador to the United nations who has often served as an informal U.S. informal point man on Pyongyang, may try for the release of Kenneth Bae, a Korean American detained in North Korea, according to AP.

   Responding to Yonhap News Agency's inquiry, a U.S. State Department official said, "We don’t have any information about Eric Schmidt."

   The official, speaking on the condition of anonymity, said there has been no new development in efforts to win the release of Bae.


U.S. House Passes Resolution against North Korea for Its Rocket Launch

WASHINGTON (Yonhap) -- The U.S. House of Representatives has passed a bipartisan resolution condemning North Korea's latest rocket launch, but the Senate has yet to work on it, a congressional source said on Jan. 2.

   The House passed the resolution by voice vote without any objection on Jan. 1, added the source.

   The non-binding resolution characterizes the North's long-range rocket launch on Dec. 12 as a "flagrant violation of specified U.N. Security Council resolutions."

   North Korea is already under U.N. sanctions that prohibit the communist nation from carrying out any launch using ballistic missile technology.

   The House resolution urges China and other U.N. member states, to "immediately impose sanctions covered by such resolutions and censure North Korea."

   Rep. Ileana Ros-Lehtinen (R-FL), the outgoing leader of the House Foreign Affairs Committee, hailed the passage of the resolution.

   The bill not only seeks to further the U.S. national security interests but to promote the rights of those oppressed abroad, she said.

   The new resolution against North Korea is a concurrent measure that requires approval from both the House and Senate.