Sat, Mar 18, 2006 - Page 9 News List

Beijing outpaces Seoul with North Korean influence

South Korea wants to lay the groundwork for reunification with the North, but that plan may be complicated by Beijing's growing economic and diplomatic clout in the region

AP , KAESONG, NORTH KOREA

"The position that Pyongyang wants to be in is having two suitors," Beck said. "But if they have a choice they're going to favor Beijing because it'll be much easier to contain the contamination."

North Korea's economy is showing signs of emerging from the horrors of the 1990s, when a famine caused by bad weather and compounded by mismanagement resulted in the deaths of an estimated 2 million people.

The North's economy expanded an estimated 2.2 percent in 2004, the sixth straight year of growth, according to the Bank of Korea, which has issued an annual estimate since 1991. The North has released no official data since the 1960s.

Modest economic reforms since 2002 have encouraged some private enterprise, allowing the emergence of an entrepreneurial class with money to spend on imported goods.

Divided since the 1950-53 Korean War ended in a truce, North and South have recently engaged in a limited detente, including their first summit in 2000 in Pyongyang.

North Korean strongman Kim Jong-il, however, has declined to carry out a reciprocal visit and balked at overtures from current South Korean President Roh Moo-hyun to visit Pyongyang again.

On the contrary, summits with China have become almost a regular event.

Chinese President Hu Jintao (胡錦濤) visited Pyongyang in October, reportedly offering a trade and investment package worth up to US$3 billion and nudging Kim to remain involved in international talks on ending the North's nuclear programs.

In January, Kim made a secretive nine-day journey to China's booming southern regions, his third trip to the country since 2001, causing speculation he may be considering further Chinese-style economic reforms.

Still, things can change quickly with North Korea.

Just five years ago Japan was by far the North's largest trading partner. Now, amid political tensions over the North's abductions of Japanese citizens, it's fallen to No. 3, with exchange last year totaling about US$200 million far below the roughly US$1.3 billion in 2001.

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