The U.S. and North Korea have had a difficult history. The two countries were the primary combatants during the Korean War and still have not established a peace treaty. However, in the late 1970s, the Kim regime and the Carter administration considered normalizing relations. Carter’s national security team concluded there was little value in talking directly to North Korea and, ever since, the U.S. has essentially “outsourced” North Korea to China.
On its face, this decision makes sense. China is critically important to North Korea’s economy; more than 80% of North Korea’s foreign trade is with China. Mao described relations between the two countries as “close as lips and teeth.” However, relations are more than just economics. A review of historical relations between China and North Korea indicates a deep animosity that inhibits China’s ability to control the policies and decisions in Pyongyang.
In Part I of this report, we will begin our study of the historical relationship between North Korea and China, including a review of the Minsaengdan Incident and a broad examination of the Korean War. Part II will complete the analysis of the war, discuss the Kim regime’s autarkic policy of Juche and outline the impact of the Cultural Revolution on North Korean/Chinese relations. Part III will cover the controversy surrounding North Korea’s Dynastic Succession, the end of the Cold War and the ideological issues with Deng Xiaoping. Finally, we will recap this history and its impact on American policy toward the Democratic People’s Republic of Korea (DPRK) along with market ramifications.
The Minsaengdan Incident
In the early 1930s, Korean and Chinese communists were allied against Imperial Japan, which was in the process of invading Manchuria. At the time, the border between the two countries was rather amorphous, which meant that Chinese and Korean communists were dispersed in northeastern China and what is now North Korea. Japan, conscious of the nationalistic leanings of the Koreans, tried to divide the two communist groups by offering autonomy from the Chinese in return for supporting Japan.
As the Imperial Japanese Army steadily took control of the Korean Peninsula, they became less interested in Korean nationalism. However, Chinese communists became convinced that Korean communists were traitors and could not be trusted. Chinese Communist Party (CPC) leaders in the area implemented a vicious purge, summarily executing somewhere between 500 and 2,000 Korean Communist Party (KPC) members. Kim Il-sung narrowly missed the fate of his fellow communist members; the CPC’s selection criteria for punishment appeared to be mostly driven by ethnicity. The young Kim Il-sung had to have been shaken by these events and it would not be a huge stretch to suggest that the Minsaengdan Incident fostered a mistrust of Chinese motives.
The Korean War: The Invasion
After WWII, the allies had divided Korea into the north and south around the 38° parallel. Kim Il-sung’s goal was to unite the Korean Peninsula under his leadership. Kim petitioned Soviet leader Stalin for support in an invasion. Stalin gave conditional approval; he would support action if (a) the U.S. did not get involved in defending South Korea, and (b) China was willing to support the invasion.
Kim convinced Stalin that the U.S. would not become involved. Kim also told Stalin that Mao had always supported liberating the Korean Peninsula. At the same time, Kim assured Stalin that the DPRK’s forces were sufficient to unify the country. As part of war preparations, Kim visited Mao in May 1950 to discuss his invasion plans. Mao offered his support after receiving a telegram from Stalin and also offered his advice on Kim’s invasion plans. Mao had planned to offer the DPRK military support after the People’s Republic of China (PRC) invaded Taiwan to eliminate Chiang Kai-Shek’s Republic of China (ROK), which had escaped the mainland during the Chinese Communist Revolution. Since Kim was moving first, Mao offered his support and military forces; Kim demurred, but Mao did indicate that China would send troops if the U.S. became involved.
When Kim invaded South Korea on June 25, 1950, he gave no advance notice to Mao. The Chinese learned of the invasion through foreign news services. The war initially went well. The Korean People’s Army (KPA) rapidly moved south, pushing South Korean and American troops into the southwest corner of the peninsula. Zhou Enlai, China’s premier, suggested to Kim that the KPA should boost its defenses of ports to protect against an amphibious landing. As Chinese fears of a U.S. escalation rose, the Chinese Volunteer Army (CVA) began amassing troops on the Sino-Korean frontier. Mao indicated that China would counterattack if U.N. troops crossed the 38° parallel.
Kim deliberately kept Chinese leaders in the dark about military progress as CVA mobilization continued through the summer. Mao criticized the KPA’s strategy of capturing territory instead of directly attacking enemy forces. This strategy left the KPA vulnerable to counterattack. Soviet military advisors offered similar warnings. Kim believed that an amphibious assault behind his lines was not possible. The North Korean leader was convinced he was on the path to a quick victory, promising to vanquish the enemy by August 1950. In early September, Chinese military advisors recommended a strategic retreat; Kim responded, “I have never considered a retreat.”
The Korean War: U.N. Counterattack and China’s Entry into the War
On September 15, 1950, Gen. MacArthur launched an amphibious landing at the port of Inchon, near Seoul. The landing was wildly successful; by the end of the month, U.N. forces had retaken Seoul and the KPA found their supply lines severed. The warnings offered by Soviet and Chinese advisors had proved accurate as the KPA was now in an exceedingly dangerous situation. Despite these dire conditions, Kim continued to provide almost no information to China or the Soviet Union. However, it became evident that it was only a matter of time before U.N. forces captured the main force south of the 38° parallel, and the remaining troops north of the former border would be unable to stop the U.N.’s advance once that occurred. The Politburo of the DPRK agreed to request help from the Soviet Union and China. Although Stalin had already indicated that Soviet troops would not participate in the war, Kim asked Stalin first, hoping to avoid the loss of face by asking Mao. Stalin suggested the CVA would be the best choice to help Kim. Thus, the North Korean leader was forced to swallow his pride and ask for Chinese military assistance. As noted above, Kim had been overly confident in his and the KPA’s ability to wage war and was loathe to ask China for help.
However, China’s entry into the war did not immediately resolve the differences between North Korea and China, nor Kim and Mao. The head of the CVA was Commander Peng Dehuai. When Kim agreed to “allow” Chinese troops into North Korea, he assumed his generals would be in command. However, when it became clear that the Chinese commitment was massive, a force of several hundred thousand troops, Kim realized the KPA would have to cede control. Kim asked for a merged command structure, but Peng would have none of this. Stalin recommended CVA control and the Chinese leadership was so disenchanted with the Korean military’s prowess that they were not about to give control of their troops to the KPA.
Peng’s report to the Chinese Central Military Commission was damning:
The Korean Party’s recruitment situation is extremely serious. All men between the ages of 16 and 45 have been inducted into service. No one is caring for the families of drafted workers, and the masses have noth- ing to eat. There are no long-term plans, and adventurism is all one can see! Military control has been extremely childish. On the nineteenth Pyongyang issued an order to defend to the death. As a result, 30,000 defenders could not escape [from advancing UN forces]. The North Koreans agreed to conduct party and political work in the KPA, but they have not agreed to construct a political commission system.
Despite these issues, a unified command wasn’t established until January 1951. By this time, MacArthur’s troops had reached the Yalu River. He didn’t expect China to enter the war given that the Chinese Civil War had only ended in 1949. This proved to be a significant error. Chinese troops pushed U.N. forces south. However, around the 38° parallel, Peng wanted to consolidate his position and allow his troops to recover. Kim was furious, wanting a quick victory. Stalin was also reluctant to take the battle further south as this made the communists look like invaders. Thus, the advance slowed. Kim pressed to take more territory; Peng suggested that KPA troops were free to move south but without Chinese support. Finally, irritated with Kim, Peng tore into the Korean leader.
In the past, you said that the US would never send troops. You never thought about what you would do if they did send troops. Now you say that the American army will definitely withdraw from Korea, but you are not considering what to do if the American army doesn’t withdraw. You are just hoping for a quick victory and are not making concrete preparations, and this is only going to prolong the war. You are hoping to end this war based on luck. You are gambling with the fate of the people, and that’s only going to lead this war to disaster. To reorganize and re-supply, the Volunteer Army needs two months, not one day less, maybe even three [months]. Without considerable preparation, not one division can advance south. I resolutely oppose this mistake you are making in misunderstanding the enemy. If you think I am not doing my job well, you can fire me, court marshal me, or even kill me.
When Stalin heard of the conflict, he sent his support to Peng, calling him a “military genius” and indicated that the CVA, with inferior military equipment, had defeated well-armed U.N. forces.
Next week, we will discuss the final phase of the Korean War, the ceasefire, the introduction of Juche and the Cultural Revolution.
October 16, 2017
This report was prepared by Bill O’Grady of Confluence Investment Management LLC and reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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 Carter was worried about being seen as weak by GOP critics. Creekmore, M., Jr. (2006). A Moment of Crisis: Jimmy Carter, The Power of a Peacemaker, and North Korea’s Nuclear Ambitions (chapter 7). New York, NY: Perseus Books Group.
 http://www.38north.org/2017/09/jperson092617/ This report borrows heavily from Mr. Person’s analysis and his reference material.
 For an account of the Minsaengdan Incident, see Chapter 2 in J.J. Suh’s ed. Han, H. (2013). Colonial Origins of Juche: The Minsaengdan Incident of the 1930s and the Birth of the North Korea-China Relationship (J.J. Suh, Ed.). In Origins of North Korea’s Juche: Colonialism, War, and Development (pp. 33-62). Lanham, MD: Lexington Books. Op. cit., Person, footnotes.
 Zhihua, S. (2004.) Sino-North Korean Conflict and its Resolution during the Korean War. Cold War International History Project Bulletin, Winter/Spring (Issue 14/15), pp. 9-24.
 In January 1950, Secretary of State Acheson declared a defensive containment line against communism in Asia that didn’t include the Korean Peninsula. See: https://www.cia.gov/library/center-for-the-study-of-intelligence/csi-publications/csi-studies/studies/fall_winter_2001/article06.html
 Op. cit., Zhihua, page 9.
 Ibid, page 9.
 Ibid, page 9.
 Ibid, page 9.
 In China, the second in command of the Standing Committee of the Politburo is called the “premier.” It is roughly equivalent to the vice president. See: http://www.confluenceinvestment.com/wp-content/uploads/weekly_geopolitical_report_10_2_2017.pdf
 Op. cit., Zhihua, page 10.
 Ibid, page 10.
 Ibid, page 11.
 Ibid, page 11.
 Ibid, page 11.
 Ibid, pp. 11-12.
 Ibid, page 12.
 Ibid, page 12.
 Ibid, page 15.
 Ibid, page 16.
 Ibid, page 16.
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