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China-Japan-Koreas
China freezes out Pyongyang
2006-07-25
::crackle crackle:: "Kim? Kim? I'm sorry, I must be in a bad cell." ::crackle crackle:: "And now we're going into a tunn..."
CHINA'S relationship with its former satellite North Korea is unravelling fast, underlined by reports yesterday that the People's Bank of China has frozen all North Korea's accounts. South Korean parliamentarian Park Jin said he had learned on a visit to Washington that through its action the Chinese central bank had responded to persistent North Korean counterfeiting of its currency, the yuan. A spokesman for the People's Bank of China yesterday declined to deny Mr Park's claim, saying, however, that the bank had not yet issued a statement confirming the claim.

Mr Park's account helps explain why China did not respond directly to the US's imposition of sanctions on Banco Delta Asia in Macau, a Chinese special administrative region. Washington, which froze $32million worth of accounts at the bank, accused North Korea of circulating counterfeit US dollars printed in North Korea, which has long used Macau as its principal international financial contact point. Indeed, Mr Park said China was working alongside the US to track and smash North Korea's counterfeiting operations.

It is 10 days since the UN Security Council unanimously passed resolution 1695 -- drafted chiefly by China -- responding to North Korea's launch of seven missiles by blocking the shipment of materials Pyongyang might use for the construction of missiles or nuclear weapons, demanding that it suspend its missile program and urging that it return without pre-conditions to the six-party talks -- with China, the US, South Korea, Russia and Japan.
Posted by:Fred

#25  Mitch H. - I'll bet my next paycheck that the Chinese have had "agents" in place for the last 10 years to pull off a palace coup on command.

Triangulation, duplicity, and long-range planning. It's the Chinese way. :)
Posted by: cruiser   2006-07-25 20:20  

#24  And now we're going into a tunn

Cheap! Cheap! Ha ha ha hee
Posted by: 6   2006-07-25 19:06  

#23  mhw: Oddly enough one of the trump cards that Dear Leader has is that if the Chinese oust him, it will be interpreted throughout the world as a US victory.

China does not want to giv the US such a victory and so China ends up screwing itself.

Kind of amusing actually.

I'm afraid you've lost me here. Invading North Korea will be a costly proposition in men (very significant in an era of compulsory one-child families and no welfare state, and high casualties potentially a regime-ending threat) and money. It will make East Asian countries (most of which think of North Korea as a problem primarily for the US) a lot more suspicious of China. North Korea might nuke Beijing in response to an invasion. South Korea might intervene, making a Chinese defeat likely. China can't use nukes against South Korea, because of Uncle Sam's nuclear umbrella. These are just some of the possible risks and costs to China of an invasion.

The benefit is that North Korea stops printing Chinese currency. I fail to see how this is a good trade-off for China, whatever the benefits to the US.
Posted by: Zhang Fei   2006-07-25 18:43  

#22  Sure, there's a lot of counterfeit money in China. You check every 100 and 50 Yuan note that you take. Shopkeepers certainly do!

The latest counterfeit note that I saw actually had an ultraviolet reflective part. It wasn't clear like the real notes, but it would have passed a cursory inspection.
Posted by: gromky   2006-07-25 16:49  

#21  Just as likely the Chinese [correctly] assume that taking out the NKors will result in Japanese shifting into high gear to rearm. However, it won't stop the Chinese from 'inviting' [along with economic incentives] the Skors to occupy the area with any Chinese and remaining American troops departing by a verifiable schedule.
Posted by: Chager Chavirt3161   2006-07-25 15:50  

#20  Counterfeit Yuan is a big problem in China. When a was there a couple of years ago I remember my friend checking all the bills he would receive as change. Apparently most everybody checks regularly. I never did ask where the phoney money came from. I figured since China pirates everything else that it would be a home grown problem. But now that I think about it, if you were caught producing phoney money in China you would never be seen or heard from again. It would make sense that it comes from NKor.
Posted by: Intrinsicpilot   2006-07-25 15:29  

#19  Oddly enough one of the trump cards that Dear Leader has is that if the Chinese oust him, it will be interpreted throughout the world as a US victory.

China does not want to giv the US such a victory and so China ends up screwing itself.

Kind of amusing actually.
Posted by: mhw   2006-07-25 12:08  

#18  As far as food goes, they'll just play the starvin' orphans card to cover their military & elites, which is all they care about. The rest is a matter of hunkering down & smuggling, if my guess about the "greatest criminal gang in East Asia" thing is on the mark.

Remember last year, when the Chinese turned off the oil taps? Did the Chinese get much of anything from it? If they did, it wasn't obvious.
Posted by: Mitch H.   2006-07-25 10:19  

#17  Gee, maybe those bogus greenbacks weren't all that great an idea after all, huh?
Posted by: mojo   2006-07-25 10:08  

#16  How would they get the leverage to shift leadership *short* of an armed invasion and occupation of Pyongyang?"

I don't know if you're kidding or not. Without China supplying them energy, food, industrial goods, etc. they would fold in months. He might go out with a whimper, he might go out with a bang, but Kimmie has a pack of people, those guys with more medals than Georgy Zhukov for example, who would be happy to take over - so go out he would.
Posted by: cruiser   2006-07-25 09:34  

#15  Maybe the Chinks can 'buy' their trains back with a few bales of newly found yuans... Better yet, hire the Kimmie Krooks to print the money for China and cut their treasury overhead expenses.
Posted by: Inspector Clueso   2006-07-25 09:26  

#14  This yuan thing makes me wonder whether NKor is merging with the Chinese criminal undereconomy. I mean, it's essentially a legal free-fire zone, at a time when the mainland is trying, fitfully, to regularize its legal situation. Is North Korea getting colonized by Chinese criminal gangs, or is it moving to become the largest criminal enterprise in East Asia?

I can't imagine it coming to blows, but there might be some situation involving more rigorous Chinese policing of the border, and a cutting-off of oil deliveries. The stealing-trains thing is starting to come into focus, don't you think?

As for the Chinese trying to replace the NKor leadership with someone more malleable, since when has North Korea *ever* been that responsive to the wishes of their patrons? The Soviets found the Kims pretty intractable back in the day, and I've never seen any sign of the Chinese having any better luck. How would they get the leverage to shift leadership *short* of an armed invasion and occupation of Pyongyang?
Posted by: Mitch H.   2006-07-25 09:07  

#13  WC6430, the Chinese obsession with regaining their lost territories. They have done a pretty good job so far - Tibet, Xijiang, HK, etc. N Korea was a part of China in the past (as was the Russian Far East).
Posted by: phil_b   2006-07-25 08:55  

#12  They could take Kimmie out any time they want - and won't hesitate, when it serves.

And if the NKor threat disappeared tomarrow the Americans would be out of there at warp speed. Chinese financial assistance [which is doable] with some American bucks kicked in, should allow the SKors to gracefully absorb the North without a nightmare scenario. So the real question is - why do the Chinese want the Americans [even at reduced levels] to remain on the penisula?
Posted by: Whomogum Creremble6430   2006-07-25 08:48  

#11  Sounds to me like the Chinese just want their trains back.
Posted by: Spot   2006-07-25 08:36  

#10  Triangulation games. They could take Kimmie out any time they want - and won't hesitate, when it serves.
Posted by: cruiser   2006-07-25 07:35  

#9  I doubt China is inclined to put teeth into anything it does given NorK's "deterrent". It may, however, apologetically nibble at the edges to further destabilize Kimmy's peculiar brand of "government". That combined with other countries hitting him with harder sanctions can't help much.
Posted by: gorb   2006-07-25 05:01  

#8  gromky: The Chinese don't want to invade. That's wishful thinking.

I'll have to agree with that. They're very bottom line-oriented. Wars cost money. It's not like there's anything in North Korea they want that they're not currently getting, anyway. Plus, the South Korean reaction is something China has to think about. If China invades, and South Korea jumps in to defend the territorial integrity of the Korean motherland, then things could get expensive and bloody very, very fast. The South Koreans are cosying up to the Chinese because they see no risk in it - they have a free get-out-of-jail card from Uncle Sam. If China invades, my feeling is that South Korea will jump in to push the Chinese back. Left- and right-wing South Koreans are positively rabid about territorial issues. Don't expect them to stand back and watch China take North Korea.

Given the risks and the complete absence of any benefit, there's no reason for China to invade. If China wants Kim Jong-Il gone, it would be better off engineering a change of leadership, much like the Soviets did in the Warsaw Pact countries whenever they thought things were moving in the wrong direction.
Posted by: Zhang Fei   2006-07-25 04:56  

#7  I don't know about this. It may just be China acting like it's doing something when in reality it's not much of anything at all.
Posted by: Sock Puppet of Doom   2006-07-25 04:39  

#6  gromky: Counterfeiting the Yuan was a pretty dumb move, though. The highest denomination, 100, is only worth about $12. The value of the aid given by China is much greater than a few tons of 100 RMB notes. And besides, counterfeiting the Yuan is the job of Chinese gangs.

China is a lot closer to North Korea. North Koreans can enter China pretty much at will with either fake papers, or through the border (tens of thousands of North Korean refugees certainly have, many without even paying off North Korean border guards). The average North Korean is more likely to speak Chinese than he is to speak English. Plus, every Chinese province speaks its native language/dialect, so there is no native Mandarin accent. Meaning, of course, that a North Korean Mandarin accent would arouse no suspicion - i.e. North Koreans can pass for Chinese in China, based on both physical features and accent. All they have to say is that they're from some faraway province. Since all of China's provincial languages/dialects are mutually unintelligible anyway, no one could tell the North Koreans were foreign even if they were heard speaking Korean, since most people don't know what Korean sounds like. The Chinese national ID card is a real piece of crap that makes the fake documents you can get near Times Square in NYC look like veritable works of art. Bottom line, I think it would be way easier to launder counterfeit yuan than counterfeit dollars. China is mostly a cash economy, so large sums of cash don't arouse suspicion.
Posted by: Zhang Fei   2006-07-25 04:37  

#5  The Chinese don't want to invade. That's wishful thinking.

Counterfeiting the Yuan was a pretty dumb move, though. The highest denomination, 100, is only worth about $12. The value of the aid given by China is much greater than a few tons of 100 RMB notes. And besides, counterfeiting the Yuan is the job of Chinese gangs.
Posted by: gromky   2006-07-25 03:37  

#4  It's hard to believe the Norks are dumb enough to forge Yuan.

They (or Kimmies) are mad enough for this and more
Posted by: JFM   2006-07-25 02:08  

#3  It's hard to believe the Norks are dumb enough to forge Yuan.
Posted by: phil_b   2006-07-25 01:48  

#2  I am not sure the Chicoms will invade but it would be an intelligence godsend if they did. We have satellites over there, the Japanese do, and so do the Indians. Between the 3 of us, we should get some good signal intel, and lots of photos. Plus, the NorKors may be willing to share their "frustrations" with certain assets of the South Korean CIA. Hell, with the present leadership of South Korea, the NorKors might even try an appeal to Korean nationalism to beat back the Chicoms.
Posted by: Shieldwolf   2006-07-25 01:17  

#1  I wonder what the breaking point will be with China, before they finally get a major case of the ass and launch a punitive expedition on the Norks like they did to Vietnam (not that it worked.)

It would be a godsend to US intelligence, to see how the "new model Chinese army" would actually perform in real conditions.
Posted by: Anonymoose   2006-07-25 00:16  

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