The China factor

Hu Jintao's message of support, along with Kim Jong Il's two visits to China before the delegates' meeting, immediately lead to the question: What type of North Korea will China support? Clearly, the last thing China wants is for North Korea to collapse -- as that would create a serious dilemma for Beijing: Either it could either do nothing and watch the U.S. sphere of influence expand right to its border, or it could actively interfere. But interfering would instantly shatter China's copious efforts to present itself to other countries in the region as a peaceful giant that can offer a real alternative to protection by the United States. In the end, this is what North Korea is all about -- competition between Beijing and Washington. Pyongyang knows this.

A third path might be open to China. North Korea has realized that the economic reforms of 2002, which focused on agriculture and hence closely resembled China's early experiments in 1979, were in principle a good idea, but that conditions were so unlike those in China that the results inevitably differed -- indeed, North Korea's attempts were disastrous. Farmers saw their income grow, while the majority urban population (about 70 percent) faced rising prices. Inflation followed suit, and the just-narrowed gap between state and market prices expanded again. North Korea is much more heavily industrialized than 1970s China, and Pyongyang will accordingly need to focus on industrial reform above all else.

North Korea is not in a novel situation. It has intensely studied the one well-established blueprint in the region, the East Asian model of development. In short, it consists of a strong state that controls a few big players in the economy -- zaibatsu or keiretsu in Japan, chaebol in South Korea, and the state-owned companies in China. Success requires a huge source of finance, coupled with a strong political partner that, for a while, is willing to turn a blind eye on protectionism and provides a huge market for the newcomer's exports. The United States played that role for South Korea, and to a lesser extent for Japan. China seems now willing to provide this service for North Korea, under certain political conditions.

Since at least 2005, and more intensely since 2008, North Korea is returning to the path of orthodox socialism, or at least to its East Asian version. "Rule by the Party" -- a collective with a first among equals at the top -- is not only a key component of any socialist textbook case; it also defines the Chinese model since 1978. After two leaders of the Mao Zedong type, North Korea might now be getting ready for one that is more like China's Hu -- that is, a strong leader who rules as the head of a collective. With some luck, Kim Jong Un might even turn out to be a Deng Xiaoping -- a man who has the power and vision to use this post to initiate and execute crucial reforms. So maybe we should wish him well

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