NIKKEI ASIAN REVIEW
18-5-18

Is Kim a reformer? Leader looks to Vietnam and China for ideas

North Korea wants Trump Towers and McDonald's, says South Korea adviser

SOTARO SUZUKI, Nikkei staff writer, and TETSUSHI TAKAHASHI, Nikkei China bureau chief

SEOUL/BEIJING -- Hoping that the June 12 summit with the U.S. will help ease international sanctions, North Korean leader Kim Jong Un is drawing on Chinese and Vietnamese experience with introducing market forces into previously closed economies.

A North Korean delegation including Workers' Party of Korea Vice Chairman Pak Thae Song arrived in Beijing this week. The group has visited Zhongguancun, an area often dubbed China's Silicon Valley, and even met with President Xi Jinping on Wednesday. Kim likely wanted his key aide to learn more about China's economic opening up and reform.

Though known for bellicose rhetoric, Kim is also extremely interested in developing his country's economy.

He decided at a party meeting last month to take back his signature two-track policy on nuclear development and economic growth and announced a new focus on the economy.

Kim hopes to follow in the footsteps of China and Vietnam. China was first to start modernizing under leader Deng Xiaoping in 1978, who brought in large amounts of foreign money to boost productivity and revive an economy on the verge of collapse from the devastating policies of the Cultural Revolution.

Critics at the time accused Deng of bringing capitalism back to China. But he argued that as long as the Communist Party remained in charge, the nation would not stray from its socialist ideals. Xi threw his support behind a similar change in North Korea when meeting with Kim this month, hoping to expand Beijing's influence on the Korean Peninsula.

Meanwhile, Kim said at his April 27 summit with South Korean President Moon Jae-in that he aims for Vietnam-style reforms, the South's Maeil Business Newspaper reported. The Southeast Asian nation launched its Doi Moi campaign in 1986, paving the way for joining the World Trade Organization in 2007 and continued economic growth. Its reforms have also been modeled on the Chinese strategy.

The North Korean leader attended a boarding school in Switzerland, spending some of his formative years in a free economy. "Kim does not have personal qualms about capitalism," a South Korean diplomatic source said.

"They want Trump Tower" and McDonald's, South Korean presidential adviser Moon Chung-in told CNN after the North-South summit. Normalizing economic ties between the U.S. and North Korea would provide a "real guarantee" for the survival of the government in Pyongyang, he said.

"Kim has likely decided that economic reform and openness would be more helpful in protecting his regime than nuclear weapons," an expert on the North Korean economy said.

The North has high educational attainment and rich underground resources. Its economy could rack up consistent annual growth of 15% for at least a decade or two once it opens up, according to former South Korean Unification Minister Lee Jong-seok.

But Pyongyang has shied away from big changes that could destabilize the government, even while pursuing such special projects as the Kaesong joint industrial complex with Seoul and the Rason special economic zone near the Chinese border. More decisive action is needed if it hopes to emulate the success of China and Vietnam.