CHINA'S KOREAN POLICY: FEW OPTIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00794R000100570001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 22, 2016
• Document Release Date: May 18, 2011
• Sequence Number: 1
• Publication Date: January 1, 1986
• Content Type: REPORT

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Directorate of -4o ^t
Few Options
China's Korean Policy:
An Intelligence Assessment
EA 86-10001
January 1986
COPY 19 0
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 Directorate of Secret
Few Options
China's Korean Policy:
This paper was prepared by
Office of East Asian Analysis.
Comments and queries are welcome and may be
directed to the Chief, China Division, OEAE
Secret
EA 86-10001
January 1986
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 China's Korean Policy:
Few Options 25X1
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Scope Note This paper is an analysis of China's current policy toward the Koreas based
on embassy reporting, our assessment of Chinese and North Korean
propaganda and official statements
information can be considered comprehensive. Both the Chinese and the
North Korean media are extremely circumspect when dealing with
bilateral issues;
As a result, al-
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though the judgments in this paper result from a careful weighing of the
available evidence, they must be considered tentative.F__1 25X1
Secret
EA 86-10001
January 1986
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China's Korean Policy:
Few Options F___] 25X1
Key Judgments China has had the same key objective on the Korean Peninsula for many
Information available years-avoiding a military crisis that could bring it into conflict with the
as of 4 December 1985 United States and Japan, to whom the Chinese look for essential strategic
was used in this report.
and economic assistance in their modernization program. Curbing Soviet
influence in P'yongyang is another major concern. The new element in
China's Korean policy is the strengthening of economic ties to South
Korea, which Beijing sees as both a potential market for Chinese goods and
a source of technology.
China's relations with North Korea are strained, and, more important,
Beijing sees itself losing ground to Moscow. We believe China's expanding
ties to the West in general, and the United States especially, are the
principal reasons for the downturn.
China's dealings with South Korea are expanding
Trade, largely
through third parties, now exceeds both Chinese-North Korean trade and
South Korean-Taiwanese trade. There have been increasing political
contacts, mostly at international conferences and sporting events, but
China steadfastly refuses any official or quasiofficial ties, to avoid further
alienation of the North.
China wants to regain some of the influence in North Korea-always
limited in our judgment-it has lost to the Soviet Union, but it is poorly po-
sitioned to compete now. It cannot match the military assistance Moscow
can provide, nor can Beijing significantly increase its economic aid, given
the demands of its own modernization program. We believe that Beijing
has little choice but to continue to pursue a mix of its present policies:
? Reassure the North through high-level visits and propaganda support for
key North Korean goals, such as a US troop withdrawal and a cohost role
for the 1988 Olympics, that China is sensitive to its interests. We believe
Beijing will also stress privately that its good relations with Washington
make it a more effective lobbyist on P'yongyang's behalf.
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? Push the North to expand its economic and political contacts with the
West.
? Encourage talks between the North and South and press the United
States to open a dialogue with the North. Beijing will continue to resist
quadrapartite talks and push tripartite talks (P'yongyang, Washington,
and Seoul), in part because this is what the North wants. Beijing also
fears getting trapped in discussions that would force it to side with the
North, invest its prestige in a process over which it has limited control
and might end badly, and inject a new contentious element into its
relations with Washington.
Because Beijing has little influence at present in either P'yongyang or
Seoul, its interests on the Peninsula are hostage to the actions of the key
players there. Particularly disturbing to the Chinese, we believe, is the
thought that for now at least they must count on P'yongyang's stubborn in-
dependence and Moscow's wariness of the North's intentions to curb the
growth of Soviet influence.
We believe China sees the United States as holding the key to recapturing
some of its lost influence in P'yongyang. In our judgment, Beijing believes
that, if it can get Washington and Tokyo to expand contacts with
P'yongyang, it can defuse the North's suspicions and offset Soviet material
assistance.
China's Korean policy will face major challenges if the North-South talks
collapse, Soviet-North Korean military cooperation continues to expand,
or there is serious instability in either the North or the South. In each in-
stance, Beijing's initial reaction is likely to be a combination of counseling
restraint with the North and pressing Washington harder to show some
flexibility toward P'yongyang.
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A Key Judgments
China's Aims 1
P'yongyang-The Problem 1
Sources of Strain 1
Economic Imperative
Limitations 6
Preserving Interests
Hostage to Others 8
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Figure 1. In hetter times. Party General Secre-
tan, I/u Yaobang, flanked by Military Commis-
sion Vice Chairman Yang Shangkun, with Kim
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China's Korean Policy:
Few Options~-]
China's key objective on the Korean Peninsula has
remained relatively constant for many years-to
avoid a military crisis that would force China to side
with the North against the United States and Japan,
to whom the Chinese look for critical strategic and
economic assistance in their modernization drive.
A second and closely related concern is to check
Soviet influence. In our judgment, the Chinese are
deeply concerned about another "Vietnam" on their
northeastern frontier: that is, a hostile country that is
dependent upon and aligned with Moscow. Indeed,
judging from Chinese actions in East Asia, we think
the Chinese have long wanted, for power and prestige,
to be regarded by Washington and Tokyo as a key
factor in preserving stability on the Peninsula and as a
bulwark against Soviet penetration.
The new element in China's Korean policy is an
outgrowth of its own economic reform program. As
China has pursued modernization, it has become
increasingly interested in developing economic ties to
South Korea. We believe, on the basis of Chinese
media commentary , that Beijing
sees the South's burgeoning economy as an important
market for Chinese exports, and as a source of
technology and investment capital. A secondary goal
is to influence Seoul's policy toward Taiwan and
broader regional issues.
P'yongyang-The Problem
Sources of Strain
China's opening to the outside world under Deng
Xiaoping has left its longstanding alliance with North
P'yongyang's behalf.
Korea as an anomaly. Aggressive, isolationist, anti-
US, P'yongyang espouses a world view fundamentally
at odds with Beijing's domestic and foreign policies.
Given Beijing's role in brokering North Korean reuni-
fication initiatives since the late 1970s, we believe
Beijing probably has tried to contain tensions and
suspicions by telling P'yongyang that China's opening
to Washington would further North Korean goals,
specifically by improving Beijing's ability to lobby on
We believe, however, that North Korea's doubts
about China have increased. Specifically, China's
willingness to establish closer ties to the United
States, particularly military links, and to quietly
expand trade and unofficial contacts with Seoul-
without delivering the dialogue P'yongyang desires
with the United States-have probably heightened
North Korean concerns about whether China can be
counted on to help secure its goals, and about whether
Beijing might even sacrifice the North's interests in
the pursuit of its own strategic and economic objec-
tives. We see P'yongyang's warming relations with
Moscow, in part, as a manifestation of this concern.
Given the importance to Beijing of maintaining its
influence in P'yongyang, the turn to Moscow, in our
judgment, represents a major setback for China. We
believe Chinese policymakers miscalculated how
sharply P'yongyang would react to China's dual-track
policy. The Chinese probably were caught offguard by
Moscow's decision to go along with P'yongyang's
Although they continue to tell US officials otherwise,
we believe the Chinese are especially disturbed by the
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China's Relations With North Korea in
Historical Perspective
Since 1979, Beijing's relations with Pyongyang have
fared inversely to the ups and downs of US-Chinese
relations. Both sides appeared willing to mute differ-
ences, especially regarding Beijing's dismantling of
the Maoist legacy and its break with the orthodox
socialist development model, during periods of ten-
sion between Beijing and Washington, but relations
have tended to sour when US-Chinese relations have
improved.
Sino-North Korean ties were especially strained fol-
lowing the visits of Deng Xiaoping and Hua Guofeng
to North Korea in 1978 just as the Chinese pro-
claimed their policy of a united front with the United
States, Japan, and Western Europe against the Soviet
Union. Beijing and Pyongyang differed,
over China's ties to the United
States and its invasion of Vietnam. Other bilateral
irritants include Beijing's unwillingness to provide
greater military aid, to reschedule North Korean
debt, to provide more oil, and to recognize Kim Il-
song's son, Kim Chong-il, as the legitimate North
Korean successor. At the same time, Beijing-which
was preoccupied with the Vietnam crisis-sought to
maintain a floor under Sino-North Korean relations,
in part by pressing Washington to be more flexible
toward the North and to withdraw its troops from the
South.
As US-Chinese relations deteriorated in 1981 over
policy toward Taiwan, Beijing made new overtures to
P'yongyang and the two countries moved closer to-
get her.
Chinese and North Korean leaders made a series of
important, high-level visits over the next two years.
In spring 1982, Deng and then party Chairman Hu
Yaobang made an unpublicized trip to Pyongyang,
which Kim 11-song reciprocated with a visit to Beijing
after the 12th Party Congress in September. Perhaps
most important, in early June 1983 Kim Chong-il, in
Beijing, was accorded a full leadership turnout,
including the entire Secretariat and as many as 14
members of the Politburo-a sure sign that the
leadership had decided to remove another impedi-
ment to better relations by recognizing him as Kim Il-
song's successor.
The Chinese invitation of US Secretary of Defense
Weinberger to Beijing in September 1983 and the
Chinese decision to work for improved ties to the
United States initiated another period of tense rela-
tions. Chinese leaders have continued their efforts to
broker North Korean "peace initiatives" during this
period in part to retain some hold over Pyongyang.
During their meeting in late September, Deng Xiao-
ping passed along a North Korean proposal to hold
tripartite talks involving the United States, and
North and South Korea, with China playing an
unspecified role on the sidelines. The North Korean
bombing in Rangoon, which came on the day after
Pyongyang asked Beijing to pass on its proposal for
tripartite talks to the United States, both embar-
rassed and angered the Chinese. China's subsequent
public condemnation of North Korean "acts of terror-
ism, " US and South Korean rejection of the terms of
the North Korean proposal, and Beijing's growing
indirect trade and political contacts all led to P'yong-
yang's renewed overtures to the Soviet Union for
military aid and support.
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Figure 2. The propriety oj'Kim
Chong-il's succeeding hisfa-
ther, Kim 11-song, as leader of
North Korea concerned Beijing
until June 1983, when virtually
the entire Chinese leadership
turned out to greet the younger
Kim in Beijing.F_~
North's decision to expand its military relationship
with the Soviets. The delivery in 1985 of almost a full
regiment of MIG-23s, the port call by Soviet naval
vessels this August, and-perhaps most alarming for
Beijing-P'yongyang's decision to permit Soviet re-
connaissance aircraft to overfly North Korean air-
space to collect intelligence against China ' probably
create fears that P'yongyang might eventually give
the Soviets regular access to North Korean air and
naval facilities just as Vietnam has-in exchange
for increased military and economic assistance.
P'yongyang's support of Soviet foreign policy posi-
tions that run counter to Chinese interests has also
angered Beijing. According to the US Embassy in
Moscow, Chinese officials there noted with dismay
North Korean Foreign Minister Kim Yongnam's en-
dorsement of Vietnam's peace proposals during his
visit to the USSR last May. The North also has
endorsed Moscow's call for "socialist unity" in the
face of "imperialist aggression" in East Asia-a call
Beijing pointedly rejected more than two years ago,
Equally important,
the North has often questioned the ideological basis of
China's modernization program, which reflects just
how far the two have drifted apart both strategically
and ideologically. P'yongyang underlined this notion
last July when Kim 11-song noted that, although
North Korea wants to build up its economy through
increased contacts with the outside world, North
Korea would "never" introduce foreign capital and
risk becoming a "subjugated" economy like China.
Although relations are strained, the Chinese have not
given up on the North Koreans. Indeed, they have
sought to mollify them in the hope of retaining
influence in P'yongyang. They repeatedly endorse the
North's reunification proposal, for example, by pub-
licly backing its bid to cohost the 1988 Olympics and 25X1
by calling for the withdrawal of US forces from South
Korea, and request that the United States cut back or
suspend the joint US-South Korean Team Spirit
Exercise. Moreover, by sending Vice Premier Li Peng,
Zhao Ziyang's probable successor, in October 1985 to
attend the anniversary of China's entry into the
Korean war, the Chinese are underscoring the impor-
tance they attach to developing close ties between
China's successor generation and the North's.
Limited Leverage
As tensions have grown in Sino-North Korean rela-
tions, Chinese ability to influence decisionmaking in
P'yongyang-which we believe was always limited-
has, in our judgment, declined. US Embassy reporting
from Beijing leads us to believe Beijing's modest
economic and military aid to P'yongyang is insuffi-
cient to create the leverage to alter P'yongyang's
policy direction. Moreover, China does not have the 25X1
resources-or the inclination, given the North's poor
record of repayment-to meet once again the North's
pressing need for credits, investment, and, to a lesser
extent, oil. Nor can it compete with the Soviets in
supplying military technology, as a Chinese specialist
on the Koreas recently acknowledged to US officials.
Economic Imperative
If political considerations are driving China's rela-
tions with the North, economic interest is the force
behind China's expanding contacts with the South.
Indirect trade-handled mainly through Hong Kong
and Japan-grew rapidly in the second half of 1984
and the first three months of 1985 before Beijing
clamped down on all trade to slow the hemorrhaging
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The Korean states have predictably irreconcilable
goals regarding China. Pyongyang wants to inhibit
South Korean contacts with China and the Soviet
Union while expanding economic relations with Japan
and political contacts with the United States. Seoul
seeks to expand economic relations with Beijing and
use the 1988 Olympic award to increase at least
cultural exchanges with the Soviets, while warning
both Washington and Tokyo to keep their distance
from Pyongyang.
Operating within its own triangle, North Korea plays
Moscow and Beijing off against one another, but
taking care, in our judgment, to avoid unnecessarily
or permanently antagonizing either of its giant neigh-
bors. Regarding China in particular, we believe
Pyongyang takes seriously shared sacrifices during
the Korean war, basks in Chinese praise for the
North Korean system, and relies on Chinese support
for North Korean security policies.
North Korea's complex relationship with China is
reflected in its ambiguous attitude toward improved
US-Chinese relations. Pyongyang, in our judgment,
worries that Beijing privately favors retention of US
troops in South Korea to counter the Soviet military
buildup in Asia. The North wants Beijing to make
withdrawal of US forces in South Korea a condition
for better ties to Washington, just as China has made
Soviet troops in Afghanistan and along the Sino-
Soviet border obstacles to improved Sino-Soviet rela-
At the same time, Pyongyang recognizes that it could
benefit from the Beijing-Washington relationship,
and we believe the North continues to press China to
argue its case. Although probably unhappy with the
results to date, Pyongyang has not entirely given up
hope that Sino-US ties can be exploited. Over the last
year, for instance, the North Koreans have passed a
series of messages via Chinese foreign ministry offi-
cials to the US Embassy in Beijing concerning the
North-South Korean dialogue and Pyongyang's pro-
posal for tripartite US-North Korean-South Korean
talks.
Seoul, of course, hopes to use its expanding economic
ties to China as a lever for eventual diplomatic
relations. South Korean expectations in this regard
seem exaggerated. Seoul lacks Pyongyang's ability
to play off rival Soviet and Chinese suitors. Beijing
has consistently turned aside all attempts to establish
an official or quasi-official political relationship, and
will continue to do so because of the need to protect
Beijing's credibility in Pyongyang.
Seoul, too, probably has mixed feelings about US-
Chinese ties. Fearing secret deals, the South is
capable of seeing the worst in normal contacts. At the
same time, Seoul believes good US-Chinese relations
reduce North Korean options on the Peninsula.
tions.
in its foreign exchange holdings (see chart). Even so,
trade between the two had already exceeded $500
million in August, and some South Korean business-
men predict it could reach $1 billion in 1985-more
than double China's trade with North Korea. The
Chinese no longer try very hard to mask this trade.
China's English-language newspaper, China Daily,
for example, published a prominent advertisement for
Samsung, a South Korean electronics conglomerate,
last May. Beijing, moreover, now permits South Kore-
an businessmen to travel in China, to confer directly
with Chinese officials, and to form joint ventures with
Chinese firms-although the Chinese still generally
require the South Koreans to use a subsidiary outside
of South Korea. The Korean firm Daewoo, for exam-
has formed a joint venture with a Hong Kong middle-
man and a Fujian provincial enterprise to build
refrigerator and television assembly lines in Fuzhou,
according to the US Consulate in Hong Kong.
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Figure 3. This advertisement
placed in the 30 May 1985 Chi-
na Daily by the South Korean
conglomerate Samsung sym-
bolizes the rapid growth in
China's trade with South Ko-
rea. Samsung, Daewon, and
Lucky Star are all pursuing
Beijing's search for development models and its need
for medium-level technology and export markets part-
ly explain these developments. Chinese economic
planners began studying the South Korean develop-
ment experience in the late 1970s, after Chinese
leaders committed themselves to economic modern-
ization at the landmark Third Plenum in 1978. Ac-
cording to our analysis, the Chinese media continue to
follow trends in the South Korean economy with great
interest.
Political Considerations
Beijing probably also sees some potential political
return from its expanding economic contacts. Over
the longer run, Beijing probably hopes it can under-
mine Taipei's relations with Seoul by building strong
trade ties to South Korea-the only country in Asia
that still recognizes Taiwan. Indeed, Sino-South Ko-
rean trade through August 1985 already exceeds the
total value of Taiwan's trade with the South in 1984,
$475 million (see the chart).
Translating economic ties into political leverage is
another matter, but unofficial contacts are increasing.
Chinese and South Korean citizens now routinely
attend international conferences and sporting events
in each other's country. China also has opened direct
mail and telephone links to Seoul and allowed family
reunion visits between South Korea and Heilongjiang
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Figure 4
China's and Taiwan's Trade With
the Koreas, 1979-85
I I I I I I I
0 1979 80 81 82 83 84 85'
Province, which has a large Korean minority popula-
tion-something that must displease P'yongyang.
Crises of one sort or another have propelled the
relationship forward. The hijacking of a Chinese
airliner to Seoul in May 1983 produced the first face-
to-face negotiations between the two countries with-
out a third country present, and similiar incidents
since have been resolved in a businesslike manner.
Limitations
The obvious interest on both sides notwithstanding,
we believe Chinese-South Korean political contacts
probably will not progress much further. The impor-
tance to Beijing of maintaining what leverage it has
with the North-particularly when Moscow is gaining
ground there-effectively gives P'yongyang a veto
over political ties. Moreover, Beijing's strategic as-
sessment of the Peninsula is unlikely to change: the
recognition that tensions there would undercut key
policies elsewhere makes mollifying P'yongyang high
on Beijing's list of priorities. Some expansion of South
Korean-Chinese political contacts may be possible as
a follow-on to expanded North-South contacts or
US-North Korean contacts. China has more room to
maneuver on economic relations, if only because so
much of the trade goes through third parties.
Few Options
With limitations on how far it can go with Seoul and a
cooling relationship with P'yongyang, Beijing, in our
judgment, has little choice but to continue to pursue a
mix of its present policies. Specifically, over the next
year, we expect China to attempt to regain some of
the ground it has lost in North Korea by continuing
to:
? Reassure the North. Beijing can be expected to
expend considerable energy in the form of high-level
visits attempting to convince P'yongyang of the
wisdom of its opening to the West and China's
sensitivity to North Korea's interests. Party General
Secretary Hu Yaobang consults with senior North
Korean leaders regularly, and he personally oversees
China's Korean policy. We believe Beijing has been
careful to brief the North Koreans on the substance,
if not the details, of each round of talks with senior
US officials, and we expect this to continue. The
Chinese will also continue to call for US troop
withdrawals and give propaganda support on issues
of concern to the North.
? Push the Open Door. The Chinese keep trying to
convince P'yongyang of the merits of pursuing an
open-door policy similar to their own. They take
visiting senior North Korean officials, such as Pre-
mier Kang in 1984, to the model Shenzhen Special
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have given broad and enthusiastic coverage to the
talks and to other North-South efforts at reconcilia-
tion, such as the recent family reunification visits.
Figure 5. Chinese and South Korean basketball
teams competing in the 9th Asian Games, New
Delhi, 2 December 1982.F__~
Economic Zone, and encourage them to seek West-
ern investment. The joint-venture law P'yongyang
adopted soon after indicates the Chinese may be
having some success in this area.
? Broker Talks. We believe the Chinese are encourag-
ing P'yongyang to continue-and even expand-its
talks with Seoul in the hope that talks will keep
tensions on the Peninsula manageable. Circumstan-
tial evidence suggests that Chinese leaders urged
Kim 11-song to reopen the economic and the sus-
pended Red Cross talks when he visited Beijing in
November 1984. The Chinese media, moreover,
The talks present some problems for Beijing. It has
resisted direct involvement-which South Korea
and the United States have sought-and pushed
tripartite discussions (North Korea, the United
States, and South Korea), almost certainly because
this is the way the North wants it. Moreover,
comments by Chinese officials lead us to conclude
that the Chinese apparently fear that if they joined
such talks they would become locked into siding
with the North, invest some of their prestige in a
process over which they would have limited control
and that might end badly, and inject a new conten-
tious element into their relationship with the United
States.
? Limit Ties to the South. Beijing has consistently
turned a deaf ear to South Korean requests for a
more official relationship including trade offices,
and, in our judgment, can be expected to continue
this course. In particular, all cross-recognition
schemes are unacceptable to the North and thus to
Beijing. Contacts at international gatherings will
continue-Beijing has already stated it will partici-
pate in the 1986 Asian Games in Seoul and the
1988 Olympics-and the Hong Kong channel exists
for private communications on such issues as hijack-
ings. Trade will probably continue to grow, but most
will continue to flow indirectly between the two
countries via Hong Kong and Japan.
Two other possible options-significantly increasing
aid to the North or terminating all economic or
political contacts with the South-are clearly not in
the cards. Enmeshed in its own modernization pro-
gram, Beijing cannot afford to significantly increase
its contribution to P'yongyang, nor can it compete
with the Soviets in offering sophisticated military
hardware, such as MIG-23s. We also believe that
China is unlikely to cut back at a time when it is
attempting to expand its markets and gain access to
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intermediate-level technology. Beijing may also calcu-
late that a cooling in its relations with Seoul would
restore relatively little warmth in its relations with
P'yongyang.
Hostage to Others
For now, the Chinese have been largely relegated to
advising from the sidelines, and indeed, to a larger
degree, Chinese strategic interests on the Peninsula
are, in our view, hostage to the actions of the other
key players. The Chinese appear to have little direct
influence, for example, over whether the North de-
cides to continue talks with the South or reverts to a
more aggressive approach. The North even recently
used the Soviets, instead of the Chinese, to convey a
message requesting US participation in tripartite
talks. Beijing can do little to influence the various
North-South talks and can only hope that they evolve
in a way that contributes to more lasting stability on
the Peninsula-and that the Soviet Union and United
States do not take steps there that exacerbate tensions
or further weaken China's ability to play a larger role.
Particularly disturbing to the Chinese, we believe, is
the thought that, for now at least, they must count on
P'yongyang's stubborn independence and Soviet wari-
ness of the North's intentions to limit the growth of
Moscow's influence.
We believe the Chinese see Washington as holding
the key to their chances of regaining lost ground in
P'yongyang
As an inducement to Washington, the Chinese have
hinted at the possibility of greater official contact
with Seoul in exchange. Vague quid pro quos aside,
we expect China to continue pressing the United
States and Japan to adopt more flexible policies
toward North Korea and to urge the United States to
reconsider participating in tripartite talks, especially
if the North-South talks make progress. Beijing is
likely to vent some of its frustration and irritation at
Washington and Tokyo in the process.
Potential Setbacks
China's Korean policy could face major setbacks in
the coming months. Any one of three broad develop-
ments would tend to underscore Beijing's relative
inability to shape events on the Peninsula and prompt
the Chinese to press Washington harder to show more
flexibility toward the North.
The North-South Talks Collapse. This would intensi-
fy Beijing's concern about stability, especially if the
North appeared intent on reverting to a policy of
trying to subvert the South. Beijing would have little
recourse but to urge P'yongyang to display restraint
and return to the negotiating table. To mollify the
North, China might curtail trade and other contacts
with the South temporarily; at a minimum, it proba-
bly would try harder to mask them. The Chinese
probably would also blame Washington for failing to
provide more support and show greater flexibility, and
press for US concessions to the North and pressure on
the South.
Soviet-North Korean Military Cooperation Increases
Faster Than Expected. Beijing would be deeply dis-
turbed by such a development-especially if the
North granted the Soviets some basing rights in
exchange for more arms. At a minimum, the Chinese
probably would express their concerns privately to
P'yongyang, but they are not in a position to compete
with the Soviets in providing weaponry. They could
try to curry favor by becoming more cautious in
handling both trade with the South and military
relations with the United States. But the Chinese
could just as easily decide to signal their displeasure
by becoming less responsive to new requests by the
North for aid or oil. We suspect that China's recent
decision to eliminate the North as a middleman for
arms sales to Iran-a major foreign exchange earner
for P'yongyang-may have been meant in part as
such a signal. The Chinese also could decide to do
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even less to mask their contacts with the South to
generate some counterleverage with P'yongyang. We
suspect they would be very reluctant, however, to cut
off all aid to the North, as they did to Vietnam, for
fear of losing any chance of healing the breach later.
in P'yongyang.
Instability in the North or South. If a crisis occurred
over the succession in P'yongyang, Beijing probably
could do little to influence the actual outcome and
probably would be limited to wooing winners in hopes
of rebuilding China's standing. China might press the
United States to be more forthcoming-either in
contacts with the North or by lowering its profile in
the South, such as in the Team Spirit Exercise-
arguing that such actions would help the "moderates"
There is little, on the other hand, that China could do
in the event of severe political turmoil in South Korea,
although China probably would urge the North to act
with restraint
The Chinese would certainly
press Washington to exert a stabilizing influence in a
crisis.
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