East Asia
The need for, and apparent efficacy of, American diplomacy was on full display this past week in East Asia, as America's new Secretary of State, John Kerry, dropped in on the new political leaders in Seoul, Beijing and Tokyo. This is to be followed by visits to Beijing this week by General Martin Dempsey , chairman of the joint chiefs of staff, and in May by Thomas Donilon, President Obama's national security adviser.
As it turned out, the timing of Mr. Kerry's visit, planned months ago, was auspicious, coming just as North Korea's 29-year-old leader, Kim Jong Un, was once again ratcheting up the essence of North Korea's own brand of diplomacy - belligerence and bluster. This latest round of threats, including war and nuclear annihilation, has been especially shrill, beginning last December, when the regime launched a rocket, then continuing, first in February when it conducted its third test of a nuclear device, and subsequently in March, when it declared the 1953 armistice that ended the Korean war nullified.
China's new leaders, who will no doubt continue to regard the North Korean state as an essential buffer, have nonetheless responded this time somewhat differently. Thus, China supported UN Security Council resolutions in January and February tightening sanctions against North Korea, and in March reaffirmed its commitment to the Korean armistice - to which it was an original signatory. But the compelling evidence that China's interest lies in preventing armed conflict in the Korean peninsula comes not just from its political and diplomatic initiatives, but how it continues to invest its international reserves (quick primer: at nearly $3.5 trillion, China's international reserves are easily the largest in the world. Reserves, held as assets by a country's central bank, are regarded as savings to be invested, but kept readily available in the event of a balance of payments crisis, which in turn often precipitates a run on a country's currency). Thus, China has been increasing its investments of reserves in South Korean financial markets: as, already, the third-largest holder of South Korean bonds (after the U.S. and Luxembourg), it increased these holdings by 6.5% between the end of 2012 and the end of March (the same period that Mr. Kim was becoming especially unhinged). Similarly, Chinese investments in South Korean stocks jumped 30%.
Such activity amounts to a substantial vested interest by the Chinese in South Korean and regional stability. Couple this with President Obama's "pivot" of America's military focus to Asia, together with its treaty obligations to defend South Korea and Japan, and it becomes difficult to imagine China allowing Mr. Kim - whose behavior is now likely well beyond what China wished for - to do much more than bluster. A shame, though, that, while the geopolitics play out, ordinary North Koreans are forced to continue their miserable - even desperate - existence. Only de-nuclearization, and re-unification, of the Korean peninsula can change this.