(1) The PRC-DPRK is far deeper and more extensive than many realize. Since the "restoration" of bilateral relations in 2000, the two economies have been increasingly integrated. As long as the Six-Party Talks process remains under control, China is unlikely to put heavy pressure on North Korea.
(2) Kim Jong Il is likely to adopt "the Beijing Consensus" with a North Korean twist, as indicated by his repeated comments on the importance of developing an economic model suited to "the specific conditions of the country." After a period of uncontrolled marketization, Pyongyang is trying to reassert state leadership and put economic growth on a more stable trajectory. North Korea has taken positive measures to ensure commercial viability for outside investors and increased economic engagement with China, South Korea, and Russia.
(3) Pyongyang's move last fall to revitalize the public distribution system is not a "U-turn" in economic policy but rather an ineffective attempt to bring back workers to the formal sector. Due to limited domestic resources, however, only the infusion of external capital would provide a solution to the capital-labor coordination problem in the formal and informal sectors.
※ 코리아연구원은 기획재정부에서 공익성기부금대상단체(2006-176호)로 선정되었으므로 연말정산 때 소득공제를 받으실 수 있습니다.
20060214 KJI Southern Tour.doc
