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It’sallbs 2 years, 9 months ago.
US & East Asia Update
There are events in East Asia that were probably set in motion by US Administration after the visit of Premier Xi to Florida. Possibly with Premier Xi’s concurrence or at least with his knowledge and possible assurances by tRump on the levels of engagement.
In public tRump has pressed his China counterpart to do more to curb North Korea’s nuclear program. tRump’s national security aides have completed a review of U.S. options to try to curb North Korea’s nuclear and missile programs. These include economic and military measures but lean more toward sanctions and increased pressure on Beijing to rein in its reclusive neighbor.
The US National Security Council had recently presented Trump with three possibilities on North Korea, namely
– put American nuclear assets in South Korea
– kill Kim Jong-Un
– infiltrate North Korea to sabotage or take out key infrastructuretRump had told the FT in an interview, that “if China is not going to solve North Korea, we will.”
Immediately on the Premier’s return to China, the US Navel Task Force Carrier Group Carl Vinson (CVN 170) is headed for the Korean Peninsula. Having been resupplied and ‘visiting’ Singapore – the island nation is in league with Taiwan and is the only staunch US ally in the Southeast Asian region.
The CVN 170 strike group will operate in the Western Pacific rather than executing previously planned port visits to Australia, Pacific Command said. The group will remain under the operational control of the Third Fleet.
The inability to measure, or comprehensively understand, the North Korean leadership related to a nuclear threat, adds to an escalating amount of instability.
That volatile element is particularly concerning for trade, regional cooperation and any permanent solutions to the North Korean missile program.
This year North Korean officials, including leader Kim Jong Un, have repeatedly indicated an intercontinental ballistic missile test or something similar could be coming, possibly as soon as April 15, the 105th birthday of North Korea’s founding president and celebrated annually as “the Day of the Sun.”
At the end of March 2017, satellite images collected by 38 North suggested that North Korea was actively preparing for a nuclear test.
Although the option of pre-emptive military strikes on North Korea is not off the table, the NSC review prioritizes less-risky steps and de-emphasises direct military action.
Then again, nobody thought that tRump would launch a cruise missile strike against Syria less than a week after Rex Tillerson said Assad’s fate lies with his people and not some foreign aggressor.
In other words, as ZeroHedge predicted “…with Syria down, it’s now North Korea’s turn. Considering recent developments, Kim Jong-Un would be well advised to keep a lower profile for the next few weeks…. ”
However my view is quite different after having lived and worked in East Asia for long periods. The North Koreans and Chinese are not Syrians – culturally, economically and militarily. It would be wise for Trump to consider historical precedents with regard to Asia and who he is dealing with.
Firstly – the US has never won an engagement post-WWII in Asia.
The tactics used in training and in Iraq using large standing armies will be useless as seen in the prior Korean conflict and the Vietnam war. Winning is nothing more than achieving the objective with acceptable losses.
It is to be remembered that North and South Korea are direct consequences of the unsuccessful American Empire building attempts in Asia post-WWII.
Without prior US interference on the Korean Peninsula and its continuing presence in Japan – the political evolution of the North China region would have been very different.
The only reason for the continuing survival of the Pyongyang regime is purely as a buffer between China and the US forces in Japan. Without this perceived threat – China would have disabled the Pyongyang regime long ago. The US is trying to provide a presence to defend against a threat created by that very presence.
Asymmetric guerrilla warfare and small tactical engagements plus harassment of larger naval battles can stall and cost a large army beyond what it is willing to sacrifice.
Think of the 1900 at The Battle of Thermopylae and you get the idea. (No it was 1900 not 300 – there were 900 Thespians and 700 Helots who refused to leave King Leonidas but were never mentioned by the MSM of the time).
The days of the aircraft carrier as a strategic asset are over. Hypersonic land or ship launched anti-ship missiles have made them obsolete. Currently there are only three US carrier task forces in deployment – CVN 69, 70 & 77. If one such asset is crippled or destroyed then there is no replacement expected and the objective is lost.
Secondly – China is sitting right behind North Korea.
The Chinese military have shown in recent times tactical autonomy from their leaders in Beijing as noted in prior engagements in the South China Sea and the China-Indian Line of Control in Kashmir.
The United States currently has 15 military bases in South Korea. The U.S military has a force of 28,500 in South Korea with an adjacent force of around 49,000 in Japan. It is clear by an overall show force that the U.S government views the region as essential to national security interest.
If a US attack targetted the wrong assets or personnel then here is no knowing what action the People’s Liberation Army would take – the Communist Party notwithstanding. This is a very real possibility given the US military’s confusion in recent Middle-East engagements.
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http://www.lib.utexas.edu/maps/middle_east_and_asia/china_major_naval_units-2012.pngThirdly – there are no other East Asian countries supporting the US should an engagement eventuate.
The Philippines, Vietnam Malaysia Thailand are all part of a de-facto economic bloc with China and they know what can happen should China be weakened – therefore remaining neutral and not providing any military or other assistance. There is a strong collective memory of the Vietnam and Korean wars in East Asia.
http://static1.businessinsider.com/image/546b6d5c69bedd9c4e36ca02-1200-1200/personnel.pngNo East-Asian country (sans Japan) will join such a US-led intervention against China and any US losses will be just that – US losses. The island nation of Singapore has little to offer save as a port of call and a strategic choke point in the Straits of Malacca to curtail Chinese trade routes.
Japan again is not about to directly confront the Koreans or the Chinese. Both North and South Korea have an inherent hatred of the Japanese that transcends political boundaries.
The Chinese are awaiting any opportunity to get a crack at the Japanese as well. Someday the US will have to withdraw and Japan may well be the big loser of they do not play their hand well.
http://www.americasfreedomfighters.com/wp-content/uploads/2016/08/NORTH-KOREA-map.jpgThe fallout from such a hasty US-led intervention would only devastate the emerging economies of South East Asia and Japan and the badly needed US trade initiatives after TTIP was cancelled. tRump risks losing support from the very businesses that supported his ‘America-first’ policies.
China is obtaining oil and natural gas exports from the Russian Federation and soon will increase overland supplies on the New Silk Road – bypassing the Straits of Malacca completely. China is prepping hard for any and all contingencies.
Economic & trade partnerships – ASEAN and Greater China
https://amti.csis.org/wp-content/uploads/2014/11/tpp_rcep2.jpgBack to the issue of North Korea then.
A number of things may have been discussed between tRump and Premier Xi. The following the take of most reputable analysts on what may have occurred:
Top on the agenda would be North Korea. tRump would demand that China rein in its ally. However China is not in a position to pressure the North Koreans without risking their goodwill – and this is a real possibility.
The North Korean economy has one of the least open economic systems in the world. The country faces massive shortages, constant power outages and chronic food shortages. While the North Korean market is a non-factor, a vast majority of its export economy goes north across the border to China.
Beijing has made the dictatorship heavily dependent on its purchasing of coal from the North Korean regime. After the latest series of missiles launched from the North, China has officially declared a one year hiatus to this purchasing coal to show some solidarity with the UN on this matter.
However the US does not seem to understand that sanctions usually do not work as intended. Sanctions serve to further isolate a country – and as proven in the case of Russia – a country can adapt to such measures especially if alternate sources of commodities and energy can be resourced or if they are prepared to do without.
In effect sanctions only serves to make the targetted country independent from those imposing the sanctions and actually weaken these other countries trade-wise or in future negotiations having a poorer hand to bargain with.
China has already unleashed retaliatory trade practices against South Korea, going as far as having armed police being stationed in front of South Korean business stores located in cities throughout mainland China.
Sanctions in the short term may accelerate Pyongyang’s determination to present their solution to maintain legitimacy in the eyes of their people. This process of sanctions is self–defeating.
As Jim Rickards points out that if pushed too hard by China – Pyongyang may just open up its northern border and allow a few million starving North Koreans to Chinese Manchuria who are currently eating the bark off the trees. This will destabilise Northern China militarily and economically – at a high cost of regaining control of the area and dealing with the illegal immigrants.
All at a time when Beijing is trying to work with the IMF and UN to stabilise high levels of capital flight and control the depreciation of the renminbi. As China deals with a financial system on the brink of economic disaster while also having to manage territorial disputes in the South China Sea, North Korea could be a major catalyst for disaster.
China’s economy is not just about providing jobs, goods and services. It is about regime survival for a Chinese Communist Party that faces existential risk if it stumbles.
Given the systemic problems inherent in trying to run an economy in the absence of the accurate price signals only free markets provide (a problem for both Chinese socialism and the West’s corrupt crony markets), their challenges are worsening every day.
China’s historical pattern is to blow up in violent revolution and break into multiple warring states after they reach this apogee of expansion. The Chinese leadership is perfectly aware of this.
The US Commerce Department recently reported that U.S trade deficits with China have dropped sharply, showing that the connection between the two countries is gaining strength. The optimism in the politically sensitive trade deficit could show opportunity for markets, but with a dark cloud of North Korea — everything is in flux.
Jim Rickards reveals, “The problem is so long-standing and discouraging that markets have become complacent, as if North Korea were nothing more than background noise — annoying but ultimately harmless.”
“Nothing could be further from the truth.”
“Market volatility has been near all-time lows for an extended period. The situation in North Korea may be about to wake investors out of their slumber.” Jim Rickards leaves with definitive actions shooting out a warning that, “War is closer than investors realize. The time to move to gold, silver, cash and other hard assets and out of vulnerable equities is now — before the shooting starts.
Secondly it is a sure bet tRump asked Xi to stop the attempts at renminbi devaluation. However China ‘s trade position is governed by their peg of the renminbi to the US dollar, and this will have to be tackled by both countries to avoid a market collapse.
tRump branding China a currency manipulator is not going to help. I have written on China’s currency devaluation and bitcoin markets here and here. The newly opened bond market to stave off a currency crisis is discussed here
Chinese and North Korean leaders will understand that a U.S. attack on Syria sends a warning message to North Korea. North Korea will feel the need to display solidarity with the Syrian government, and the Chinese will be weighing their options.
Citations
http://www.zerohedge.com/news/2017-04-08/us-sends-aircraft-carrier-toward-north-korea-response-recent-provocations
https://dailyreckoning.com/w https://dailyreckoning.com/global-tensions-dangerously-increasing/hite-house-to-north-korea-the-clock-has-now-run-out/
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