by Soon Kyu Choi
Hong Yeol Kim joined the Korean Economic Daily in 1995 and has been based in D.C. since 2008. He covers international affairs, industries, capital markets, and the Korean government. I interviewed him via telephone and email shortly after North Korea’s artillery attack of Yeonpyeong Island, South Korea on Tuesday, November 23.
What is the general atmosphere like amongst the citizens in Seoul? U.S. news coverage of the situation portrays a state of anxiety and crisis. However, do ordinary citizens view this as just another skirmish between the two countries or as something different?
South Koreans feel more threatened this time than at any other time in the past. As you know, civilians were wounded and attacked by direct shelling of the North Korean army. There has not been a direct attack on civilians since 1953. On top of that, the shelling happened on official territory, rather than on water. There has never been shelling on the territory on South Korea. They shot more than 100 shells on official South Korean territory. That is the biggest difference between this attack and past attacks. I think most Koreans feel it is an act of war against them as their families may need to be called to war. This is heightened even more so because there was media coverage of the shelling attacks and the younger generation has never witnessed this.
In the U.S., there is much discussion that a diplomatic solution to the tension on the peninsula is through China, at the bequest of the U.S.. Do you think China will, and can, play a role in moderating North Korea’s actions?
China should be playing a key role in resolving this situation with North Korea, but I don’t expect them to play a role at this time. They have always been reluctant to play a role at the request of the international community, particularly at the request of the U.S.. The Chinese government has asked that there should be restraints on both the South and North from acting. Yet, they always say they want a peaceful situation on the Korean peninsula. They should be acting to restrain activities of the North Korean regime and not be belligerent to their neighbors, especially South Korea. More than anyone else, China has the most leverage on North Korea with giving aid, military and economic goods.
Eventually, if China does play a role, what type of leverage does the U.S. have in China’s actions?
I asked this same question at a press conference at the Center for Strategic and International Studies and I got a very vague response about whether the U.S. will do anything to push China. The U.S. has limited access to induce the Chinese government to act and put pressure on North Korean actions and the regime. It is getting more difficult for the U.S. to control China. Case in point: the currency war. So, in my opinion the U.S. has a limited role. The focal point is that the more the U.S. is becoming dependent on the Chinese economy, the less power the U.S. has.
Do you think this incident will have any effect on trade relations between South Korea and China, given the strong trade relations between China and North Korea?
There will be little difference in trade patterns. The South Korean government actually expects more leverage of Chinese government over North Korea especially over political issues. There has been little tension in the economic sectors, particularly trade sectors, between South Korea and China.
What kind of economic effects will this tension have on South Korea’s economy?
In South Korea, there was a sharp plunge in the stock market immediately after the attack, but it has normalized. There has been no change, particularly in terms of investment from foreign investors. Foreign investors in South Korea are considered the barometer against which we measure the state of the stock market. We haven’t seen any foreign investors fleeing South Korea. In fact, reports say that it is a good time for investors to invest. At this point, they can use the investment strategy of buying low and selling high.
What can we expect in the next few weeks? Will this be another isolated attack?
At this stage, the most important thing is whether or not North Korea will continue further provocations in the days ahead. That will determine the situation with the Korean stock markets and the sentiments of South Koreans. Further, provocative actions will put the U.S. government in a state of crisis to deal with North Korea. The actions of the North Korean government should determine the future situation of the peninsula.
I expect more attacks because North Korea is so provocative and belligerent right now. The North Korean government is facing a very unstable situation internally with the power shift from Kim Jung Il to Kim Jung Eun. This is a type of threshold point for them and they should be controlling their issues peacefully, but because of their unstable situation they want to divert their people’s focus to outside events, particularly toward South Korea. Also the belligerent military could be a cause of more skirmishes or heightened crisis.