June 11, 2011: The increasingly hostile attitude towards South Korea from the north is apparently part of a plan to reduce anti-government activity in the north by building up a foreign threat. This is nothing new, and doesn't work as well anymore. But the northern leadership is desperate. Meanwhile, a large scale investigation of border guards on the Chinese frontier is expected to result in arrests and executions, and reduce smuggling (of people and goods), at least for a while. The bribes offered by the smugglers are too attractive for the border guards to avoid for long.
Chinese officials have become increasingly blunt in pointing out these realities to their North Korean counterparts. China does not want an economic and political basket case on its border, nor will it tolerate a political collapse in the north, followed by reunification. China does not want another democracy on its borders. So the northern leadership has been told to follow Chinese advice, or risk losing everything. That implies China arresting North Korean officials who try to flee to China (before or during an uprising or civil war in North Korea). Many wealthy North Koreans have moved cash to China, and bought homes there. No other nation is this accommodating to North Koreans, and the threat of Chinese hostility has gotten the attention of the North Korean leadership.
China is also unhappy with the chaotic way North Korea is run. It’s not just the ruling Kim family (who are quite odd, but so are many politicians), but the whole paranoid, dysfunctional, unpredictable atmosphere in the north. China is most upset with the unpredictability, and is demanding more discipline and, to put it bluntly, obedience. Lacking that, there will be consequences. More Chinese troops have been moved to the North Korean border, and China is less discreet about its network of spies and agents in North Korea. The rumors of a ruthless "China faction" in the North Korean leadership have been given some official recognition by the Chinese. Thus the Chinese are attempting to use the "offer you can't refuse" gambit on the north. It may work, and bring about much needed reforms. Otherwise, the Chinese threaten to pull the plug on aid and political support, and perhaps order the China Faction to take action.
Over the last few weeks, North Korea has allowed inspection teams from the EU (European Union) and the U.S. to investigate the extent of malnutrition in North Korea, and the need for immediate massive food aid. The northern government is admitting that it has a serious food shortage, which China cannot cope with. There's a worldwide food shortage at the moment, and only the West has the kinds of food reserves that can supply North Korea's needs.
Despite the efforts to increase economic ties with North Korea, China is giving more publicity to the smuggling of methamphetamines into China. Since the late 1990s, pharmacists and other medical personnel have been manufacturing methamphetamines, and selling the stuff to Chinese dealers across the border. Often, the Chinese gangs send Chinese into North Korea to smuggle the drugs back. This trade was, and is, a vital source of income at a time when starvation was an ever present danger. But in the last few years, more and more of the methamphetamines have been sold inside North Korea, to the children of the ruling class, and the growing number of affluent trader families.
The North Korean prison camps are expanding, which can be seen from satellite photos. Relatives of prisoners or those released bring with them horrific details of life in the camps. More people are being arrested for economic crimes (black market) and espionage (using a cell phone or listening to foreign radio news). About one percent of the North Korean population is in these labor camps, and 5-10 percent do not survive their time there.
Recent arrests in India revealed that North Korean diplomats were involved in a high-end stolen car operation. The gang imported stolen (in the West) luxury cars and sold them to prominent Indians. North Korean diplomats have long been involved with smuggling illegal goods, in order to make money (if only to pay the cost of running the embassies).
Information leaking out of the north indicates that many senior officials saw the late 2009 currency reform effort (which crippled an already weak economy) as the last straw. After the new currency was introduced and many entrepreneurs lost their savings (because only small amounts of old currency could be turned in for new bills), many senior officials lost all respect for Kim Jong Il (who personally backed the currency reform). Although the official in charge of the currency operation was executed, he was just following instructions. Many economic advisors argued against the currency reform (which was aimed at destroying the free markets, and succeeded). Many northern leaders fear political reform, and see economic reform as a precursor. But is also becoming obvious that the current, communist style state control of the economy, is simply not working, and never did anywhere.
June 8, 2011: For the first time in two years, the north test fired two of its short-range (100 kilometers) KN-06 ballistic missiles. Over two days, the missiles were fired into the East China Sea.
June 6, 2011: North Korea announced the establishment of economic zones on two islands in mouth of the Yalu River (the border with China). Chinese firms established on the two islands would have special tax breaks doing business in North Korea (which controls the two islands.)
The South Korean government warned its military officers that North Korea had hacked into Defense Ministry computers and obtained the email addresses of all southern military officers. The north was now using this to launch "fishing" attacks against these officers and that the targets of these attacks should be wary with their email.
June 5, 2011: Chinese officials claimed that they have done more to control North Korea than they get credit for. This is because North Korean leaders are very sensitive about public discussions of how the North Korean government operates. So the Chinese keep details of those discussions secret, which is easier to do in a police state. But now the Chinese are being more vocal about North Korea, a change in policy apparently directed at the North Korean leadership.
June 4, 2011: Responding to more hostile announcements from the north, South Korea said it would respond strongly (as in full scale war) if the north attacked again. The north continues to be very hostile to South Korea, a policy it adopted three years ago, when a new government was elected in South Korea that sought to hold North Korea accountable for lies and broken promises in the last decade. North Korea, as usual, denied everything and demanded that the South Koreans apologize.
June 2, 2011: The South Korean government has been issuing more warnings about Cyber War attacks coming from North Korea. Most of these attacks are traced back to North Korea and China and are seeking military, commercial and government secrets. Some of the attacks are just plain theft (as is most of the Internet based crime.)
May 31, 2011: In a major breach of diplomatic protocol, the north detailed secret talks in China, in which the south offered to hold three high level negotiation sessions. The north not only refused to hold these talks, but has exposed the details of the secret talks. The south replied that the northern account was one sided, and would say no more. The discussions, between diplomats from north and south, were undertaken with the understanding that they would be kept secret (so as not to embarrass the north, which was officially very angry at the south). Despite this breach of diplomatic etiquette, a team of South Korean officials were recently allowed into the north in order to assess how much food aid the south should send to cope with the growing starvation in North Korea. Some in the south believe that this hunger is exaggerated, and that the north is seeking free food so they can sell it in China and spend the money on consumer goods for the elite and new weapons for the military. This has happened before.
May 30, 2011: The north has cut the hotline with South Korea, to protest South Korean refusal to halt anti-North Korea propaganda efforts based in the south. The south can't crack down on anti-north groups, especially since most of them advocate religious and political freedom for the north.
May 26, 2011: China admitted that North Korean officials were making a secret visit to China. The trip was difficult to hide, as Kim Jong Il will not fly and insists on travelling with his own private train (which covered over 4,000 kilometers on this visit). Cities visited endured very tight security (hundreds of thousands of North Korean refugees live in China, and many would love to hurt Kim and his henchmen). China later revealed that, in return of Chinese economic aid and advice, the north agreed to resume negotiations about limiting or eliminating its nuclear weapons.
May 20, 2011: Northern leader Kim Jong Il and key economic aides arrived in China for a seven day visit. The North Korean visited dozens of Chinese companies and the explosive Chinese economic growth of the last three decades was explained. Kim met with his Chinese counterpart, and agreed to greater economic cooperation. This included special trading privileges for China, and Chinese firms setting up companies in North Korea. This is meant to show the North Koreans how it is done, and help the North Koreans to create their own version of the "Chinese economic miracle." Some overenthusiastic North Korean media specialists promptly announced that the north would enjoy spectacular economic growth by next year.