Currency Vortex: China Blasts North Korea for Mercantile Chaos

Recent days have been bleeding into one another, swiftly, with a kind of inexorable momentum that allows for little reflection of the past.   Nowhere does this seem more true than in recent news about North Korea, and the Chinese view of the DPRK.

Just when China seems to have settled things down and made nice with the North, to the apparent disappointment of Washington, Pyongyang up and revalues its currency, apparently with no forewarning given to Beijing.

You can typically tell when China is upset about a given North Korean policy, because they quote South Korean or Japanese newsmedia like crazy, or, if the Chinese are really displeased, the Daily NK and Good Friends reports.  Which is exactly what they do in this article from the Huanqiu Shibao on the currency revaluation.

via Huanqiu Shibao

Commentary from Chinese netizens seems fairly slow on this issue at the moment, although Juchechosunmanse may end up hauling up a cache from some BBS I’ve not beheld on Sina.com or another Chinese portal.  One comment here on the Huanqiu board is that “[North Korea] studied this policy from the old Chinese Nationalist government.  Truly, they’re just printing money.”  The Korean Workers’ Party as the Guomindang!  That’s fresh.  Other comments brush aside the currency change and mock North Korea for its barter economy.

Some excellent analysis on the currency question is tendered in English posts (here and here) by Joshua Stanton who digests and links to the relevant Daily NK and South Korean press articles.

On the same story, Curtis Melvin of North Korean Economy Watch offers extensive extracts from NYT, WaPo, Wall Street Journal, AFP, and Yonhap.

In this story from December 1, Huanqiu Shibao offers a disapproving headline on the currency story, noting that it “caused huge chaos in markets” [朝鲜停止使用原有货币引发市场大混乱].  In post-Deng China, that’s a sin!

Not that this news is causing huge waves in areas of China more distant from North Korea.  Not when that dashing Canadian Prime Minister is in town to get some action on the Albertan tar sands project…

Things have been pretty slow over at the Chinese embassy in Pyongyang’s website since the PLA generals left town.  (Some netizen mockery of North Korean military attire and the staged embraces can be accessed here.)  However, I did learn that Liu Xiaoming, the dapper Chinese ambassador to the DPRK, is fluent in English and has a master’s degree from Tufts University in Boston.  I can’t imagine he is doing anything but clucking his tongue at these latest moves in the North.

6 thoughts on “Currency Vortex: China Blasts North Korea for Mercantile Chaos

  1. Adam,

    While I think the title of the web article, which appeared on many Chinese sites could be interpreted as quite telling, I don’t think this reflects the official Chinese reaction as being such (disapproval, blasting the DPRK etc.). The “huge chaos” part, as the article explains, is simply taken directly from the Daily NK’s description. Most of this article consists of recycled stuff from Chosun Ilbo and the Daily NK. To be sure, the fact that the Chinese media are allowed to describe the event using recycled materials from the Daily NK (which is hardly pro-DPRK) is perhaps something.

    1. JCM,

      Point taken. Speaking of the verb I employed (“blasts”), it might be a little strong, but then again that’s why I’m blogging — no army of editors to prune away my excesses such as might exist for SF Chronicle writers! That is to say, I’m willing to concede that I could be exaggerating, but don’t think I am. After all, the rest of the post and the Chinese materials themselves indicate Chinese disapproval with the steps taken by the Kim regime. Given that China is still expressing its nonplussed-ness with the DPRK through the official media, I think “blasts,” given the context, makes sense. Think about it — how would you read this article if you were one of the attaches in the DPRK Embassy in Beijing? I wouldn’t want to write that report home to Pyongyang…

  2. 1.) I think the PRC fears any further manipulation of currency/markets, and I agree, when China is angry with North Korea, South Korean Reporting makes it on the airwaves.

    2.) Dashing Canadian Prime Minister? I think Harper wants to make sure his Tar Sands workers and contractors in China tow the lines 🙂

    Nous ont besoin de envie de toi dans les classes française.

    1. Kevin,

      J’ai l’envie pour faire qqch avec le classe dans l’ancien ecole dans nous tres mignon quatier Wallingford, mais je manque le temps. Malheuresement, mon ami!

      And “dashing” for Harper was my way of saying “tar-sand huffing Albertan big-wig”…his wife wore a shockingly pink coat to visit the Great Wall of China…which is all to say that you are quite correct, dear sir. Great to see you back at this blog, and much appreciate your kind welcoming me on Twitter. (Alas, I am no longer a Twitter virgin.) A la prochain fois!

      Oh, I should add that China is already having problems with North Korean counterfeiting yuan and that folks were rather vigilant about this in the border areas in particular. My understanding of the currency issue — which is evolving (e.g., both the issue and my understanding of it) — is that the currency revaluation is now making Chinese yuan one of the only safe currencies in North Korea, and driving up demand for yuan. So this could in the end be a good thing for the Chinese in terms of economic influence in North Korea and doing business there, but the yuan was _already_ the indispensable currency in the North…so perhaps Kim Jong Il sees this as a way, in the long run, to undercut the influence of the yuan by strengthening the NK won…I’ll keep reading and share what I find.

      What are Timothy Geithner and the Treasury department saying about this anyway? Or the Japanese? More research is needed.

  3. Does anyone know if Chinese traders along the border take North Korean Won while doing business with North Koreans? If so it seems a number of businessmen on the Chinese side of the border could be out of a lot of money.

    1. I would be skeptical in the extreme of Chinese taking won; to my knowledge both sides are working in Chinese Yuan/Renminbi.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s