North Korea and Sino-American Relations

Running head: NORTH KOREA AND SINO-AMERICAN BILATERAL RELATIONS

North Korean Nuclear Issue and the Implications for Sino-American Bilateral Relations

Steve S. Sin

Troy University

November 27, 2009

Word Count: 5,059 (Abstracts, Charts/Figures/Equations, Footnotes, and References excluded)

 North Korea and Sino-American Relations

Abstract

North Korea’s nuclear crisis and its threat to the regional and international security is one of the

major international relations issues today. To analyze possible implications North Korean

nuclear issue may have on the Sino-American bilateral relations, utility functions for each

country were constructed and payoffs calculated for each possible strategy. The strategy and

payoff matrixes for both countries clearly showed the best strategy for them is to cooperate with

each other to resolve the North Korean nuclear issue; however, it was also clear that as these two

powers have despairing priorities, and as they pursue their individual national interests, there

may be some political, economic, and military factors that could cause one or both countries

choose not to cooperate. This paper proposes adoption of a set of bold policies by the United

States, such as providing a negative security guarantee to China, offering to reduce the number

of American troops stationed in Korea upon unification of the Korean Peninsula, or creating an

environment where a unified Korean Peninsula would ensure China a much higher economic

benefit than a divided one, could pay dividends in both ensuring the Chinese cooperation and

transforming the Sino-American relations – not only surrounding the North Korean issue but also

for the overall strategic relationship.

 North Korea and Sino-American Relations

North Korean Nuclear Issue and the Implications for Sino-American Bilateral Relations

North Korea’s nuclear crisis and its threat to the regional and international security is one

of the major international relations issues today. The first North Korean nuclear crisis came in

1993 when North Korea announced its intention to leave the nuclear Non-Proliferation Treaty

(NPT) and the United States prepared to attack the North’s nuclear facilities. The crisis was

contained in 1994 when the United States and North Korea signed the Agreed Framework where

North Korea agreed to “freeze” its nuclear program in return for foreign energy aid in the form

of heavy fuel oil and two light-water nuclear reactors [1]. The second nuclear crisis began in

April 2003 when North Korea withdrew from the NPT and soon after restarted its reactors. In

response to North Korea’s withdrawal, and to resolve the nuclear crisis, the Six-Party Talks

(involving China, Japan, North Korea, Russia, South Korea, and the United States) were

launched in August 2003. After six rounds of talks from 2003 to 2007, the Six-Party Talks has

produced little progress of substance [2-4]. On April 14, 2009, North Korea declared it would

pull out of the Six-Party Talks and declared the talks dead [5]. Recently, North Korea, in a

surprising move, has shown signs of willingness to return to the denuclearization talks [6]. The

future of the North Korean nuclear issue, along with it the Northeast Asian security situation, is

unclear at best.

The International community has looked to the United States and China to lead the effort

in resolving the situation, and China has offered its political and diplomatic influence to mediate

six rounds of the Six-Party Talks as the chair-nation of the talks. The cooperation China and the

United States has shown to resolve the North Korean nuclear issue is often held up as an
 North Korea and Sino-American Relations

example of the success of constructive Sino-American engagement policy, despite sometimes

cacophonous relationship between the two countries [7]. This paper argues North Korea,

nevertheless, still has the potential to generate conflict between Washington and Beijing.

First, the United States’ and China’s respective perceptions, positions, and interests on

North Korea, as well as North Korea’s positions and interests are discussed. Second, three

nation-states’ divergence in priorities, desired outcomes, strategies, and payoffs are examined.

Finally, the implications North Korea may have on Sino-American relations in light of different

national priorities are discussed and possible options for transforming the relationship are

proposed.

The Perspectives, Positions, and Interests

The United States’ View of North Korea

Since the September 11 attacks, the United States has focused on preventing terrorist

organizations and rogue regimes from acquiring nuclear weapons or fissile material instead of

preserving the international nuclear nonproliferation regime. Kim Jong-il’s North Korea has

been viewed by the United States, regardless of administration, as a rogue regime who will “sell

anything to anybody.” [8] These two factors are at the core of the United States’ view that North

Korea’s possession of nuclear capability is a threat to regional and international security, and

must be dealt with using stern measures. Since September 11, 2001, the United States has been

engaged militarily on multiple fronts, most visibly in Iraq and Afghanistan, all under the name of

Global War on Terror. Kim Jong-il, an astute student of international events, unsurprisingly has
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expressed concerns about the United States conducting a pre-emptive strike against the North [9-

10]. Reorganization of the Second United States Infantry Division in South Korea was viewed

by North Korea as a move to prepare for a pre-emptive strike against it, as well as

counterbalance the rise of China [11].

Given his insecurities, whether real or perceived, North Korea has consistently demanded a

negative security guarantee from the United States before it will denuclearize while the United

States has been consistent in its position that Pyongyang must abandon the nuclear program first

before any agreements are made. Moreover, the United States is dubious if such a guarantee or a

pact will have any real significance. However, as doubtful as it may, it has had offered the North

a negative security guarantee, stating its intent of non-aggression, a total of 30 times between

1989 and 2009 – to include the 2005 Six-Party Talks Joint Statement, which stated, “The United

States affirms that it has no nuclear weapons on the Korean Peninsula and has no intention to

attack or invade the DPRK with nuclear or conventional weapons…”, only to have the North

Koreans reject it [12-13].

Today, North Korea claims it will agree to return to the Six-Party Talk and work to resolve

its nuclear issue if it has satisfactory results from bilateral discussions with the United States [6].

Normalization of relations with the United States has been a long-time goal and desire for North

Korea [14]. Undoubtedly, it will seek to set the condition conducive to achieving this goal at any

bilateral discussions with the United States. The United States will welcome the idea, but agree

to do so if and only if the North agrees to completely give up its nuclear program and allow the

international community to implement a mechanism that can verify the denuclearization process.
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The United States Secretary of State Clinton stated clearly the United States’ overall

position regarding North Korea during her remarks at the ASEAN Regional Forum, “So our

policy is clear. North Korea knows what it has to do: return to denuclearization talks and fulfill

its commitments under the 2005 joint statement to abandon all nuclear weapons and existing

nuclear programs and return at an early date to the nonproliferation treaty and to IAEA

safeguards. The path is open, and it is up to North Korea to take it.” [15] The United States has

also taken the position any significant benefits to the North Koreans will only come after North

Korea has made substantial progress in denuclearization, to counter the North’s salami tactics [7,

16].

The United States’ interests in the Northeast Asia served by its current position on North

Korea are: 1) maintenance of its alliances with South Korea and Japan; 2) denuclearization of

North Korea to prevent proliferation of its nuclear technology, components, and material to

“undesirables” around the world (i.e. Iran, Myanmar, etc.); and 3) Support unification of the

Korean Peninsula, on South Korean terms, if the prospect of unification without war or major

damage to South Korea becomes possible [7].

China’s View of North Korea

In contrast to the United States, the Chinese approach to the North Korean issue is

markedly softer. There are various factors involved in China’s decision to pursue a softer line,

historical and geographical factors being one of them.

China shares a long and porous border with North Korea, and China considers securing this

border vital to its security. From the Chinese perspective, a foreign invading force could use the
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Korean Peninsula as the springboard to launch an attack into the mainland – the Japanese troops

attacked into Manchuria and then into the Chinese mainland proper after occupying the Korean

Peninsula prior to World War II; during the Korean War, the United States advanced to the Yalu

River before China, perceiving a threat to its security, intervened and pushed the Americans back

to along the 38th parallel. These historical experiences made North Korea an important buffer

state for China – if not militarily, then psychologically; and through its participation in Korean

War, China and North Korea became Communist allies who shed blood for each other against an

“invading” capitalist power.

The Sino-North Korea friendship continues to this day. The Sino-North Korea Friendship

and Mutual Assistance Treaty, signed in 1961, continues to be valid today despite the end of the

Cold War and changes brought about in the international environment as a result [17]. In

contrast, Russia, the other Communist power in the region, abrogated its Treaty of Mutual

Assistance of 1961 with North Korea in 1995 and replaced it with a Treaty of Friendship in 2000,

which does not include military assistance to North Korea if it is attacked by another country

[18]. Aside from a shared past, China is also the principal economic donor-state for North Korea

that supplies it with much needed oil and food.

China’s primary position on the North Korean nuclear issue is that North Korea should be

denuclearized, and the process should be negotiated through a multilateral negotiation forum

such as the Six-Party Talks. At the same time it advocates North Korean regime stability and

dislikes any action that may threaten the stability of the North’s Kim Jong-il regime, such as

punitive UN or unilateral United States sanctions [19].

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Preventing the North Korean regime collapse (which could cause a flood of refugees across

into China from North Korea, and possibly have the United States military forces stationed

immediately across the Yalu River); preventing the North Korean proliferation of ballistic

missile and nuclear technology as well as components and material; and preventing the potential

for a regional arms race [20] are the primary reasons behind China’s position on North Korean

nuclear issue.

China also has an interest in becoming the leader in not only the Northeast Asian security

apparatus but in the East Asian 1 political, economic, and security arrangements as well [21-22],

giving China increased influence and challenging the United States’ interests in the region.

Naturally, one of the questions that weighs heavy on the Chinese leaders must be whether the

United States, arguably a status quo state, would allow the change in the international system to

accommodate this rising revisionist state, who in many ways directly challenges the hegemonic

rule of the United States, or will it opt to counterbalance the challenger.

This uncertainty is exacerbated by the Chinese perception that the United States’ foreign

policy towards it is often ambiguous and inconsistent. This has caused the Chinese to be

suspicious of the United States’ “true” intent towards them. China believes the United States

policy toward China could be a Trojan horse that is designed to hide the United States’ intension

of constraining and containing China, or it could be a policy designed to transform the Chinese

1
China views East Asia as encompassing both Northeast and Southeast Asian regions, specifically area covered by
ASEAN + 3 (China, Japan, and Korea). This viewpoint was discussed in numerous Chinese scholars’ papers as well
as being made clear during the discussions held at the Fourth East Asia Summit in Thailand. (See: Yu, X., China and
Northeast Asian regional security cooperation. Asia-Pacific Review, 2005. 12(2): p. 30-38.; Qian, C. and X. Wu, The
Art of China's Mediation during the Nuclear Crisis on the Korean Peninsula. Asian Affairs: An American Review, 2009.
36(2): p. 79-96.; East Asian Community. Asahi Shimbun 2009 November 12 [cited 2009 November 13]; Available
from: http://www.asahi.com/english/Herald-asahi/TKY200911120138.html.)
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political and social systems altogether – which would mean it would be unnecessary for the

United States to contain or constrain China since the “transformed” China would no longer be a

threat to the United States [23].

North Korea’s Bottom-line

Continued development of nuclear weapons capabilities to deter American pre-emptive

strike [24], and steps to denuclearization will only be taken after a satisfactory American

assurance that it will cease to engage in a hostile policy against the North [12] has been the

consistent position of North Korea.

Regime survival and preservation of the current political power structure is North Korea’s

primary interest. The ballistic missile and nuclear tests give North Korea the nuclear status and

deterrence to external threats – perceived or real. Domestically, it provides propaganda to quell

any dissenters, which all results in an environment suitable for Kim Jong-il to hand over the reins

of power to his heir without any worries – not to mention securing Kim Jong-il’s place of glory

in the North Korean history [13]. North Korea’s other well known interests such as

normalization of relations with the United States, gaining of unfettered access to international

economic and financial markets, retention of its nuclear weapons capability to enhance national

security, and receiving international economic and energy assistance are all predicated upon the

survival of the North Korean regime and its current political power structure [13-14, 25-26].

There are two reasons that make the regime survival a paramount interest to the North

Korean leadership. First, North Korea is arguably a monarchic society that exhibits more

characteristics of a traditional Korean kingdom built based on Confucian rules than a communist
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or socialist society [27]. As such, preservation of the king and the royal family is paramount.

Second, the desires of the North Korean society’s elites to preserve the current system, whether

or not Kim Jong-il or his heir is in charge of North Korea.

The North Korean elites are concerned if the current system were to collapse, they would

be in a situation without any future. Lessons of Romania and East Germany when they

undertook political and economic reforms are not lost to the North Korean elites. What

happened in Romania and East Germany hit the North Korean elites very close to home since

Romania had the closest political system to North Korea and East Germany was the only East

European country born out of national division. Another factor that is not lost on the North

Korean elites is that if the North Korean system were to collapse, the Korean Peninsula will most

likely be unified with North Korea being absorbed by South Korea – which means the ex-North

Korean elites will have to compete with South Korean business managers in an open market

where the South Koreans will undoubtedly have an advantage [25].

Priorities, Desired Outcomes, and Payoffs

Although there is a disparity in the approaches to denuclearizing North Korea between

China and the United States, it is clear both states desire a non-nuclear North Korea. There is

also disparity in the priorities and desired outcomes between the two states – denuclearization is

top priority for the United States where as prevention of regime collapse is top priority for China;

furthermore, end of Kim Jong-il regime and peaceful unification of Korean Peninsula is the top

desired outcome for the United States while denuclearized North Korea with reform-minded but
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intact North Korean regime and system is top desired outcome for China. For North Korea,

clearly the regime survival is top priority, but it also desires to maintain its nuclear capability and

continue to develop its nuclear program [7, 14, 26-28]. Figure 1 illustrates the priorities and

desired outcomes

for the United

States, China,

and North Korea.

Based on

the three states’

positions,

interests,

priorities, desired

outcomes, and

historical backgrounds, a

relationship map can be

constructed (illustrated by Figure

2).

Given the priorities and

desired outcomes, strategies and

payoffs for each state can be

determined by examining the

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12

utility gained by each strategy [29]. There are various factors involved in determining the total

utility – for example, economic implications for North Korea if it decides to cooperate with the

United States or China, or security implications for the United States if North Korea decides to

denuclearize, etc. This paper selected the following factors to be used in determining the total

utility for each country examined – North Korean regime survival, economic impact on North

Korea, nuclear capability of North Korea, impact on Northeast Asian security situation from

each nation-state’s perspective, cost associated with each strategy for each nation-state, and each

nation-state’s place in the international community 2. Using these factors, the total utility of an

individual state can be shown as follows [30-32]:

Ui = f (RMNK, ENK, NNK, Si, Ci, Ii)

Definition of each terms are shown in Chart 1below:

Term Definition
Ui Total Utility of individual nation-state
North Korean Regime Maintenance – Whether or not North Korea’s current regime is
RMNK
maintained (survives)
Economic impact on North Korea – Does it contribute to the improvement of the
ENK
North Korean economic situation and development?
NNK Nuclear capability of North Korea – A nuclear or denuclearized North Korea?
Security Implication for each nation-state – How does it affect each nation-state’s
Si
security interests?
Ci Cost for each nation-state – What’s the cost associated for each nation-state?
Each nation-state’s place in the international community – How is each nation-state’s
Ii place in the international community affected? Does the prestige of the nation-state
improve or worsen? Does the credibility improve or worsen?
Chart 1. Terms and Definitions for the Utility Function

2
I decided to use these factors to determine the total utility of each country based on my knowledge of the regional
situation, research I’ve conducted writing this paper, and the interview (via email) with Mr. William David Straub,
Associate Director of Korean Studies Program at Shorenstein APARC, Stanford University, conducted on 04
November 2009.
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Combining the function described above with the priorities and desired outcomes of each

actor described earlier, specific utility function for each actor can be determined.

The specific utility functions are shown below:

The United States UUSA = – RMNK + ENK – NNK + SUSA + CUSA + IUSA
China UCHN = RMNK + ENK – NNK + SCHN + CCHN + ICHN
North Korea UNK = RMNK + ENK + NNK + SNK + CNK + INK

Since each actor has diverging priorities and desired outcomes, they will place different weight

on each factor that makes up the total utility function. The weighed utility function for each

nation-state can be shown as follows:

The United States UUSA = – α1RMNK + α2ENK – α3NNK + α4SUSA + α5CUSA + α6IUSA
China UCHN = β1RMNK + β2ENK – β3NNK + β4SCHN + β5CCHN + β6ICHN
North Korea UNK = γ1RMNK + γ2ENK + γ3NNK + γ4SNK + γ5CNK + γ6INK

The values that will be assigned to each factor based on the scenario to calculate the total

utility is shown in Chart 2 below.

Factor Value Assigned

If the North Korean regime survives, value = 1
RMNK If the North Korean regime collapses, value = -1
If the North Korean regime reforms, value = 0
If North Korea’s economy is improved, value = 1
ENK If North Korea’s economy collapses further, value = -1
If North Korea’s economy remains the same, value = 0
If North Korea retains its nuclear capability, value = 1
NNK
If North Korea denuclearizes, value = -1
If the security situation for the country improves, value = 1
Si If the security situation for the country worsens, value = -1
If the security situation for the country remains the same, value = 0
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If the cost is reduced, value = 1

Ci If additional cost is incurred, value = -1
If the cost remains the same, value = 0
If the country’s position in the international community rises, value = 1
If the country’s position in the international community falls, value = -1
Ii
If the country’s position in the international community stays the same, or if its
position in the international community doesn’t matter, value = 0
Chart 2. Values Assigned to Each Factor based on Scenario

For the United States, the first priority is the denuclearization of North Korea. Thus, the

factor NNK was given a weight of 6. This would mean α3NNK = 6NNK for the United States.

Following the same vein, weight of 5 was given to SUSA as the United States’ concern for North

Korea’s possession of nuclear capability is based on its perception of regional and international

security implications if North Korea retains its nuclear program. A weight of 4 was assigned to

RMNK since the United States ultimately desires a regime change in North Korea. A weight of 3

was given to CUSA for the cost involved in either successfully denuclearizing North Korea or

failure to do so. A weight of 2 was assigned to IUSA, and a weight of 1 for ENK. With different

weights assigned to each term, the total utility function for the United States can be now shown

as follows:

UUSA = – 4RMNK + 1ENK – 6NNK + 5SUSA + 3CUSA + 2IUSA

For China, the first priority is the prevention of the North Korean regime collapse. Thus,

the RMNK was given a weight of 6 for China. Given that China wants to prevent the collapse of

North Korea for its own security reasons, and assuming China would be sensitive to cost

associated in supporting the North Korean regime, a weight of 5 was assigned to SCHN and 4 to
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15

CCHN. A weight of 3 was given to NNK, a weight of 2 for ICHN, and a weight of 1 for ENK for China.

The total utility function for China with weights can be now shown as:

UCHN = 6RMNK + 1ENK – 3NNK + 5SCHN + 4CCHN + 2ICHN

For North Korea, the first priority is prevention of its regime collapse; therefore, a weight

of 6 was assigned to RMNK. Since North Korea sees its nuclear capability as the path to its

economic recovery, international prestige, and improved national security, a weight of 5 was

given to NNK. Assuming North Korea would most likely give a higher priority to its economic

recovery in order to continue to maintain its regime, a weight of 4 was placed on ENK. An equal

weight of 2 was assigned to both SNK and INK. A weight of 1 was given to CNK. The total utility

function for North Korea with weights can be now shown as:

UNK = 6RMNK + 4ENK + 5NNK + 2SNK + 1CNK + 2INK

Using these utility functions, each country’s payoff for each strategy can now be

determined quantitatively. Three different matrixes were set up to determine the payoffs: The

United States – North Korea, China – North Korea, and The United States – China. The

strategies for the United States and China were simplified to Cooperate and Not Cooperate

(denoted as CO and NC in the matrixes) in the Matrixes while North Korean strategies were

simplified to Cooperate and Denuclearize, Cooperate and Not Denuclearize, and Not Cooperate

and Not Denuclearize (denoted as CD, CND, and NCND in the Matrixes). Figure 3-1 illustrates
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the strategies and payoffs for the United States and North Korea, and Figure 3-2 illustrates the

strategies and payoffs for China and North Korea.

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To calculate the total utility for the United States and China against each other’s strategic

choices, the factor ENK was eliminated since the values for both factors were identical for both

countries (+1ENK). In addition, to calculate the total utility for China compared to the United

States, the weight given to ICHN was changed from 2 to 4 because it is paramount for China to

gain ground in reputation and prestige against the United States on the international stage.

Moreover, the weight for CCHN was changed from 4 to 2. For the United States, the total utility

function was left as the same as the calculations with North Korea. Therefore, the total utility

functions for the United States – China strategy and payoff calculations are:

The United States UUSA = – 4RMNK – 6NNK + 5SUSA + 3CUSA + 2IUSA

China UCHN = 6RMNK– 3NNK + 5SCHN + 2CCHN + 4ICHN

Figure 3-3 illustrates the strategies and payoffs for the United States and China.
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Figures 3-1 and 3-2 clearly show the dominant strategy for North Korea against both the

United States and China is to cooperate with both countries while negotiating to retain its nuclear

capability. They show that while North Korea can obtain positive utility by cooperating and

denuclearizing, the payoff is much higher if it can negotiate a settlement where it can retain its

nuclear stockpile. These results are consistent with Cha’s opinion [13].

For the United Sates, the best strategy with the highest payoff, if it seeks to maximize its

utility, is to cooperate with North Korea and North Korea cooperates and denuclearizes; however,

cooperation is also the worst strategy with the lowest payoff for the United States if North Korea

decides not to cooperate and simultaneously retains its nuclear program. On the other hand, if

the United States wants to choose a risk-averse strategy, not cooperating with North Korea

regardless of North Korea’s decision would be the best strategy. These results seem to be

consistent with the “two track” approach the United States is taking with North Korea today. By

enforcing the UN and unilateral sanctions on North Korea, the United States has chosen the

strategy not to cooperate with North Korea. Concurrently, the United States has consistently

signaled to the North its willingness to cooperate. North Korea has recently stated it is willing to

cooperate and discuss denuclearization, and the United States has realized positive utility by

choosing not to cooperate – as shown in Figure 3-1. On December 8, 2009, Ambassador

Stephen Bosworth will visit North Korea to conduct bilateral talks with the North Korean

leadership [33] – ostensibly to propose to the North cooperative steps on how to resolve the

nuclear impasse. This is clearly a cooperative strategy, and one could argue – certainly some of

the current United States administration officials would – the United States now has an
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opportunity to maximize its utility by choosing to employ both cooperative and non-cooperative

strategies simultaneously, creating the situation described in the upper left-hand square of Figure

3-1.

It should be pointed out that the utility calculation also does suggest that the option of not

cooperate should not be used alone without the possibility of changing the strategy to

cooperative at some point of the relationship because the consequence of the United States and

North Korea both not cooperating could be catastrophic to the Northeast Asian security

arrangement – as shown in the lower right-hand square of Figure 3-1. If the United States is not

going to use both cooperative and not cooperative strategies, whether simultaneously as it is

doing now or sequentially, the results show the only viable choice for the United States at that

point is to cooperate. As for the United States strategy for Sino-American engagement in

resolving the North Korean nuclear issue, cooperation is the strategy that both maximizes the

utility and is risk-averse whether or not China chooses to cooperate with the United States or not

(shown in Figure 3-3).

For China, cooperation, again, is the best strategy with the highest payoff against North

Korea. Relative to the United States, however, China has more maneuvering space as to its

decision to whether to cooperate or not to cooperate with North Korea because for China the

only scenario that will cause China to realize negative utility is if North Korea decides not to

cooperate and retain its nuclear capability at the same time (shown in Figure 3-2).
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Implications and Recommendations

Implications for Sino-American Relation

The three strategy and payoff matrixes illustrated quantitatively the divergent priorities

and desired outcomes of the United States and China in regards to the North Korean nuclear

issue. It was determined the United States can only realize a positive utility if and only if the

United States cooperated with China and China cooperated with the United States in return. In

contrast, while China maximized its utility if it cooperated with the United States, it would not

realize a negative utility as long as the United States cooperated with it. In relation to North

Korea, the United States was able to realize positive utility if the United States cooperated with

North Korea and North Korea cooperated and denuclearized in return, or if the United States

chose not to cooperate but the North decided to cooperate and denuclearize anyway.

Dissimilarly, while China was shown to maximize its utility if it cooperated with North Korea

and North Korea cooperated and denuclearized in return, it was able to realize a small amount of

utility, or at least break even, as long as North Korea cooperated with China regardless of if

North Korea denuclearized or not.

Based on these results, it can be concluded the United States must cooperate with both

China and North Korea and persuade North Korea to denuclearize (whether directly or indirectly

through China) to protect its interests and achieve its policy goals. It can also be concluded

China has more options in dealing with both the United States and North Korea. While it is best

for China to cooperate with both the United States and North Korea and entice North Korea to

denuclearize, unlike the United States, China can protect its interests and achieve its policy goals
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even if North Korea does not denuclearize. Both the United States and China realize highest

utility if the two countries cooperated fully and North Korea denuclearized; therefore, it is most

likely the two countries will continue to cooperate in the future to bring North Korea to the

negotiating table with the ultimate goal of denuclearizing it. However, the analysis also clearly

showed that disparity of circumstances and priorities could generate conflict between

Washington and Beijing in their independent pursuit of national interests.

Some Recommendations

To encourage China’s continued cooperation with the United States, maximize the

probability of resolving the North Korean nuclear issue, and minimize potential future conflict in

the Sino-American relations stemming from the two countries’ divergent priorities concerning

North Korea, the United States must make a concerted effort to modify China’s utility function,

thus changing China’s priorities and desired outcomes. A sensitivity test was conducted for the

Chinese and the United States utility functions to examine which factor(s) would cause China’s

total utility value to change the most. The test results showed RMNK to be the most sensitive

factor, followed by SCHN and ICHN. 3 These results are reflective of China’s current priorities and

preferences discussed earlier in this paper. Although China would much rather prefer an open

and reform-minded leadership than the current North Korean regime, it is in its interest not to

allow the current regime to collapse without a viable replacement structure in place that can

govern North Korea without sending it into chaos. The underpinnings of this Chinese interest in

3
The sensitivity test showed the total utility for China changes the most if the RMNK factor became a negative factor
like that of the United States. The utility changed the second most when RMNK’s weight was simply reduced and
remained a positive factor, third most when the weight of SCHN was reduced, and fourth most when the weight of ICHN
was changed.
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the North Korean regime survival are its perspectives on its own history and national security –

which was identified as the second most sensitive factor in the Chinese utility function during the

sensitivity test.

Given RMNK and SCHN are the two most sensitive factors for China, the United States

should explore the means to change the value China places on them. First, one of China’s

interests in maintaining the North Korean regime (RMNK) stems from its anxiety against the

expected humanitarian catastrophe it will have to face in an event of a regime collapse. To ease

this anxiety, the United States could offer financial and material assistance to China (without the

involvement of the United States military) in the event of the North Korean regime collapse, thus

decreasing the cost for China as it deals with the ensuing refugee problem. Second, China has

quite a bit of economic interests invested in North Korea in trade, mineral mining deals, and

other economic agreements [34-35]. The economic agreements China has with North Korea

probably will no longer be valid once North Korea ceases to exist – one of the reasons China

prefers an open and reform-minded North Korean government to the current North Korean

regime or the total collapse. The United States could change its position on North Korea from

regime change to regime reform – more along the line of the Chinese thinking – thus sending a

clear signal to China that the United States understands China’s concerns and that the United

States’ interests are not that dissimilar to those of China’s. The United States could also offer to

China that it would play the role of the neutral third-party moderator to ensure China’s interests

are represented fairly if and when China negotiates with the government of the Unified Korea

(presumably unified under the South Korean rule) to have its economic agreements with North
 North Korea and Sino-American Relations

23

Korea recognized to be valid (whether in whole or partially) even after the unification of the

Korean Peninsula. Third, China is concerned that it will have the American military stationed

immediately south of the Yalu River if North Korea collapses (This issue affects both factors

RMNK and SCHN ). Since the unification of the Korean Peninsula will not make it likely for the

United States to withdraw its forces from Korea, the United States could agree with China not to

move its forces north of where they are stationed today, and not to conduct military training near

the Chinese border. It may even consider reducing the number of American troops stationed in

Korea after unification of the Korean Peninsula as a measure of good faith. A more concrete

security assurance for China may be for the United States and China to negotiate a non-

aggression agreement, which would provide China with a negative security guarantee.

Additionally, to improve confidence between China and the United States, the two countries

could agree to increase their mutual military education and training exchanges. As a confidence-

building measure, combined 4 military training exercises between the United States and China

may also be considered.

It is clear not all possible scenarios on how to change the value China places on RMNK and

SCHN are presented; however, the recommendations proposed in this paper are both realistic and

plausible options for the United States to adopt in order to encourage China to cooperate more

fully with it on the North Korean nuclear issue and transform the Sino-American relation to

lessen the potential discord in the future.

4
Doctrinally, the term combined is used when describing an operation where two or more countries are involved.
The term joint is used when describing an operation where two or more branches of military service from a single
country are involved.
 North Korea and Sino-American Relations

24

Conclusion

The cooperation China and the United States has shown to resolve the North Korean

nuclear issue is no doubt one of the success stories of the international cooperation; however,

China and the United States does have different perceptions of North Korea stemming from their

divergent strategic interests. For China, its interests include sustaining its neighbor in political,

and security terms. For the United States, North Korea’s nuclear intentions constitute a security

challenge, both regionally and globally. The strategy and payoff matrixes for both countries

clearly show the best strategy for them is to cooperate with each other to resolve the North

Korean nuclear issue; however, it was also clear that as these two powers have despairing

priorities, and as they pursue their individual national interests, there may be some political,

economic, and military factors that could cause one or both countries to choose not to cooperate.

In the near-term, China and the United States are most likely to continue their

cooperation to resolve the North Korean nuclear issue; however, the road to narrowing the

strategic differences of the two countries will be long and difficult. Unfortunately, this probably

means the North Korean nuclear issue will not see much progress either. For the United States,

adoption of a set of bold policies, such as providing a negative security guarantee to China,

proposing to reduce the number of American troops stationed in Korea upon unification of the

Korean Peninsula, or creating an environment where a unified Korean Peninsula would ensure

China a much higher economic benefit than a divided one, could pay dividends in both ensuring

the Chinese cooperation and transforming the Sino-American relations – not only surrounding

the North Korean issue but also for the overall strategic relationship.
 North Korea and Sino-American Relations

25

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