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View more articles by Peter Ward
Peter Ward is a writer and researcher focusing on the North Korean economy, as well as a PhD candidate at the University of Vienna.
In the 1980s, North Korea briefly experimented with Chinese-style reforms. The project led to great controversy and a round of purges inside the lower echelons of the top leadership.
For a brief time, however, to those who knew what was going on, it appeared as if North Korea might be about to follow China and, tentatively, open up its economy.
The details are sketchy, but it appears that the joint venture law passed in 1984 was consciously modeled on the Chinese prototype, though there was no effort to immediately create Special Economic Zones (SEZs).
What’s more interesting however is the flirtation with agricultural reform, and how it ended in a scandal and the sorry fate of one North Korean geologist.
HEAVY HAND OF CHINA
In 2004, Oh Jin-yong, a South Korean scholar of China, published a relatively obscure book on Sino-Soviet and inter-Korean relations in the late Kim Il Sung era. It offers some fascinating minutes from meetings between Kim and China’s leaders. How the author managed to obtain such records is unclear, but what he printed allows us a look into what the Chinese sought to gain from the North in the early to mid-1980s.
North Korea was a major front in the Sino-Soviet dispute. Pyongyang had long sought to extract aid from both Beijing and Moscow to use on economic development, and also to prepare it for the eventual unification of the Korean peninsula.
Yet, while in public relations between Beijing and Pyongyang remained cordial, under the surface, there was a great deal more tension. As early as 1980, the new reformist government in Beijing began calling on North Korea to move against the alleged “pro-Soviet faction” inside the leadership in Pyongyang.
Huang Hua, then-Chinese foreign minister, in a meeting with then-DPRK foreign minister Ho Dam, demanded this, and that the DPRK repay its debts and the interest owed on them. He was also loathe to point out that China would not be providing the North with free military aid.
Not only that, Huang said that they would be providing North Korea with more oil at higher prices, and that “while many [Chinese] comrades worry that [North] Korea will cheat, I tell them not to worry. [North] Korea has the ‘Soviet card’, but do not forget, we have the ‘South Korean card’.”
To those who knew what was going on… it appeared as if North Korea might be about to follow China
Huang said that “if [North] Korea supports the Soviet Union, you best never mention aid again, and we will support South Korea.” By the standards of diplomatic protocol, this was a brazen threat.
China was clearly displeased with Pyongyang. The context is also interesting: in the late 1970s, Beijing had provided North Korea with a USD$100 million loan, began to supply North Korea with large amounts of newly-discovered oil (1 million tons as part of agreed trade), and a further 1.5 million tons at less than half the price of Soviet oil at the time ($11 v. $4.30).
But Hua Guofeng, the Chinese leader who had made this agreement, lost out in a power struggle with more radical reformers, and in August 1980 – several months after the Huang-Ho summit – the agreement was canceled.
CHINA AND ECONOMY FIRST
In his meeting with Kim Il Sung on April 18, 1981, Chinese leader Deng Xiaoping spoke frankly about the situation in the region and on the peninsula. Kim confessed that the South Korean economy was in a “superior position” to the North. Kim would never admit as much in public, and until very recently, Pyongyang and its propaganda apparatus was loathe to even imply that South Korea was anything less than hell on earth.
Kim being prepared to acknowledge the fact that his regime was losing in inter-Korean economic competition speaks to how badly he wanted aid from Beijing, and Deng was far more polite than his foreign minister had been the year before. The gravity of the occasion, a meeting between heads of state, and perhaps the personal chemistry between the two men, meant that conversations were far less caustic.
Kim Il Sung told his Chinese interlocutors that “we have learnt from China’s policy of opening and plan to implement it”
Indeed, much of the meeting as set out in Oh’s book was consumed with discussion of how to reunify the Korean peninsula peacefully and how to improve relations with the United States – an issue that will be explored in a future piece. Yet, the economic issue was clearly present and a concern in Kim’s mind.
Deng also pointed to the economy as key to ensuring that North Korea could beat South Korea in peaceful competition and ensure unification on favorable terms.
Several years later, on November 27, 1984, Kim Il Sung faced the reality of growing economic ties between Beijing and Seoul. He sat down with Hu Yaobang and Zhao Ziyang, two of the most senior Chinese officials at the time.
In the records quoted by Oh, Kim Il Sung told his Chinese interlocutors that “we have learnt from China’s policy of opening and plan to implement it, how would be best to do so?”
Hu responded that no country can adopt a policy of isolation and hope to develop, but that North Korea should go about reform in a manner in keeping with its own circumstances.
Such trite platitudes had been a mainstay of Chinese foreign policy since well before the Deng era, and remain so today. It is interesting, however, that Kim admitted to conscious attempts to imitate China. Which leads us finally to the sorry fate of a certain North Korean geologist and member of the Workers’ Party of Korea Central Committee and Politburo.
THE PAK CHOL AFFAIR, KIM HWAN, AND THE END OF REFORM
A 2001 article in Shindonga explains how Pak Chol, head of the Geology Research Center at the DPRK Academy of Sciences in 1986, found himself suddenly declared public enemy number one. His terrible crime? To suggest that the country follow China in implementing a household-responsibility system, in which farms were broken down by household and farmers were given the right to keep a fixed percentage of their harvest, thus incentivizing them to produce more grain and profit from working hard.
The regime was struggling to decide what to do in the face of China’s changing policy line
What possessed him to pen an article advocating such an anti-socialist line we do not know. But one can imagine that the idea was drifting around in policy circles, and perhaps, higher-ups had told him to do it. Either way, he disappeared, and we have no idea what happened to him.
Hwang Jang-yop’s memoirs also indicate that a certain Kim Hwan, a top economic official in the Politburo, was also demoted to vice minister for not stopping Pak Chol sooner, while another official was also demoted.
Officials in such senior positions in such an authoritarian country do not get there by freewheeling and moonlighting controversial reform packages without approval from higher up. It seems likely that they believed that they had tacit support from their superiors to experiment with Chinese-style reform in agriculture.
Given what Kim Il Sung was saying to his Chinese interlocutors prior to 1986, and given the Joint Investment Law passed a couple of years previously, it seems likely that the regime was struggling to decide what to do in the face of China’s changing policy line.
Oh’s book, citing sources inside China, states that in the 1983-5 period, there was a ‘movement to learn from China’ in the North. Officials from the central government, provincial and municipal government offices, and even factory officials went on tours of China to see how it was changing and what they could learn – upwards of 5000 people in total.
What’s more, a group of five hundred young observers was divided up into three teams and sent to tour the factories of eleven Chinese cities.
Yet, in June 1983, Kim Jong Il also made his first trip to China, and upon his return, gave a speech to the WPK Central Committee condemning what he had seen as “revisionism.” Signs appear to have been very mixed, to put it mildly, and the leadership seems to have struggled to decide what to do.
Kim returned in September of the same year on a mission to make peace with an enraged Chinese elite, and this seems to be where the impetus to “learn from China” came from. And yet, just a month later, much of South Korea’s government was assassinated in the Rangoon bombing, orchestrated by North Korea (and perhaps personally masterminded by Kim Jong Il) – an act that was heavily frowned upon in Beijing.
The early to mid-1980s were a time where the two Kims, or at least those around them, toyed with tentative attempts at industrial and agricultural reform.
Soon, however, Kim Il Sung moved to neuter more radical proposals in the industrial sphere, as well as in agriculture, and reaffirm the centrality of the rationing system, which seems to have become state dogma by the early 1960s.
Kim Il Sung and his son considered economic reform, but decided that it best to stay on their doomed course
This would turn out to be a fateful set of decisions made in less than two years, in the period of 1985-6, but they would put in place a series of obstacles to wholistic reform that might have saved hundreds of thousands of lives needlessly wasted in the famine of the 1990s.
Many accounts of this period, including Oh’s, stress changing relations with the Soviet Union as being one of the major drivers behind this move away from radical reform. Relations between the Soviet Union and North Korea had begun to improve from icy in 1982 to rather cordial from 1983.
But there was a time lag between this improvement in relations and the promise of economic aid from Moscow and the purge of officials associated with talk and possible experimentation with Chinese-style reform.
It appears that Kim Il Sung and his son considered economic reform, but decided that it best to stay on their doomed course.
Edited by Oliver Hotham