Danger Alerts: Risk of war with China and North Korea dramatically increasing

Historically, North Korean threats were nothing more than sabre rattling akin to a young child acting out for attention. However, North Korea today is more unstable than ever. Its people are starving, its economy is virtually non-existent, and it now has nuclear weapons (thanks to the last 3 US Presidents). Worse yet, Kim Jong Un, the nutcase boy “leader” that makes Caligula look like a decent guy, has his finger on the trigger ready to initiate a major war. So what makes this escalation by North Korea something we should take more serious than the countless previous flare-ups on the peninsula? In short, North Korea isn’t the issue, but its puppet master China is the game changer. China is in trouble and could use this latest escalation to turn the skirmish into a hot war. The probability of this is higher than it has been in since the end of the Cold War and it is making analysts take the threats far more seriously.

China is the key player in whether or not war breaks out on the peninsula. North Korea won’t act unless China allows it even though we know North Korea is politically unstable and is as close as the world gets to a true case of an irrational actor. However, China is seen as a keenly rational actor that has historically acted behind the scenes as a moderating influence on North Korea for its own interests. In simple terms, China has acted as North Korea’s big brother to bail it out of trouble, keep it out of trouble, and provide it protection. Nonetheless, China backs North Korea because it can use North Korea, not because it loves North Korea. China’s relationship with North Korea gives it significant geopolitical leverage with the West because any negotiations with Pyongyang will require Chinese support. Further, North Korea provides China a military buffer on its southern flank from capitalist South Korea, an ally of the US. In the event of war, North Korea could effectively tie down and attrite multiple US divisions providing China significant operational maneuver space and the ability to flank forward deployed US units. Finally, although financially broke, North Korea provides China a market for both commercial and military goods.

What has changed that would affect the Chinese calculus respective of the costs versus benefits of allowing a war to erupt between North and South Korea? China has neither been in a military position to pick a fight with the United States, nor has it been in a political situation where a war with the US would be anything but a complete disaster for China since Korean hostilities ended in 1953. However, with the recent and on-going economic collapse in China, the communist government is in panic. Why would China panic? For starters, China has a population of close to one and a half billion that just lost their life savings after investing it in their stock market at their government’s behest. Those people are now about to be unemployed en masse and won’t be happy. Further, China already has a growing dissident problem, which will only become more widespread as the communist government loses all credit with its people. China needs a distraction from their economic collapse and a means to rally the people around the government. Historically speaking, a war has been the easy solution.

China realizes for the first time in at least 300 years it is nearing a point where it could regain its historic position as a global superpower, but that long term goal is now in jeopardy. China knows it is in a global economic war for keeps. If it loses to the West it will once again be relegated to a second tier power. China must save its currency and economy even if it means upending the rest of the world. We recently saw this desperation as China devalued its currency, arrested anyone short selling stocks, and dumped billions into its markets to maintain liquidity. These drastic measures have failed though to stop the crash of the Chinese economy. Faced with the reality that China will suffer a massive economic collapse that cannot be avoided and a return to second tier global status for generation; China’s only hope of coming out on top is if everyone else suffers an even more severe collapse. Beijing doesn’t have the ability to independently collapse the US economy, but it does have the ability to bait the US into effectively committing economic suicide. The strategy to trick the US into economic self-annihilation is China’s only real option to win this economic war and fits far better with the Chinese way of war. How it will accomplish this is what has me worried.

One possible scenario Beijing may exercise is to allow North and South Korea to return to full-scale war. China knows the US will be forced to enter into the war when it is least able and already over extended. The costs for a war in Korea would be prohibitive and certainly enough to finish off the US economy and quite likely the US Dollar as the world’s reserve currency. The more China can get the US bogged down in a war with North Korea, the better it will be for China. Further, China knows that after the US has been worn down fighting all over the globe and then in Korea, it will have the opportunity to act as a king-maker in any peace deal whether or not it actually gets involved in the war. If China did decide to get into the war, it would be after the US was weakened in order to rally their population around the communist government. The intended end result for China would be that the South Korean economy is wiped out, the US economically collapses and is forced to militarily retreat globally, and China is left as the only man standing. Japan would also be economically destroyed along with its ally the US and Taiwan would be in a position that it could be absorbed by China. I do not believe things would end that well for China, but that would be close to the Chinese military’s end state.

If China was desperate enough to execute this strategy, what would it look like? Well, it would probably present just as we have witnessed on the Korean Peninsula over the last 72 hours. Kim Jong Un would initiate hostilities based on some completely contrived pretext such as the current issue over South Korea using speakers to broadcast anti-North Korean propaganda across the DMZ. A small skirmish would take place, which North Korea would then use as a pretext to launch a large-scale attack. This chain of events has already begun. Both North and South Korea have exchanged indirect (rocket and artillery) fire. The exchange set the stage for tensions to rise to a full wartime status. In fact, yesterday Kim Jong Un ordered frontline units of the Korean People’s Army (KPA) to “enter a wartime state” from Friday 5pm local time (08:00 GMT). The KPA followed up with an ultimatum that gave the South 48 hours to dismantle loudspeakers blasting propaganda messages across the border or face further military action. The ultimatum expires on Saturday at 5pm in Korea and so far there is no sign South Korea will back down and nor should it.

By breakfast time tomorrow we should have a good idea of whether North Korea and Kim Jong Un are again bluffing to get political concessions and will back down or if the world is about to begin another horrific war. Generally, I have hedged my bets that North Korea would back down, but due to the unique circumstances currently facing key actors, no one should be blindly discounting the on-going escalation on the Korean Peninsula. In the small but still possible event a broader military exchange occurs between North and South Korea in the coming days you should be prepared to initiate your bugout plans. A full scale war with North Korea and possibly China has the ability to go nuclear. Those of you living on the West Coast and Hawaii should be most prepared because you are the most vulnerable. Further, North Korea has the potential to detonate an EMP device that could potentially black out large portions of the US. Although I still assess the possibility as low, the threat is higher now than it has been in decades and as such, we should take additional precautions until the situation stabilizes.

By Guiles Hendrik

August 21, 2015





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