July 28, 2017: Despite the enforcement of sanctions by Chinese border guards, North Korean firms (both government and private) are encouraged by the North Korean government to smuggle and North Korean border guards are under orders to cooperate. This gets complicated because it basically encourages everyone who can to smuggle. North Korea needs this to survive, especially the government that needs foreign currency to pay for imported tech and components for military programs as well as consumer goods to keep the senior leadership loyal. There are other ways to please the elite and the government is now allowing successful retail enterprises, especially in the major cities, to obtain and turn on illuminated signs or displays. This was long banned because of the chronic electricity shortages. But now the government is going full free-market in many areas. As a result satellite photos of Korea will show more lights at night. Since the 1990s these satellite photos have shown a lit up South Korea, Japan and, increasingly, a rapidly developing China. North Korea remained dark. There is a downside to this new policy because the government is also making the electricity shortage worse by installing electrified fences along parts of the Chinese border, to keep North Koreans from fleeing to China and beyond.

There are already a lot of North Koreans who have permission to cross the border and do business in China, or take small boats to sea. These have always been the main source of illegal (as opposed to government sponsored) smuggling. The new rules makes it more attractive for these legal commercial travelers to smuggle because the risks are much lower. Chinese police have always been easier to bribe and now it is cheaper as well because in the past you had to pay extra to not be sent back to North Korea if arrested in China because most such smuggling related crimes in China are not something you will be punished back in North Korea. However, Chinese police seize smuggled goods plus vehicles or boats involved and keep those items. Smuggling is still risky, but you no longer risk labor camp or execution if caught.

Another side effect of the relaxed policing of smuggling is the growth of regular crime like robbery and burglary. This is especially true along the Chinese border where there is more to steal on the south side. North Koreans and foreign merchants (mainly Chinese) are increasingly vocal with their complaints about the North Korean police ignoring the situation. All foreigners doing business in North Korea note a breakdown in order. Even authorized foreign commercial operations are pulling out because the criminals are often government officials or, it seems, the government itself. Foreigners, and North Koreans, note that there are fewer North Korea officials who are immune to bribes. This includes the dreaded secret police who were longed used to hunt down and punish corrupt officials. That has changed. This increased acceptance of bribes opens up more opportunities. For example, the government changed the conscription law in 2002 and eliminated deferments for nearly all men admitted to a university. This 18 year olds now had to serve 6-10 years in the military and then take tests again to confirm their ability to do university level work. The only exceptions were extraordinary students. But that exemption has become corrupted and if your family was wealthy enough you could afford a large enough bribe to get declared an exceptional student and delay military service. The universities quickly realized that most of their exceptional new students were not that smart, but wealthy enough to pay a large bribe. As this became A growing number (now at least half) of male high school students decided to not even take the tough university entry exams because, why bother.

The Defector Return Program

The North Korean government is no stranger to the use of bribes and has long used them to get their way in foreign countries, especially Russia and China. Currently the government is spending a lot of money to bribe Chinese police, especially those in areas near the North Koreans border. Cooperation from the Chinese police is needed to make it possible for North Korean agents to identify and kidnap North Korean illegal migrants and take them back to North Korea. Normally this is a death sentence for the returnee but in this case the North Korean secret police often offer the kidnapped defector an option. If they pretend they returned voluntarily they will not be punished. In other cases Chinese police are bribed to aid and ignore North Korean agents seeking to terrorize, or even murder, locals (usually ethnic Koreans who are Chinese citizens or foreigners legally in China) who support North Korean defectors. North Korea is believed to have used this kidnapping program to go after North Koreans who had escaped to South Korea and returned to China to visit friends or family who were living in northwest China before they made their way to South Korea. Since Kim Jong Un took power in 2011 at least 25 North Koreans who had escaped to South Korea have returned to North Korea. Such defectors can easily do so since once they establish legal residency in South Korea they are free to go anywhere they want to, except North Korea. It is illegal for South Koreans to visit North Korea without government permission. South Korea doesn’t track the movement of these former North Koreans once they have been accepted but because of fears about kidnappings and North Korea using defectors as spies South Korea is now seeking to locate some 900 North Koreans now residents of South Korea that cannot be located. Most may have simply moved to other countries, which a growing number do. But South Korea suspects something more sinister. While North Korea has deliberately sent trained spies to South Korea pretending to be refugees (several have been caught or defected) it is known that North Korea has been more successful in using threats against family members of defectors who are still in North Korea as a way to get North Koreans in South Korea to become spies or return to the north.

This defector program has to be kept secret but it is apparently a high priority for leader Kim Jong Un. In large part that is because 2016 was a record year for the number of North Koreans getting to South Korea. In 2016 1,414 North Koreans made it, which was 11 percent more than the 1,275 in 2015. That meant the number of North Koreans who made it to the south since 1953 reached 30,308. It was widely predicted that the 30,000 mark would be reached by the end of 2016. Most of those who have gotten out of the north to the south have done so since the late 1990s. The growing number of escapes was another side effect of the markets the North Korean government has forced to legalize since 2000. This greatly expanded the illegal black market that had been around for decades. It meant that many poor families suddenly had lots of money (by North Korean standards), which enabled them to hire people smugglers, buy boats or bribe border guards. For a long time most escapees stayed in northeast China but eventually the people smugglers established reliable, if expensive, escape routes to South Korea for the growing number of North Korean escapees who could afford it. China had long been a dangerous (for illegal Korean migrants) and less prosperous place than South Korea because China periodically cooperated with North Korea to identify, arrest and send back North Korean illegally in China. This was often a death sentence for those sent back.

Since 2014 China has eased up on its persecution of illegals from North Korea and in 2016 was openly allowing some of them to legally cross Chinese borders to reach South Korea via Southeast Asia. This trend so alarmed North Korea that Kim Jong Un began dismissing military personnel (including officers) if they had any family members who had defected. This was because it was suspected (but apparently unproven) that these soldiers might have heard from their defector kin about life in South Korea and passed that on. It was obvious to the government that a lot of news about North Korean defectors living (usually quite well) in South Korea was getting back to the north and the reason was the use of illegal cell phones and smugglers who got cash and sometimes thumb drives with video from the defectors or just South Korean movies and TV shows.

The defectors are becoming an increasingly dangerous threat for the North Korean government, something became obvious as more and more North Koreans reached the south where they could speak freely. Only about 500 North Koreans a year were reaching South Korea in the late 1980s. By the late 1990s, after the economic collapse up north and a famine that killed 5-10 percent of the population, the number began to rapidly increase. By 2009 it was nearly 3,000 a year. When Kim Jong Un took over in late 2011 he cracked down hard on this illegal migration and reduced it to about 1,200 a year by 2015. But that trend has apparently reversed. There was another change, now most of the North Koreans arriving in South Korea are women. In the late 1990s less than ten percent of those reaching South Korea were women. Since then this has grown to the point where 80 percent of the arrivals are women. There are several reasons for this. Women are more adaptable and have an easier time finding a spouse in South Korea. For the North Korean men, South Korean society is actually quite hostile. Moreover, men are more closely watched in North Korea.

South Korea is scrambling to find solutions to all this, but as they discovered when they studied the experience of East and West Germany reuniting, the culture shock was a generational thing. Those who were teenagers and younger could easily adapt but the older ones, who had grown up in communist East Germany, never fully adapted to life in a free market democracy. Unfortunately for South Korea, most of the northern refugees are not kids, but adults who have been conditioned to live in a police state and have chronic difficultly adapting.

A Chinese Show Of Force

The growing number of Chinese troops on are showing up on the border and are apparently their mainly to stop any large scale movement of desperate North Koreans trying to escape a government collapse in North Korea. But that is obviously not their only potential use. In the last few months these Chinese troops have carried large scale training exercises on the North Korean border, visible from the North Korea side of the rivers that form most of the border. This reminds North Koreans that Chinese troops are capable to invading North Korea because most North Korea troops are stationed on the South Korean border and the Chinese know that many North Koreans would welcome, or at least tolerate, such a Chinese “incursion.”

While the Chinese are sending more troops to the North Korean border this is often described by local officials as responding to the growing incidence of crime committed by North Koreans. This is most obvious with deserting North Korean soldiers, who often come across in uniform with their weapons and create a very visible (and embarrassing) North Korean threat in China. In support of this anti-crime angle this year China finished installing all-weather surveillance cameras all along the border.

Russia Helps A Little

Russia is trying to improve its relationship with North Korea but most of what the Russians do is more publicity stunt than economic boost. The latest example is the failed ferry. In June 2017 Russia and North Korea opened a new weekly ferry service between North Korea and Vladivostok, the major Russian port on the Pacific coast. A 1,500 ton North Korean ship was used, a vessel that carries 193 passengers plus cargo. Because Russia is checking cargo (for sanctioned items) and IDs the ferry is not getting much business. Russia continues to observe European rules on who and what can legally go to North Korea. This is done so as not to threaten trade Russia still has with European nations.

Russia has also increased its exports to North Korea in 2017 but that does not amount to much as Russian trade always accounted for only a few percent of North Korean foreign trade.

Perspective

Over 90 percent of North Korean foreign trade is still with China and the Chinese trade is declining because of sanctions. Although North Korea GDP rose a bit (4 percent) in 2016 that was mainly because of several major weather related disasters North Korea suffered from in 2015. This year does not look as promising. Moreover North Korea has a miniscule GDP ($29 billion in 2016) which is pathetic compared South Korea ($1.3 trillion), Russia ($1.2 trillion) and China ($11 trillion, second only to nearly $19 trillion for the United States.) On a per-capita basis South Korea GDP is more than 20 times larger than the north and per capita GDP of China and Russia is more than five times larger than North Korea. The problem here is that the current North Korean leadership insists on developing ICBMs with nuclear weapons so they can threaten the wealthiest nations to give them all the economic aid they need to make their communist police state economically viable. China is not threatened by any North Korean economic or military threat but is concerned about a flood of North Korean refugees heading for China in a crises. The Russian border and economy are much less accessible and the South Korean border is protected by minefields and massed North and South Korean troops. What makes this worse for China is the fact that most Chinese despise the North Korean leadership and what they have created. This is one thing most Chinese and South Koreans can agree on.

July 27, 2017: The U.S. announced a ban on visits by American citizens to North Korea. This will take place within 30 days, giving Americans who had already made such arrangements to deal with the ban in an organized fashion.

The U.S. is also imposing new sanctions on North Korean weapons programs and the Japanese are going to support these new moves. China and Russia oppose these new sanctions, if only because they did not go through the UN (which enables China and Russia to modify them).

July 25, 2017: In the northeast North Korea carried out a SLBM (submarine launched ballistic missile) test at Simpo shipyard using a submergible barge. This operation was apparently to test the cold launch capability of the “Polaris” SLBM. Cold launch enables igniting the rocket motor after the missile is ejected from its launch tube with a gas charge. This is essential for SLBMs when launched while the sub is underwater. Simpo is also where a North Korean SSB (diesel-electric submarine carrying ballistic missiles) is being built. This was confirmed in early 2015 when aerial photos clearly (despite a camouflage net) showed an SSB under construction. Based on what is known so far it appears that North Korea could have an operational SSB (carrying reliable missiles) by 2018 if they complete and successfully test the new 2,000 ton SSB under construction as well as complete development of the SLBM.

North Korea has increased pressure on South Korea to halt the South Korea use of loudspeakers on the DMZ which feature news and South Korea pop music for people (mostly North Korean soldiers) near the DMZ who can hear it. South Korea has discovered that this loudspeaker program, resumed in mid-2015 after being suspended for eleven years, has been having quite an impact on North Korean soldiers.

July 24, 2017: Japan and Germany signed a defense technology development agreement. This is the eighth such agreement Japan has signed with foreign countries (all major defense manufacturers) since Japan lifted the constitutional restrictions on exporting weapons and doing joint development of weapons and military equipment with other nations. Eliminating these post-World War II restrictions in 2014-15 was mainly in response to the North Korean threat but also intended to do the same for China and Russia. Japan has long produced modern weapons, often American designs, but only for Japanese use. Japan has an excellent reputation for designing and building high-tech equipment and that would serve them well in the defense markets.

July 23, 2017: Japan revealed that it had been tracking a North Korean Romeo class (1,800 ton) submarine that had spent at least ten days operating in the waters between Korea and Japan. It is unusual for a North Korean submarine to spend so much time at sea. Normally the Romeo boats rarely go to sea and never for more than four days at a time and not as far out (about 100 kilometers) to sea as the current operation. Apparently American and South Korean forces are assisting in monitoring the elderly North Korean sub, trying to ascertain what it is up to.

North Korea has 70 subs, but only twenty are large subs and these are all elderly Romeo class boats. The Russian Romeo class was the successor to the Whiskey class boats, which were, in turn, based on the German Type XXI which first showed up in 1943, and was the first modern submarine in that it was designed to spend most of its time underwater (with just the snorkel device and periscope above water, to bring in air for the diesel engine and crew). The Type XXI was a 1,600 ton (on the surface) sub, compared to the 1,500 ton Romeos. Russia built over 500 Romeos, while China built over 80. The rest of the North Korean subs are much smaller and of more recent construction and are used mainly for delivering commandos or spies or ambushing larger ships along the coast. Only a few of the Romeos are operational and these are the only subs that can operate away from the coastal waters.

In contrast South Korea has 15 modern submarines and more being built. Currently this consists of nine 1,200 ton KSS-1 boats and six 1,800 ton KSS-2. All are German designs but built in South Korea. The KSS-2 is based on the German Type 214 and has AIP (Air Independent Propulsion) that enables it to remain under water for more than a week at a time. Three more KSS-2s are being built and will enter service before the end of the decade. The KSS-1s were built, mostly in South Korea, during the 1990s and are based on the Type 2009. South Korea is planning an even larger class of subs built to regularly operate throughout the Pacific.

July 20, 2017: Aerial and satellite surveillance detected preparations by North Korea to preparations to test launch another SLBM.

July 17, 2017: South Korea’s new president (Jae In Moon) offered to resume discussions with North Korea and was ignored. Such discussions have not been held since 2015 and Moon’s predecessor finally told North Korea that such talks were useless and a waste of time. Moon got elected partly on the promise to resume talks with North Korea as well as maintaining a strong military to deal with the obvious and growing North Korean threat. Meanwhile North Korean officials told the media talks would not be possible unless South Korea made some serious concessions, like returning all the North Koreans who had fled to South Korea in the last year. This included some senior officials and South Korea is unlikely to even consider such a demand. North Korea would accept other gifts, like food, petroleum or whatever, as long as there were no conditions attached (like assurances that the food would go to the neediest North Koreans, which is most of the population at this point.

July 10, 2017: Thailand ordered another eight South Korean T-50 jet trainers. This follows a 2015 order for four. The T-50 can also operate as a ground attack aircraft. The first four aircraft will be delivered at the end of 2017 and early 2018. The first order included an option to buy twenty more. The T-50 will be used for advanced training of pilots for the Jas-39 and F-16 fighters used by the Thai air force.

July 9, 2017: A video appeared on a North Korean website featuring Im Ji-hyun, a woman who had escaped to South Korea and had apparently returned to North Korea. During the video interview Im Ji-hyun said she returned because life was inhumane and South Korea was cursed with materialism and greed.

July 7, 2017: In the Japanese EEZ (exclusive economic zone) a Japanese Fisheries patrol boat investigating reports that North Koreans were illegally fishing for squid was confronted by an armed North Korean boat with a large gun manned and turned towards them. The Japanese patrol boat turned and fled and was pursued for about ten minutes before the North Korean boat also turned away. This was apparently to give the North Korean squid fishing boats time to get out of Japanese waters. The EEZ is anything within 380 kilometer of the coast. Nations can claim, via an international treaty, that EEZ areas are their coastal waters for economic and some military purposes. This includes fishing and potential underwater oil and gas fields. North Korean fishing boats increasing fish illegally in Japanese, Russian and South Korean waters for particularly valuable items. North Korea needs the money and North Koreans who depend on fishing are under increasing pressure to bring in more high-value catches. Japan complained to North Korea about this most recent incident and, as usual, North Korea ignored the complaint and the photographic evidence.

July 4, 2017: Russia and China have come up with a new plan to deal with the North Korean crises. This one involves North Korea agreeing to temporarily halt its nuclear weapons and ballistic missile programs and in return South Korea, the United States and Japan would temporarily halt joint training exercises. At that point all parties would enter negotiations to develop a permanent solution. Russia and China also want South Korea to consider getting rid of its anti-missile defenses, especially THAAD, as it is seen by China and Russia as a threat to the effectiveness of Chinese and Russian ballistic missiles. These proposals did not gain much, if any, acceptance from anyone they were directed at. China and Russia understand that what North Korea wants is cash and access to essential imports (food, oil and all manner of tech) and will not accept any substitutes.

July 3, 2017: North Korea launched what it described as a new ballistic missile, the Hwasong-14. North Korea described the test as successful and proof that North Korea had a working ICBM (Intercontinental Ballistic Missile) design. None of that was true. What North Korea did do was launch a two-stage ballistic missile that went higher (over 2,500 kilometers) than an ICBM normally goes (about 1,200 kilometers) but did not have enough momentum to go very far and the second stage (or what was left of it) came down in the ocean 930 kilometers from where it was launched. To be a working ICBM Hwasong-14 would need rocket motors in the first and second stages that could fire longer (carry enough fuel or be efficient and reliable enough) to keep it going at that orbital (where low orbit satellites regularly operate) altitude long enough for a third stage to separate and use a reliable guidance system and re-entry vehicle able to handle the heat of high-speed descent to the surface. North Korea is, as usual with its many recent long-range ballistic missiles, missing a lot of key components but managing to keep the media spotlight on the few features that did work and imply that the missing capabilities will appear in due course. Like many North Korean assurances (about their economy, their ability to feed their population and much else) “due course” actually means; “eventually but not yet and maybe never.” North Korea knows that this is not a popular subject for the mass media and has been able to get away with this sort of thing for decades.

Currently the North Korean media scam is concentrating on ballistic missiles because it consistently works. It is scary and you don’t have to show much progress to get the foreign editors interested. For example on May 14th they conducted a ballistic missile test involving what they described as a Hwasong-12 (KN-17) IRBM (Intermediate Range Ballistic Missile) in its first successful test. This missile apparently used a rocket engine similar to the one used in Hwasong-14. The last test of the Hwasong-12, at the end of April, failed. Hwasong-12 is a single stage SCUD type (liquid fuel) ballistic missile that has long been in development. It is used on a tracked mobile launcher and is rumored to have a warhead with a guidance system capable of hitting a large, moving ship (like an aircraft carrier) at sea. There is no proof of that at all, but makes for great headlines. In theory the Hwasong-12 could have a max range of over 4,000 kilometers but this test only took the missile out to about 780 kilometers. If another test takes a missile out to 900 kilometers it’s worth another lucrative headline.

June 27, 2017: In June 2017 the South Korean Navy received its second locally designed and built minelaying ship; the 4,200 ton Nampo. This is to be the first of a class of four or five minelayers. Normally no one builds that many minelayer ships but the Nampo is unique in that its design is based on the recently introduced South Korean FFX Frigate. The first of these entered service in in 2013. The FFXs are 3,200 ton ships armed with a 127mm gun, eight anti-ship or cruise missiles, three torpedo tubes, a RAM anti-missile launcher, and a Phalanx anti-missile gun system. There is space aft for two helicopters. The ships are highly automated, requiring a crew of only 140. Top speed is 61 kilometers an hour. Range is 8,000 kilometers. Most of the equipment (including electronics) and weapons are locally built. South Korea in building at least fifteen of these ships. South Korea subsequently introduced an upgraded FFX 2 frigate design. South Korea hopes to export the FFX to many navies who want a quality, low cost, warship. Meanwhile, South Korea has also built larger warships and is getting more into submarine production.

North Korea is believed to have stockpiled more than 50,000 naval mines, most of them of the bottom mine variety although it is unclear how well maintained that mine arsenal is. That is a small arsenal compared to Russia (over 200,000) and China (over 100,000). Iran has a few thousand naval mines which is believed to be smaller than South Korean stockpile. It is generally agreed that all these mines are a serious danger. While often ignored, naval mines are a formidable weapon. But these passive weapons just don't get any respect. The historical record indicates otherwise.