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China’s reaction to the turmoil on the Korean Peninsula

Rob Schmitz Nov 24, 2010
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China’s reaction to the turmoil on the Korean Peninsula

Rob Schmitz Nov 24, 2010
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STEVE CHIOTAKIS: A U.S. aircraft carrier is now on its way to the Korean peninsula. President Obama and the South Korean president agreed to hold joint military exercises as a response to North Korea’s shelling of a South Korean island. There’s a business angle to all this as well. Which involves China. Because China’s the largest economy in the region. China is one of North Korea’s only allies, but it’s also an important South Korean trading partner.

From Shanghai, here’s Marketplace’s Rob Schmitz.


ROB SCHMITZ: So far, China’s taken a ‘why can’t we all just get along?’ approach to the conflict. It’s called for a return to the six party talks between the main countries in the region. There’s not much else it can do, says Cai Jian, professor of Korean studies at Shanghai’s Fudan University.

CAI JIAN: China supports North Korea, but that doesn’t mean we support North Korea against South Korea. South Korea is too big of an economic partner to China, and that’s crucial to China’s economic development.

South Korea is China’s third largest trading partner. In fact, South Korea is running a $30 billion trade surplus with China, thanks, in part, to China’s enormous demand for Korean automobiles. Economically, North Korea isn’t doing much for China — nor for anyone else. Still, China continues to support North Korea because it doesn’t want an American military presence along its border should the country collapse. All of this means that if China’s grumbling about North Korea’s provocative behavior, it’s doing so behind closed doors.

In Shanghai, I’m Rob Schmitz, for Marketplace.

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