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Strategies & Market Trends : Asia Forum

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To: Bosco who wrote (9431)10/28/1999 2:50:00 AM
From: CIMA  Read Replies (1) of 9980
 
China Resurrects "Lips and Teeth" Metaphor

Summary:

General Fu Quanyou, China's chief of general staff of the
People's Liberation Army (PLA), resurrected the traditional phrase
"as close as lips and teeth" in describing relations between China
and North Korea on Oct. 22. Fu was speaking at the North Korean
Embassy in Beijing on the 49th anniversary of China's participation
in the Korean War. The resurfacing of the lips and teeth metaphor,
used widely before China's decision to formalize ties with South
Korea in 1992, is, in part, an economic tactic aimed at increasing
foreign investment in China without loosening economic controls.

Analysis:

On Oct. 22, General Fu Quanyou, chief of general staff of China's
People's Liberation Army (PLA), resurrected the Cold War metaphor
used to describe relations between the two nations. Speaking at the
North Korean Embassy in Beijing on the 49th anniversary of China's
participation in the Korean War, Fu referred to ties between China
and North Korea as being "as close as lips and teeth." Fu's remark
comes amid a general rebuilding of the friendship between the two
nations, which deteriorated during China's economic opening and
reform in the early 1990s. The reversion to the terminology of pre-
economic reform China, coupled with China's apparent backtracking
on economic opening, suggests that Beijing may be re-evaluating its
foreign policy.

If Fu had made the comment 10 years ago, it would have aroused
little attention. After the Korean War, the nations talked of ties
sealed with blood and described their nations "as close as lips and
teeth." However, in the early 1990s, with the process of economic
opening in China overpowering traditional ideological ties between
the nations, the phrase began to fade. Then, when China established
diplomatic ties with South Korea in 1992, relations between China
and North Korea began a steep decline. The "lips and teeth"
description, while not entirely abandoned, has been widely avoided
by Beijing for years.

China's pull away from North Korea was tied to its search for
economic investment. A perceived connection with the reclusive and
unpredictable North, it was feared, would scare away potential
investors. Establishing formal ties with South Korea demonstrated
that Beijing was placing a higher priority on economics than on
ideology and relations with the North.

During the past year, however, ties between North Korea and China
have been warming. Simultaneously, China has been struggling to
deal with internal instability triggered by financial stresses
brought on by the economic reform process. Under President Jiang
Zemin, China has taken a strong interest in maintaining social
stability, even at the cost of economic reform. This in turn has
threatened foreign investments in China, as it continues to close
off or tightly regulate desirable areas of investment.

Such economic concerns may be at least partially instigating the
reconnection between China and North Korea. While Fu's
resurrection of the metaphor - made during a commemoration of
China's support of the North during the Korean War - reawakens the
old fear of China holding North Korea's leash, more likely Beijing
will attempt to use the threat engendered by such fears as an
economic bargaining chip.

By taking on a closer relationship to North Korea, China becomes a
vital path for relaying concerns to the North. This, in turn, gives
China leverage with nations like Japan and the United States, as
well as South Korea. Already, China has gained economic concessions
from Japan due in part to its influence with North Korea
( stratfor.com ).

Relations between China and North Korea have not returned to the
warmth of the 1950s, nor are they likely to do so. However,
restoring relations gives China an important tool for dealing with
the United States, Japan and South Korea. These countries, all of
which have strategic interests in North Korea and China, represent
large quantities of potential investment capital for China. By
combining the strategic importance of North Korea and the economic
interests of China, the return of a "lips and teeth" relationship
may be part of an aggressive Chinese policy aimed at continuing to
receive foreign capital without having to grant concessions to
investors.

(c) 1999, Stratfor, Inc.
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