China’s Xi warns against regional chaos amid Korea tensions

Kospi, won falling as tension mounts

Chinese President Xi Jinping said no country should be allowed to instigate regional chaos after North Korea’s mounting threats to attack the U.S. and South Korea included warnings of pre-emptive nuclear strikes.

“No one should be allowed to throw a region and even the whole world into chaos for selfish gains,” Xi said today in a speech at the Boao Forum for Asia in Hainan. “While pursuing its own interests, a country should accommodate the legitimate interests of others.”

China, North Korea’s biggest trading partner, has advocated talks to ease tensions that escalated after Kim Jong Un’s regime detonated a nuclear device in February in defiance of tightened United Nations sanctions. UN envoy Susan Rice last week said the U.S. is pushing Xi’s government to “do more” to rein in its ally. In an effort to reduce strains, the U.S. delayed a test of an intercontinental ballistic missile.

“While President Xi didn’t refer to North Korea, it is fair” to interpret his comments as directed toward the Korean situation, said Fang Xiuyu, a professor of Korean studies at Fudan University. “Xi’s remarks are the most decisive comments so far from the Chinese side of the issue.”

South Korea’s Kospi index fell more than 3 percent last week and the won dropped about 1.5 percent as North Korea said it was poised to conduct a “smaller, lighter and diversified nuclear strike.” Kim’s regime maintains that joint South Korean-U.S. military drills that go on until the end of April are a rehearsal for a nuclear attack against it.

‘Selling Climax’

“Last week probably marked a selling climax,” said Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $29 billion. “The Kospi index is likely to stabilize and then try to rebound. There’s little chance of North Korea actually taking provocative actions.”

U.S. Defense Secretary Chuck Hagel decided to postpone a scheduled April 9 test of a Minuteman III intercontinental missile from California’s Vandenberg Air Force Base to avoid exacerbating tensions, according to a Defense Department official who asked not to be identified. The test is being rescheduled, and probably will occur next month, the official said.

While the planned test wasn’t related to this month’s annual joint military exercise with South Korea, an administration official with knowledge of Hagel’s decision said the defense secretary and other administration officials concluded the U.S. had sent North Korea sufficient signals about its readiness to deliver a devastating response to any nuclear or conventional aggression by the regime. The official spoke on condition of anonymity because of having access to classified intelligence.

Avoiding Misinterpretation

In the last week, U.S. officials have taken care to publicly discuss only defensive weapons in relation to tensions on the Korean peninsula and were concerned Kim would misinterpret a Minuteman test as a sign the U.S. and South Korea were preparing a pre-emptive attack to destroy North Korea’s nuclear weapons facilities, the official said. A Pentagon spokeswoman yesterday denied Internet reports that the U.S. had deployed B-1 bombers to Guam for the same reason, the official said.

In calibrating its response to Kim, the U.S. has little or no insight into the Communist leader’s thinking and isn’t even certain of his age, the official said. Some U.S. intelligence officials think Kim may have concluded that developing a nuclear arsenal is the only way to guarantee survival of his family’s third-generation Stalinist regime, and that the U.S. and South Korea may intend to destroy his nascent nuclear and ballistic missile programs so North Korea remains vulnerable.

China’s Position

U.S. officials say they hope Secretary of State John Kerry can enlist China’s help in defusing the Korean situation during his April 13 visit to Beijing, the official said. China has publicly signaled its desire to lower tensions in Korea and its support for denuclearizing the Korean peninsula.

China is “seriously concerned” about the rising tensions, and will safeguard the rights and safety of its citizens in North Korea, Foreign Ministry spokesman Hong Lei said in a statement on the ministry’s website. The Chinese embassy in Pyongyang is under normal operations, he added.

His statement came after North Korea last week asked countries including Russia and the U.K. to consider evacuating their embassies from the capital, warning that they can’t be protected. North Korea told South Korean companies in the jointly run Gaeseong industrial complex to leave by April 10.

Missile Warning

South Korea today said Kim’s regime may fire a missile on or around that date. President Park Geun Hye is ready for any provocation, according to the statement from spokesman Kim Haeng, citing national security chief Kim Jang Soo.

Australian Prime Minister Julia Gillard, who met Xi today at the Boao Forum, said China’s president told her he shares concerns about North Korea and that the priority is to prevent further escalation. Gillard, speaking at a press briefing, said Xi told her China doesn’t want to see conflict and that his aspiration is to denuclearize the Korean Peninsula.

While China and the U.S. last month agreed on tougher UN Security Council sanctions against North Korea after its nuclear test, American officials have traveled to Beijing to seek commitment on implementation.

“Clearly, with the border that they have, with the economic relationship that they have, they can do more,” Rice said in an April 5 interview with MSNBC.

‘Too Jumpy’

The Obama administration is seeking “a de-escalation of these tensions,” she said, adding the U.S. wants to convey the message that it can defend itself and its allies without “getting too jumpy.”

In his speech today, Xi also said that the right of countries to independently choose their social systems and development paths should be respected and that non-Asian countries should respect Asian diversity. Countries from outside Asia are welcome to play a constructive role in regional stability and development, Xi said.

His admonition against regional disorder “is a tough warning to the Kim regime not to escalate tensions,” said Willy Lam, an adjunct professor of history at the Chinese University of Hong Kong. “I think this warning also has implications for the U.S. and South Korea to cool it a little bit and not to provoke the Kim regime.”

Bloomberg News

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