If you have North Korea with one-thirtieth of the economic strength of South Korea and half the population, and if that state is surrounded by three successful powers economically and militarily--Japan, South Korea and China--and if we are backing them, it seems to me the tides of history are on our side, not on theirs. And it seems to me, too, that over the past 10 years we've been working very hard to get cohesion with our friends and allies in the area to bring effective pressure to bear on North Korea to change its behavior. What do I mean by that? Well, first of all, Sun Tzu, the old Chinese strategist, said, if you get involved in one of these things, know your enemy. Know your opposite number. What is North Korea up to in stark terms? Survive, remain in power, keep an iron grip on the people, and we know from high defector reports that Kim Jong Il is a control freak, number one. Number two, we know he's trying to help win an election for himself by backing the ruling party in South Korea and a possible trip by Kim Jong Il to South Korea to buoy up the existing party. So far, that has backfired on him in South Korea. He wants to exploit what they perceive as widespread anti- Americanism. They are attempting to exploit U.S.-ROK differences, and they're going to play the nationalist theme. That's obvious. We know that. I think they're also going to try to get former President Clinton to North Korea after the U.S. 2008 elections, and try to get back to the two light-water reactors and of food and oil, the 500,000 tons of heavy oil a year and perhaps $700 million of food aid, largely unmonitored. They're going to make enough short-term concessions to keep food, energy, money coming in, principally from South Korea and China, and they're going to try to split five-power cohesion, pointing the finger at the U.S. as the cause of tension.
The trend of policy in North Korea has evolved from a massive intervention in 1950 through frequent terrorist threats and actions to its current strategy. What did they try to do in the past? Let's look at it, briefly. In 1968, they tried to send a team in to assassinate President Park Chung Hee. It failed. In the 1970s, they built tunnels under the DMZ. It failed. In 1983, they tried to kill the South Korean cabinet in Rangoon. Half of them got killed; half of them didn't. In the 1990s, they started their submarine infiltrations into the South, and the first submarine hit a reef. The infiltration team ran to shore and all committed suicide. My friend in the Center for Naval Analyses said, bad seamanship, strong morale. Now a tactical change is taking place with this focus on weapons of mass destruction. Their threat of proliferation is more effective means to survive, but still is single-minded on their part. It's quite clear they're going to try to keep their nuclear weapons to the extent they can.
They have, however, been forced into ostensible economic reforms, and we note that in their New Year's address this year, 2007, they stress the economic first over their fascination with putting the military first. This has led to unexpected consequences for them: the creation of the Kaesong Industrial Zone, with a number of Korean companies pushing in there, hiring North Korean laborers, setting up factories, expanding the presence, expanding the whole area. And we know for a fact--and I know this certainly personally--that this is the way China changed economically. It's starting in North Korea. Inchon Airport, if you've been there, Mr. Chairman, I'm sure, it's one of the best airports in the world. It makes JFK look like something in Indonesia in 1957. It's there sitting right next to the border, the DMZ. It's obviously a force of history. If you've gone through that North Korea airport at Pyongyang, it could fit into one- fiftieth of the Incheon Airport. That's a trend. You'll see increasing Chinese trade relations in North Korea. They're all over the place; businesses flowing in. They're setting up a glass factory. They're everywhere. It's increasing, much to South Korean concern. And we also see growing consumer goods availability in North Korea for the lead class. Going into other powers, we all know that a fragile but aggressive North Korea, if it implodes, has negative consequences for its neighbors. I think this is particularly appreciated in Peking. Millions of refugees flowing into Russia, South Korea, China are going to cause great consternation all over the area. A unified Korea under Seoul allied with the United States is a nightmare for China--certainly. To have these horrible warlords--Kim Jong Il is one thing. Those stone-faced men that sit there with medals from their neck to their groin--if they get their hands on nukes, you've got a real problem.
But you have to realize in dealing with this problem that China has long, intimate, intense relationships with Korea and with North Korea. One instance--I think we should pay attention to this because it's talked about as the Northeast Project in China. They have laid claim to the entire North Korean part of the peninsula through what they say is the Koguryo dynasty discussions debate. South Korea says no such thing--that's our dynasty. The South Koreans know that--and we who follow China know that it's an allegory that makes a lot of sense in the Cultural Revolution and other times--that when they start using allegories, pay attention, because what they're saying is that territory by definition belongs to us. A, if you collapse, we move in with justification. That really is a shot across the bow.The Chinese involvement in the Imjin defeat in 1596 of the Japanese invasion by Hideyoshi--the Chinese helped the South Koreans do it. They did. The role of China in suppressing dissent on the Korean Peninsula, they certainly did that, too, in the Tonghak rebellion. And China rescued North Korea in 1950. MacArthur had knocked them flat on their back. They were finished. Kim Il Sung was sitting up there on a mountaintop with his medals on, trying to give orders. Nobody paid any attention to him. China came in and bailed him out. They haven't shown one ounce of gratitude for this. And China tried to set up free trade zones in North Korea in Sinuiju, up on their border, and they moved it down to Kaesong, and the Chinese, I think, heaved a tremendous sigh of relief because--(name inaudible)--had gone to Kim Il Sung and said, "Don't put it here," because the Chinese knew very clearly who the North Koreans were going to pick: Yam Bin, who was in a Chinese jail for 17 years on corruption. It would turn out to be a center of prostitution, drugs, counterfeiting, everything else, and China pushed it over to Kaesong. So--and I do give you here two, I would say, illustrative examples of differing opinion in China. One, Sun Ding Lee (ph) comes out and says North Korea is an essential buffer zone to China. And we need it to offset the Americans if there's a crisis in the Taiwan Strait. He says that right out. The second Chinese comes in and says, it's far less of a strategic buffer zone than it was in the past. If sanctions don't move North Korea, China will use a variety of means to accomplish this goal, including coercive diplomacy and perhaps, ultimately, regime transformation. All I'm saying is, in China--and I found this out when I was there in 2004--there's a propagandistic level where they talk, and this is very depressing to hear. The problems in the Korean Peninsula started with American involvement in the Korean civil war and it goes downhill from that. If you get the second level, you hear people talking very frankly about North Korea. "Americans, don't lecture us on it; we know better than you what they're like." And third, if you talk to some of the military people, you get a sense that they will not stand still for North Korea, really trying to create instability by going to the missile and nuclear business in a series of tests. I would like to point out to you that given the North Korean intentions, the six-party talks are a nightmare for them. And what they've done is provoke the increasing cooperation among the five other powers, especially after their nuclear and missiles tests, and U.N. resolutions, with Chinese and Russian support--never done before; first time. China has moved troops to the North Korean border; they've inspected vehicles going to North Korea; they've shut down some of the North Korean bank accounts. That's just a beginning of what they've done. South Korea has suspended fertilizer and food shipments; the revenue from the Macau banks suspended, which hits the North Korean elites. We are trying to stop, of course, the narcotics and counterfeiting. And ASEAN has kicked in again, telling the North Koreans--this is Association of South East Asian Nations--to stop the nuclear program. And even Vietnam, where the South Koreans worked with us in the Vietnam War, has come in and started put sanctions on North Korean banks.
The above actions lead to a loss of face and sustenance in North Korea. They have turned, as you pointed out, to a highly rich uranium program and we put restrictions in the bank. But we know that the North Koreans--the result of these things. We can't be jerked around by what they're doing. The latest speech they make--what they're building and their nuclear weapons--that's important, but don't let them take the initiative on this. They will resort to their standard practice of signing agreements, then adding conditions and then blaming the other side for the breakdown. This is standard. We looked at their negotiating tactics for 50 years. That's the way they act. No surprise. They are--North Korea is also seeking to find fellow travelers-- united front work, support and create a new generation of Korean-oriented Edgar Snows, to explain to the West what North Korea really is, and it's bunk.
But I still insist, the accumulation experiences and attitudes indicate that the North Korean extreme, sudden violence has been curtailed and that economic reform is eating into their system. They are beginning to pay a price, right now, for their behavior and it's really hurting them. One tendency is to go all the way and force your hand by carrying out the nuclear test. The other one is see this accumulation of pressures and leverage on them. I think it's very important that the United States be careful of what it says on this issue because we never want to get on the wrong side of the unification issue. I had this argument many times with the South Koreans. They said that Rusk and Bonesteel divided Korea at the 38th parallel in 1945 and that was the essence of the problem. I pointed out that many, many Americans died in 1950 trying to unify that country. Conversation stopped. But I think basically there's a trade-off among the powers now, in terms of what we're trying to get done in North Korea. Counterproliferation, as Secretary Perry points out--this is our number one concern. They put those weapons in the hands of the crazy al Qaeda, et cetera. What we have to do is to get our friends and allies--and the Chinese have come along, two-thirds of the way on this, and the South Koreans perhaps half--to work with us to stop proliferation, in the Proliferation Security Initiative, but other ways--inspecting their cargoes, alerting people intelligence if they get a tip-off, boarding the ships if you have to, checking them as they go through China in air and land. I think we've got this moving. But the purpose in all of this would be to allow South Korea and China the opportunity to carry out what they might consider the transformation of the regime through policies which they believe can lead to economic influence and seduction of the North Korean state. Ergo, they're looking for more time; we're looking for immediate action. That is a negotiator's challenge. And we've come a long way in pulling together on this thing and beginning to get countries to work together.
I think--our indications are that we are going to try to transform the policies, if not the system. While recognizing that North Korea will fight relentlessly to get the goods but keep contamination out and stage spectaculars to grab attention--and we find this to be true. But we also find to be true, if you examine the track record of what the North Koreans did under Kim Il Sung and what they did under Kim Jong Il, there is a difference. There's a difference. They tend to be somewhat more cautious now in terms of what they do. Kim Il Sung would shoot down a KC-135; he would seize the--(word inaudible). He would take axe murders in the DMZ in 1976. He would do these things. You find a hesitation now to get involved that deeply. Kim Jong Il doesn't seem ready to take those chances, and I think it's the accumulation of pressures on him, where he knows that he is going to be forced to give his people a better deal. Finally, I just indulge myself in quoting one of the great passages in the Bible, John 8:32: "And you shall know the truth and the truth shall make you free." It's emblazoned on the wall of CIA where I worked for a number of years, and I wish they took it more literally. The North Korean version of this is, "Keep the truth out and you can survive unfree." Thank you.