Chinese support could tame North Korea without a war

North Korea Economic Highlights (source Wikipedia etc)

·        NORTH KOREA GDP of USD 25bn (2015 nominal). That is roughly 0.1% of USA’s GDP.

·        North Korea’s nuclear program and weapons sales represent 40% of the nation’s economy,

·        Financers of business in North Korea -  mainly small banks in China, Singapore, Vietnam and Hong Kong.

·        Exports of North Korea $4bn

o   The CIA World Factbook said China accounted for an estimated 67.2% of North Korea's exports and 61.6% of imports in 2011. South Korea accounted for 19.4% of exports and 20% of imports, while India received an estimated 3.6% of exports and the European Union provided about 4% of imports in 2011.

Why a war with North Korea looks unlikely?

·        Reports suggest that South Korea doesn’t want war with North Korea because of large scale destruction to Seoul in spite of a certain victory. https://www.nytimes.com/2017/04/11/world/asia/south-korea-north-military-strike.html

·        Given this backdrop, it would be easier to choke North Korea financially especially with China seemingly supporting the US. China yesterday returned North Korean coal ships rejecting imports from the country. Although the ban on North Korean coal imports into China was placed on 26^th February. Thus the likelihood of North Korea going to war with the US, reasonably seems low. But then we do not know how reasonable the North Korean dictator is.

·        200k US citizens stay in South Korea and till now there hasn’t been any directive to them to vacate the country. This will be the first sign of US planning strikes.

·        South Korea currently doesn’t have a head of state to credibly take decisions on military strikes. South Korea goes to polls on 9^th of May 2016.

JPY appreciation could have been allowed in exchange of US extracting Chinese support to curb North Korean nuclear program and moving US navy in the Korean Peninsula. Japan has always felt threatened by its neighbour North Korea.