On May 30th, a North Korean high-level source reported, “North Korea asked China for an aid that included food and oil at the North Korea-China Economic Summit, but the request was not accepted.”
According to the source, the most important meeting of Kim Jong-il’s trip was the economic talk with Wen Jiabao in Beijing. The closed meeting on 25th was attended by 8 delegates from North Korea, including Kim Jong-il, and 9 delegates from China, including Wen Jiabao. The primary goal of Kim Jong-il’s trip was to secure a firm promise of economic aids from China.
At the talk, Kim admitted the necessity of North Korean reform which included opening up its markets, but at the same time stressed that “assurances of Chinese support should be a precondition to any reforms,” said the source.
In stressing the importance of the economic aid, Kim said the main cause of the 2009 North Korean currency reform failure was “the Chinese non-fulfillment of promises of economic support,” said the source.
At the time of the currency reform, North Korea relied on Chinese promise of 100 million Yuan in comprehensive economic assistance, but when the assistance did not come, North Korea faced a severe shortage of raw materials, resulting in the rise of the exchange rate which led to the failure of the currency reform.
Kim met with Wen again to pressure Chinese for an assurance of substantial aid of foods and crude oil. However, Wen turned Kim away without promises by saying “that matter should be solved through normal economic exchanges,” and, “Why don’t we discuss about the drilling contracts for development of North Korean oil resources?” said the source.
What Kim got from Wen was the promise that Chinese government will cover 80% of the investment made by private Chinese companies for exploration of mineral resources in North Korea. However, this is the same deal that Lee chul, the director of North Korean Committee of Investment and Joint Ventures, worked out with Department of Commerce of China on February 15 of this year.
Kim Jong-il voiced his disappointment in China’s repeated demands of North Korean reform and opening up of its market without a promise of economic aids. In the afternoon on the same day, Kim raised this issue again with Chinese President Hu Jintao. However, Hu refused to discuss the issue with Kim Jong-il and simply said, “I’d like you to discuss economic matters with Wen Jiabao”, said the source.
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