In the last few years, the Singapore government has increased
its investments in the three northeastern provinces of China –
Liaoning, Jilin and Heilongjiang with the latest project in the
pipeline being a food farm twice the size of Singapore in
Jilin.
Major cities in the region such as Shenyang and Dalian have
received substantial amounts of Singapore investments too including
nearby Tianjin where Singapore is currently building an eco-city
in.
Northeast China is touted as the next frontier in China’s
economic miracle as it had been neglected largely during its boom
years in the 1980s and 1990s which focused on the Special Economic
Zone (SEZs) and coastal cities in the Pearl and Whampoa Deltas.
On paper, Northeast China is an attractive investment
destination due to its relatively low cost of doing business, high
educational level of the people and its proximity to South Korea
and Japan.
Unfortunately, the rise in tensions between the two Koreas
present a potential threat to stability in the region which will
retard its growth should an armed conflict breaks out.
Relationship between North and South Korea has reached a nadir
under the South’s current President Lee Myung-Bak who has eschewed
the “sunshine policy” of his predecessor and adopted a tough stance
against the North.
The sinking of the South Korean corvette “Cheonan” purportedly
by a North Korean torpedo may spark a wider conflagration engulfing
the entire region.
While the South has shown restrain in its response so far, the
North has struck a belligerent note so far, threatening “all-out
war” if South Korea were to take any punitive actions against
it.
In retaliation, South Korea has resumed its psychological
warfare against the North and pull out of the joint inter-Korea
industrial complex in Kaesong.
Though hawish voices within the South Korean government are
calling for a putative strike against the North, Seoul’s immediate
reaction is likely to focus on more economic sanctions which will
hardly have any effect on the regime in Pyongyang.
North Korea’s attack on the South may have stemmed from internal
turmoil looming ahead of its expected transfer of power from the
ailing Kim Jong-Il to his third son Kim Jong-Un which is not going
well as expected.
A botched economic reform earlier this year supposedly
spear-headed by the younger Kim sparked massive public
protests across the country prompting the North’s Prime Minister to
apologize and the Finance Minister executed by the firing
squad.
Kim Jong-Il reportedly suffers from end-stage kidney failure and
may not have more than three years to live, according to North
Korean defectors.
A succession plan gone awry in the Stalinist state may trigger a
much-feared internal implosion and collapse with refugees spilling
across the border into China, thereby destabilizing the entire
region.
There is a sizeable Korean minority in Jilin province in the
cities of Yanji, Ji’an and Tumen which were previously part of the
“Gando” region ceded to Japan when Korea was annexed in 1910.
An uncontrollable influx of North Korean refugees across the
Yalu and Tumen rivers into China’s Northeast will radically alter
the demographics of its border cities, a situation which Beijing
will not want to find itself stuck in.
In the worst-case scenario, the North may launch its nuclear
warheads on the South, reigniting a second Korean War which will
surely end all economic prospects in Northeast China.
In the light of fast escalating tensions in the Korean
Peninsula, it may be prudent for Singapore to review its future
investments in the region till the political situation has
stabilized.
An inter-Korea conflict which will have widespread
repercussions in the Asia-Pacific is not that far-fetched
judging from the recent turn of events and the impending demise of
North Korean leader Kim Jong-Il.
http://www.temasekreview.com/2010/05/26/inter-korea-conflict-may-endanger-singapores-investments-in-northeast-china/