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North Korea’s triumph in the standoff with the United States may be short-lived. The strategic value of its nuclear deterrent is questionable, as it has profoundly alienated China, North Korea’s long-time ally. At the same time, the regime in Pyongyang continues to dig its own grave with its failed economic policies.

Symbol: Flags of the US and North Korea

Much of the analysis of the most recent round in the North Korean nuclear standoff has handed it to Pyongyang, putting the blame for the escalation of tensions on the US president. Stephan Haggart has gone as far as calling the North Korean move to announce a salvo of four missiles directed against Guam as the next test „high risk but masterful.” While we have no sympathy for the way Donald Trump has blundered his way through this crisis so far, we beg to disagree with the notion that North Korea has “won.”

North Korea’s leader Kim Jong-un may be enjoying his latest triumph over the international community after two recent successful tests of its new long-range Hwasong-14 missiles. One has to admit that so far, he has played his cards very well. He has been able to extract the money needed by any means possible, fair or foul. His dynasty has held on to power, and it has been able to get its hands on nuclear weapons and long-range missiles.

Yet from our point of view, Pyongyang’s approach has insurmountable flaws. Kim seems to overestimate the strategic value of its nuclear deterrent. And he seems to underestimate that North Korea is its own worst enemy due to its economic failure.

Washington will have to live with North Korea’s threat

Pyongyang now demonstrably has Intercontinental Ballistic Missiles (ICBMs) capable of reaching the United States. According to some intelligence reports, it may already have produced a miniaturized nuclear warhead that fits inside its ICBMs. As soon as the regime is also able to build a re-entry vehicle that can carry the warhead through the upper atmosphere without disintegrating, North Korea would be able to threaten Los Angeles, Chicago or even Washington, D.C. North Korea thus seems to be within reach of the ultimate red line that US governments have drawn – presenting a nuclear threat to the United States.

So what? The notion of the Trump administration that the United States could not accept to be vulnerable to North Korean nuclear weapons is quaint: after all, it has long been vulnerable to such weapons from the Soviet Union, now from Russia, and from China.

More importantly, America’s allies in East Asia, in particular South Korea, have long been vulnerable to a devastating North Korean military attack: Pyongyang’s 15,000 fairly old-fashioned artillery pieces that are deployed along the 38th degree armistice line (remember, there is still no peace agreement between the two Koreas) could do as much damage as a nuclear warhead to South Korea’s capital Seoul, in which a quarter of the South Korean population is concentrated.

If the United States were to accept its vulnerability as South Korea had to do already, the question becomes: what use is North Korea’s nuclear armory? Sure, it can serve as a deterrent against any attempts at invasion or regime change by military intervention, as in Iraq – but neither Washington nor Seoul have any serious inclination to try that. More importantly, North Korea’s nuclear weapons might drive a wedge between the United States and its allies, undermining Washington’s security guarantees to South Korea and Japan. Yet again, it would depend on factors outside of North Korea’s control whether the US-led alliances disintegrate or not: NATO, which faced a similar predicament in Europe during the Cold War, certainly did not disintegrate: the Warsaw Pact did.

Pyongyang pays a high price for its nuclear program

On balance, therefore, it is far from obvious whether North Korea can draw any strategic benefit from its nuclear program. And the program has a high price tag, both politically and economically. Politically, the program has profoundly alienated China, drawing it into a complicated conflict with the United States that Beijing would rather avoid. So far, Beijing has followed its own “containment” strategy towards North Korea’s nuclear challenge, which has prevented a major crisis at the border but has also allowed the regime to survive and develop its nuclear weapons. China’s ultimate goal is very much like Washington’s and Seoul’s: a peaceful solution to the conflict and the denuclearization of the peninsula. But as North Korea’s neighbor, Beijing will do all it can to prevent a major crisis at its borders, which could result in a huge refugee influx of refugees into the country’s Northeast. Comprehensive sanctions meant to cripple the North Korean economy are thus out of the question.

Yet China’s policy towards Pyongyang has long been guided by its relationship with the United States, and that will likely continue. When Beijing signed on to new sanctions imposed by the UN Security Council in August 2017, it did so to signal Washington its willingness to cooperate. At the same time, China is also keen to avoid unilateral “secondary sanctions” by the United States – measures targeted against those who deal with North Korean entities. Washington has already sanctioned a small number of Chinese firms for their financial ties to North Korea’s military and has threatened to impose further sanctions against a broader swath of Chinese banks and firms with ties to the Kim regime if Beijing does not cooperate and comply with UN Security Council resolutions.

Pyongyang’s biggest problem is that the regime is continuing to dig its own grave with its one-sided pursuit of its expensive nuclear program. All its military bluster will not enable the Kim family dynasty, a regime that is as economically illiterate as it is brutally effective in repression, to survive, given the desperate shape of its economy. Over the last years, Pyongyang has been forced to free much of its economy from state control to enable its people to survive. The result has been the arrival of markets, of proto-capitalism, of rampant corruption and a new class of profiteers, many of them insiders. Over time, the lure of wealth will unleash forces of change that Pyongyang will find hard to control.

In that sense, for Pyongyang, the enemy is already inside the gate. On the Korean peninsula, change seems destined to come from within North Korea, whose regime might one day collapse or, in the best case, be hijacked by a new class of capitalists. The worst case, of course, would be a war that nobody seriously wants, Pyongyang’s blood-curling rhetoric notwithstanding.