Following the money to find China's real opposition to a unified Korea?

This post on Chinese-Korean "connection" at Ask A Korean turned into an interesting discussion on what would happen with North Korea were it to collapse: Would it join China or South Korea or stay independent, and what would be the social, economic, or political forces behind whatever outcome occurred.

Bucking a major national trend in South Korea, I am cautiously optimistic about reunification of the two Koreas. That is, as long as there are legal mechanisms and economic incentives to keep North Koreans from flooding the South and also to keep southern entities from exploiting them (e.g., buying up naïve North Koreans' valuable land at lowball prices).

And my relatively cheery outlook has foundation. For example, I think President Lee has gone a step in the right direction by finding an initial mechanism for paying the bills to successfully rehabilitate Seven of Nine from her decades in the Borg. I wrote this at One Free Korea:

I applaud the tax — better to get people used to the idea of unification happening and not dreading how it will be paid for, among other reasons — but I share the concern of some at The Marmot’s Hole that the revenues for this tax might end up spent as Social Security is in the US or that there would be a temptation to apply it to cross-DMZ “enhancements” before reunification actually occurs.

Still, I’m cautiously optimistic when it comes to ROK economics and long-view projects. President Park did a lot with the money he was supposed to give to the victims of Japanese colonial aggression. What would have been a paltry per-capita sum for each victim or their family turned out to be a boon for the entire country.

There's that "cautiously optimistic" phrase again. Anyway, secondly, I think the availability of a cheap and fairly well disciplined (and not necessarily poorly educated) workforce up in northern Korea will lead many southern chaebol and smaller companies to look to the former DPRK as a source of labor. As I wrote at Ask A Korean:

... though some southern factories may be relocated to the north, what's more likely is that South Korean factories already in China or elsewhere in East Asia will be moved to the former DPRK, or factories once planned for those countries will instead be built in what had been North Korea.

Though I expect the road to be rocky, I think reunification presents great opportunities for both sides of the DMZ.

When "question" echoed my point, I decided to seek some hard numbers for a response. A cursory search reveals that forty thousand South Korean companies have an "accumulated investment" of about $100 billion. Those aren't trade numbers (which are also significant); rather, that's investment, and South Korea is one of China's largest foreign investors (occasionally clocking in at #1, I believe).

And this got me to to thinking: Could this be the real reason China is trying to block reunification (which it does, by propping up a belligerent and antagonistic regime whose leader feels animosity toward Seoul and its closest political and economic partners)?

Sure, we all know that China wants friendly buffer states surrounding its traditional Han-indigenous lands, which is why half of Mongolia is the Chinese territory called the "Inner Mongolia Autonomous Region" and Tibet is gripped in the loving embrace of Beijing. The thought of a US-friendly state on their border scares the bejeezus out of them. Aware of that, I've long espoused Washington making a grand bargain with Beijing (with the consent of Seoul, of course) that no US military bases would be placed in former DPRK territory following reunification, except possibly a small naval port in Wonsan (which is on the East Sea/Sea of Japan, which doesn't touch China) and previous PRC-DPRK agreements will be honored for at least the next ten years. Something like that; Secretary Clinton could hammer out the details with Hu.

But what if the depletion of a major source of foreign direct investment is the real reason, or at least a major factor, in Beijing blocking the two Koreas from rejoining? Does Beijing fear that many South Korean companies would close up shop and move to the former DPRK, or not even show up on Chinese shores altogether?

Have I followed the money to the smoking gun? Before you scoff at how ridiculous that sounds, please remember that Beijing deliberately skewered a nascent plan of Pyongyang's, back in 2002, for what would have been North Korea's first serious attempt at copying China's SAR (special administrative region) model:

As to the exact details of how the new zone will be established, Li says, "I am not clear." And in this case, the devil is definitely in the detail. The government plans to deport Li, his factory, and the 500,000 residents of Sinuiju to other parts of the communist country to make way for a capitalist paradise as ambitious as it is bizarre. Li and his neighbors will be replaced by 200,000 model workers, hand-picked for their technical skills, who will populate a city encircled by a yet-to-be-built wall erected to keep illegal migrants out.

Within the city limits, a kind of anti-North Korea with its own laws and elected officials will be created from scratch. Private enterprise, not state socialism, will guide the economy. A legal code enforced by imported European judges, not Kim's fiats, will regulate the community. Most of the drab, dilapidated buildings that line Sinuiju's quiet streets will be flattened, modern offices and factories built in their place.

They skewered it by quickly arresting Yang Bin, the Dutch-Chinese businessman (second richest in China back then) who'd been handpicked by Pyongyang to run the bizarre project. According to Wikipedia, he hass been sentenced to eighteen years in jail and is serving that time (unlike South Korea or the US, time in jail means time in jail).

Now we could get into a whole argument about whether turning Shinŭiju into North Korea's Hong Kong was a workable idea, but the point is that China certainly thought it might be. Perhaps (a) Yang's arrest was because L'il Kim hadn't gotten permission from Big Brother China for this major change, or (b) China didn't want the competition from this and future North Korean SARs (heh heh), or (c) China was worried that this would put North Korea on a path toward reform and perhaps eventual unification, or (d) the arrest if Mr Yang was one big frickin' coincidence... I don't know. But it does appear that they have tried to block North Korean reform in the past for some reason or another, and I think it's not unreasonable to think that just as (b) and (c) were factors in 2002, they might be in the future as well.