By Donald Kirk

SEOUL – North Korea seems to be playing the China card for all it’s worth – in multi-billions in aid and investment – to overcome United Nations sanctions and pressure for Pyongyang to get rid of its nuclear program.

A report in South Korea about China investing US$10 billion in North Korea’s dilapidated economy has analysts worrying that such a deal could negate the impact of promises of that much money in energy aid as a reward for North Korea giving up its nukes.

American corporate lawyer Tom Pinansky, at a luncheon of the American Chamber of Commerce in Seoul, raised the issue in a barbed question to South Korea’s ambassador to the US Han

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Duk-soo. What would happen to six-party talks in which the lure of massive aid is the bargaining tool, if China is going to give the North all the aid it wants anyway?

Han, a former prime minister with a long background in economic and foreign affairs, more or less equivocated. There was nothing to substantiate the report, he said, indicating that China, as host of the six-party talks on North Korea’s, was cooperating on sanctions.

The sincerity of China’s avowed desire for North Korea to return to six-party talks, though, is increasingly open to question. While North Korea turns to China for relief from economic collapse, China in turn seems to be playing the North Korean card against the US, South Korea and Japan at a time when their always shaky relations are more strained than ever.

Might China’s deal with North Korea scuttle the “grand bargain” that South Korea’s President Lee Myung-bak is proposing? “Only in dismantling the core component” of its nuclear program, said Han, would North Korea get the aid it needed. “Without Pyongyang’s concrete denuclearization measures,” he made clear, “sanctions will continue”.

The North Korean nuclear issue “requires closer coordination and cooperation”, he said. “Korea and the US must work closely.”

But what about the China factor? South Korea’s Yonhap news agency reported that Wang Jiarui, the international chief of the Chinese Communist Party, reportedly sealed the deal when he was in Pyongyang this month purportedly to get North Korea to return to six-party talks for the first time since December 2008.

The trip went so well that ailing Dear Leader Kim Jong-il accorded Wang the privilege of posing for a formal photograph with him – a sure sign that Wang had to have been offering some enticing lures. It was well known that an economic team that accompanied Wang had critical talks on topics ranging from banking to infrastructure, but Yonhap was the first to attach a figure to all the good things going North Korea’s way.

Kim Jong-il had no problem making Wang look like a highly skilled diplomat, sending him back to Beijing with the headline-grabbing assurance that he wanted nothing more than a denuclearized Korean Peninsula. He’s been saying that for years, but the media still reported it as if were news.

The real news evidently was that China, eager to rescue the North from economic collapse, may be sparing its North Korean comrades the need to have to make serious concessions about their nukes. As The Korea Times editorialized, “It is well known China would rather have a nuclear-armed North Korea than a completely collapsed neighbor.”

China, though, is not just trying to “save North Korea”. Beijing also sees North Korea as a strategic partner or at least a foil to play against the US while the US upsets China with moves that China sees as a threat, symbolically and in real terms.

How better to send a message to Washington than to have Chinese officials and analysts spreading the word that China is tightening ties with its old ally, whom Chinese troops rescued in the Korean War? And why would China want to do that?

Two immediate reasons come to mind. One is US President Barack Obama’s refusal to yield to Chinese demands not to see the Dalai Lama. Obama saw the exiled Tibetan spiritual leader on Thursday in an affront that put Washington in line, in the Chinese view, with interests that want to undermine Chinese rule. Obama’s meeting with the Dalai Lama was studiedly non-controversial, in no way committing the US to doing anything about Chinese rule over Tibet, but it showed US concern about Chinese abuses.

More annoying to the Chinese than the Dalai Lama’s call on Obama was the US commitment to sell $6.4 billion in arms to Taiwan.

China’s relations with the island province, which it always claims as its own, have improved greatly in recent years. Trade now goes on directly between Taiwan and the Chinese mainland, no need for sending everything via Hong Kong, and tourists come and go. Still, the specter of the US arming Taiwan with sophisticated weaponry for a non-existent war that does not appear to be about to break out is highly discomfiting to Chinese leaders.

And there are other disturbing issues. China balks at US demands to revalue its money so Chinese exports will cost more on foreign markets, making American goods more competitive and maybe reducing the enormous imbalance of trade. In a grand total of approximately $400 billion in annual trade between the two countries, for every dollar the US makes selling products to China, the Chinese make five dollars exporting to the US. China also holds $755 billion in US Treasury bills – a staggering figure that has a lot to do with keeping the US economy afloat in hard times.

Considering all the money they’re making off the US, the Chinese don’t want to mess up a good thing by provoking a crisis – or a wave of anti-Chinese sentiment. Still, there may be no better device for getting Washington’s attention than to moot the idea of aiding and abetting North Korea without saying so in so many words.

North Korea for the Chinese is an instrument tuned and ready for strumming any time. China’s nuclear envoy Kim Kye-gwan followed up Wang’s visit to Pyongyang by going to Beijing and talking with Wu Dawei, former vice foreign minister and now the North’s chief nuclear envoy.

Like so many other missions, Kim’s call on Wu raised expectations that China would get North Korea on board for six-party talks. North Korea may have had the same idea – in reverse. Could Kim and Wu have been talking about China pouring in all that aid while North Korea stood fast in its demand for an end to sanctions before returning to talks?

The next stop for Kim Kye-gwan might be Washington, or at least the North Koreans think so. The State Department denies any plans for receiving Kim, whose purpose in going there would be to drive home North Korea’s demands, which also include negotiations for a peace treaty to replace the Korean War armistice.

It was talks on those issues that Kim Yong-nam, whose title of chairman of the presidium of the Supreme People’s Assembly makes him North Korea’s titular head of state, doubtless had in mind when he called for “an end to hostile relations” with the United States “through dialogue and negotiations”.

The betting in South Korea is that North Korea will still have to agree at least to return to six-party talks on its nukes, even if the talks go nowhere. Starvation and disease in North Korea are not on the same level as they were in the 1990s, but the signs are not good. Dwindling food supplies disappear in the winter, and by spring it’s much harder to find food.

Time is running out for face-saving. With China on his side, however, Kim Jong-il may believe he’s got time on his side as well.

Donald Kirk, a long-time journalist in Asia, is author of the newly published Korea Betrayed: Kim Dae Jung and Sunshine.