The North Korean Coronation Process: Who Will Become Regent After Kim Jong-un?

By Dr. Alon Levkowitz - August 20, 2024

BESA Center Perspectives Paper No. 2,299, August 20, 2024

EXECUTIVE SUMMARY: Kim Jong-un’s health problems and their implications for the continuity of the Kim family’s dynastic regime are critical issues for the North Korean dictatorship, which must prepare the next generation to rule the state. The question is, who will become the next leader if Kim Jong-un dies – his daughter or his sister??

In a dictatorship, the matter of succession is always very delicate. The deepest fear of any dictator is being overthrown, either by internal forces (competitive political elements within the state, such as military or party figures) or external forces that want to force regime change.

Leadership changes in dictatorships often include a purging of the group surrounding the leader through either exile or execution, depending on the regime’s particular modus operandi. Dictators tend to nominate only their most trusted advisors to the most critical official positions, and these supposedly loyal people are often members of the leader’s immediate family.

Bashar al-Assad, Saddam Hussein, Kim Jong-un, and other dictators are all examples of leaders who installed close family members in important positions in their regimes. With that said, Kim Jong-un has demonstrated over the years that being a near relation does not immunize a person from execution if he or she is thought to pose a threat to the head of the state (Kim Jong-un had both his elder brother, Kim Jong-nam, and his uncle, Jang Song-thaek, assassinated).

A few years ago, Kim Jong-un began to place his sister Kim Yo-jong in positions in state organs. In so doing, he began the process of legitimizing her in Pyongyang’s inner circles as well as among its allies and its adversaries. Kim Yo-jong became the face of North Korean foreign and security issues, mainly in Seoul and Washington.

In 2023, Kim Jong-un began to expose his daughter, Kim Ju-ae, to the public as a potential successor despite her youth (she is believed to be 12 years old). The elevation of his sister and presentation of his daughter demonstrate Kim Jong-un’s intention to prepare the next generation for rule, as Kim Il-sung did with Kim Jong-il.

The health of the leader is a state secret in any dictatorship, and information leaks on the subject are strictly prohibited. This reflects a fear of attempts by internal or external forces to evict a leader who is known to be unhealthy and therefore less able to protect his leadership. Kim Jong-il suffered ill health during his rule, and it became a threat to the regime’s stability. State media manipulated reports to show him as alive and leading the state, even when he was in poor health. State media similarly manipulated reports about Kim Jong-un’s health during the COVID crisis, when he went for long periods without being seen in public.

The death of the leader can also be a security issue in any dictatorship, and the deaths of Kim Il-sung (1994) and Kim Jong-il (2011) were viewed as such by the North Korean regime. In both cases, fear that internal or external forces might try to seize power caused the regime to postpone announcing the death for almost two days. During that time, the transition of the leadership was secured.

Kim Jong-un’s health, the stability of the regime, and the need to ensure that no one threatens the continuity of Kim’s family in the leadership of the state have led him to begin to prepare his heir. Daughter Kim Ju-ae might become the heir in the future, but she is too young to lead the state if her father dies any time soon. That is why he nominated sister Kim Yo-jong to assist him in the running of the state. If he passes away, she will become regent until Kim Ju-ae is old enough to rule.

Dr. Alon Levkowitz is a Senior Lecturer in Asian Studies at Bar-Ilan University and a senior research fellow at the Begin-Sadat Center for Strategic Studies.

The North Korean Coronation Process: Who Will Become Regent After Kim Jong-un? (besacenter.org)

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Growing but Limited: Iranian Economic Relations with China

In the backdrop of US sanctions and the ongoing effects of the COVID-19 crisis, economic relations between Tehran and Beijing have tightened in recent years. However, in practice, the partnership between the two sides is limited, with the growing dependence of the Iranian economy on China at its core

INSS Insight No. 1890, August 27, 2024

By Tomer Fadlon - Raz Zimmt

The tightening of relations between China and Iran is considered one of the main factors preventing the collapse of Iran’s economy, which has been subject to sanctions since the United States withdrew from the nuclear agreement in 2018. This improvement in relations began at the height of the COVID-19 crisis when the two countries signed a long-term cooperation agreement aimed at strengthening their economic ties in the following years. However, in practice, this partnership has been very limited and fundamentally asymmetric. Despite the sale of Iranian oil to China and Chinese exports to Iran, which serve as substitutes for many Western products, China does not provide a solution for most of Iran’s economic problems, including the need for infrastructure investments. The sanctions leave Iran with no real alternative to China, and China is taking advantage of this situation to exert influence through trade and to purchase Iranian oil at substantial discounts.

Iran has been developing its diplomatic relations with China since 1971, when China joined the UN and was awarded a seat in the UN Security Council. Following the 1979 Islamic revolution in Iran, China gradually became an important player in the country. China viewed Tehran as a political counterweight to the United States and the Soviet Union, an economic asset with an important market, and an extremely valuable energy source. In turn, Iran regarded China as a bulwark against the hostile West, particularly in the international arena. Iran’s diplomatic isolation led to closer ties with China, especially during the Iran–Iraq War, when Iran needed military, economic, and technological aid, which it obtained from China. After the war ended, as Iran sought to rebuild, the Tehran government upgraded its relations with China. In the last decade of the 20th century and the beginning of the 21st century, China supplied Iran with arms and technical expertise and built civilian and energy infrastructure in the country.

Economic Interests of Tehran and Beijing

In the 21st century, while Western companies abandoned Iran after economic sanctions were imposed, China did not, even expanding its influence there. Until the sanctions were removed following the nuclear agreement signed by Iran and the global powers in July 2015, China had been Iran’s primary and almost sole economic partner, enjoying commercial advantages that were not always in Iran’s favor. After the sanctions were lifted, Iranian President Hassan Rouhani attempted to attract as much foreign investment as possible and open the Iranian market to Western players. However, when the Trump administration withdrew from the nuclear agreement in May 2018 and reimposed economic sanctions on Iran, the Iranian government was forced to rely on China once again and seek Chinese assistance in circumventing the sanctions.

In October 2018, Iranian Supreme Leader Ali Khamenei stated that Iran should look to the East rather than the West. Furthermore, as the world’s leading exporter of goods, China could provide a reasonable alternative for almost any product lacking in Iran. For example, the use of smartphones manufactured by the Chinese company Xiaomi has significantly expanded in recent years, with its phones now accounting for a third of the Iranian market. This trend has extended to other sectors, ranging from technology products to textiles. Disappointment with Europe’s failure to create mechanisms that would circumvent the sanctions and facilitate business between Europe and Iran also contributed to Iran’s adoption of an eastward-facing strategy. In contrast, those in Iran who opposed greater cooperation with China argued that Beijing was exploiting Iran and enhancing its profits at the expense of Iran’s struggling economy. They emphasized that the relationship between the two countries was asymmetric and not a partnership of equals.

In March 2021, China and Iran signed a historic 25-year cooperation agreement, centered on an economic partnership between them. This agreement marked the culmination of diplomatic efforts between the countries, which had made significant progress following the historic visit to Tehran by Chinese President Xi Jinping in January 2016. The highlight of the visit was the discussion of potential Chinese investments in Iran, amounting to billions of dollars (hundreds of billions of dollars, according to some assessments) in exchange for a supply of cheap Iranian oil to China.

At the same time, however, it appears that the agreement signed by the two countries has not yet been implemented. Although China is helping Iran keep its head above water, much of the potential of the Iranian market remains untapped, particularly in terms of investments, and China is not significantly contributing to the development of the Iranian economy. Therefore, it can be said that China is playing a double game—avoiding burning its bridges with the West, especially the United States, while allowing Iran to evade the sanctions and survive economically.

Iran’s continued dependence on China, along with its role as a market for Chinese goods and an important energy source, serves Beijing’s interests very well. From the Chinese perspective, the three key reasons for strengthening economic ties with Iran today are:

1. Energy—For many years, China has viewed the Middle East as a crucial source for meeting its energy needs. Amid sanctions, the search for cheap and accessible oil has made Iran more attractive than before. The difficulty Iran faces in exporting its oil forces it to sell at a substantial discount on the market price.
2. A market for Chinese goods—China maintains economic ties and trade with countries worldwide, including North Korea, Russia, and Iran, despite imposed sanctions. In the absence of significant competition, these countries provide China with a convenient market for exporting its goods. Although large companies in China are concerned about American sanctions, they have eventually found indirect ways to trade with sanctioned countries. Small Chinese companies are less sensitive to sanctions, and trade also occurs through smuggling, which has become sophisticated due to Iran’s extensive experience.
3. China’s ambition to position itself as an alternative to the United States in the evolving global order and to enhance its influence through trade and investments is also evident in the case of Iran. Iran is part of the Chinese Belt and Road Initiative. Additionally, in early 2024, Iran became a part of the economic cooperation between the BRICS countries (BRICS was founded by Brazil, Russia, India and China).

Areas of Economic Relations between China and Iran

Economic relations between Iran and China are concentrated in three main areas:

international trade in goods, Iranian oil exports to China, and Chinese investments in Iran.

An examination of trade between the two countries reveals an interesting picture.

While Chinese exports are helping Iran find alternatives to goods that would have been supplied by Western countries if not for the sanctions, Iran’s imports of Chinese goods have significantly decreased since economic sanctions against Iran were reinstated in 2018 following the US withdrawal from the nuclear agreement in May of that year.

Chinese exports of goods to Iran totaled $10 billion in 2023 (see Figure 1), the highest yearly total in 2019–2023, but still 30% less than 2018, when Chinese exports to Iran peaked at $13.9 billion—the same year that sanctions were reimposed on Iran.

This amount is much lower than China’s peak exports of $24.3 billion to Iran in 2014.

This decline can be attributed both to an actual drop in Chinese exports to Iran and to Chinese exports being routed through a third country due to concerns among Chinese companies about circumventing secondary American sanctions against Iran. These concerns led to a significant decrease in Chinese exports to Iran starting in the second half of 2018.

Chinese exports to Iran cover a wide range of sectors, with about 70% falling into three primary categories. The first category includes vehicles, such as private cars and motorcycles, as well as spare parts for these vehicles, accounting for a quarter of total exports. The second category comprises machinery, nuclear reactors, and boilers. The third category consists of electronic equipment.

Trade figures clearly demonstrate an imbalance between the two countries. Iranian imports from China constituted over 15% of Iran’s $65 billion in total imports in 2023. In contrast, Chinese exports to Iran constituted only 0.3% of China’s total exports of goods, which reached $3.38 trillion in the same year. In other words, Iran is just one of many markets for Chinese goods, whereas China is a major source for Iran’s imports.

Iranian exports to China predominantly consist of oil. Data on Iranian oil exports to China clearly show an increase in both volume and the proportion of total Iranian oil exports to China (see Figure 2). Two other important trends should also be noted. First, Iranian oil exports to China significantly increased following the COVID-19 crisis, surpassing pre-pandemic levels. The volume of oil exports grew from 118 million barrels in 2020 to 441 million barrels in 2023, representing a 350% increase. This indicates that China imported an average of 1.2 million barrels of oil per day from Iran in 2023. The trend continued in the first half of 2024, with China importing a daily average of 1.38 million barrels of oil from Iran.

Second, Iran has become almost entirely dependent on China as a market for its oil. In 2017, Iran exported only a quarter of its oil to China. However, when economic sanctions against Iran were implemented in late 2018, exports of Iranian oil to China fell from 272 million barrels in 2018 to 170 million barrels in 2019. Despite this, China’s share of Iranian oil exports rose from 37.2% in 2018 to 71.4% in 2019. By 2023, it exceeded 80% of total Iranian oil exports and reached 90% in 2024. Exports of Iranian oil to China increased significantly despite disagreements between the two countries over the price of the oil.

After the war in Ukraine began and sanctions were imposed on Russian oil, Iran faced competition from the lower prices at which Russia offered its oil to China. The main beneficiary of this development was China, which reportedly saved $10 billion in 2023 on its imports of Iranian and Russian oil due to the substantial discounts. This underscores Iran’s heavy dependence on China, while China has alternatives for Iranian oil, with only 10% of China’s oil imports coming from Iran.

At the same time, circumventing sanctions on Iranian oil exports to China does not resolve Iran’s foreign currency problem because China uses small Chinese banks to pay for Iranian oil in Chinese yuan, not dollars. Furthermore, Iran is required to use these revenues to purchase Chinese goods. Despite Iran’s efforts to reduce its dependence on oil, various estimates indicate that one-third of Iran’s budget comes from oil revenue. Thus, the sanctions have made oil exports even more crucial for Iran.

The nuclear agreement sparked hope in Iran that foreign investors would be attracted to the country. However, the reimposition of sanctions significantly impacted foreign direct investments, which totaled only $8.1 billion from 2018 to 2022, compared to over $5 billion in 2017 alone. Chinese investors failed to fill the gap left by Western investors; China invested only $618 million in Iran during the years 2018–2022, accounting for 7.5% of all direct foreign investments in the country. Most of these investments were in the construction industry.

Foreign investments in Iran experienced a significant decline following the sanctions. Chinese companies were reluctant to invest in Iran due to both the sanctions and the country’s economic and political instability. Furthermore, Chinese companies that had invested in Iran following the 2015 nuclear agreement withdrew their investments when the sanctions were reimposed. For example, the national Chinese oil company that had signed an agreement in 2016 to invest $600 million in the South Pars natural gas field canceled its investment when the sanctions were reinstated. While China invests billions in Saudi Arabia, the United Arab Emirates, and other countries in the region under the Belt and Road Initiative, its investments in Iran remain minimal. For comparison, in 2022, China invested $1.5 billion in Saudi Arabia and $1.3 billion in the UAE.

This trend has led to internal criticism in Iran from those who argue that Beijing is exploiting Iran at the expense of its struggling economy. Critics emphasize that the relationship between the two countries is asymmetric and does not constitute an equal partnership. Moreover, Iranian businesspeople object to the fact that Chinese companies offer cheap products, which makes local products in Iran less competitive. Iranian consumers also complain about the quality of Chinese consumer goods imported into Iran.

Conclusion

China plays a crucial role in Iran’s ability to circumvent the sanctions, primarily through oil exports. However, their economic partnership remains limited, especially regarding China’s investments in non-oil trade and major infrastructure projects in Iran. The sanctions, Iran’s refusal to adhere to the recommendations of the Financial Action Task Force (FATF)—the international task force for combating money laundering and terrorist financing—and structural issues within Iran’s economy, such as poor management, corruption, and lack of transparency, all hinder economic cooperation between the two countries. As a result, Iran heavily relies on China and lacks alternatives from Western countries. The improvement in economic relations between Iran and China largely depends on a diplomatic resolution between Iran and Western countries, led by the United States. This resolution could facilitate the removal or at least the relaxation of sanctions. Conversely, stricter enforcement of US sanctions on Iranian oil exports to China is likely to significantly harm their economic relations; however, it is doubtful that the United States can compel China to adhere more strictly to these sanctions.

The opinions expressed in INSS publications are the authors’ alone.

Tomer Fadlon

Dr. Tomer Fadlon is a Research Fellow in the Economics and National Security Program and the Israel-China policy center – The Diane and Guilford Glazer Foundation at the Institute for National Security Studies. Fadlon's publications address a wide range of issues related to the global and regional economy, and how these economic and political developments affect Israel. Fadlon also completed his PhD at the School of Political Science, Government, and International Relations at Tel Aviv University. In recent years, Fadlon is a lecturer of several courses at Tel Aviv University mainly such as "Political Economy," "The International System."

Raz Zimmt

Dr. Raz Zimmt is a Senior Researcher and co-editor of the institute’s journal, Strategic Assessment. He holds a master's degree and a Ph.D. in Middle Eastern history from Tel Aviv University. His Ph.D. dissertation focused on Iranian policy towards Nasserism and Arab radicalism between 1954 and 1967. He is also a research fellow at the Alliance Center for Iranian Studies at Tel-Aviv University. He is the author of the book "Iran From Within: State and Society in the Islamic Republic" published (in Hebrew) in 2022. He is also a veteran Iran watcher in the Israeli Defense Forces. His main research interests are politics, foreign relations, and society in the Islamic Republic of Iran.

Growing but Limited: Iranian Economic Relations with China | INSS

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Kamala Harris must correct America's Ukraine policy

Decisive U.S. leadership and support are crucial for Ukraine's success

By Anders Aslund - Project Syndicate - Aug 25, 2024

STOCKHOLM –

By providing Ukraine with early military, political and financial support, U.S. President Joe Biden’s administration saved it from being overrun by Russia.

Yet since November 2022, the conflict has been locked in a stalemate, which is not to Ukraine’s advantage. If elected, Kamala Harris should make it an explicit goal to turn today’s horrendous war of attrition into a Ukrainian victory. Ukraine’s surprising offensive in Russia’s Kursk region may be the beginning of a more promising development.

Ukraine’s own goals are clear: to restore full territorial integrity; to allow all displaced Ukrainian citizens — including the thousands of children kidnapped by Russia — to return; and to receive full compensation for the damage Russia has caused. By contrast, the United States currently has no strategy to speak of. The Biden administration merely claims that it will support Ukraine “for as long as it takes,” whereas Harris’s Republican challenger, Donald Trump, promises to end the war in a day, implying complete capitulation to the Kremlin.

For Harris, the current impasse is an opportunity. Two-thirds of Americans are rooting for Ukraine’s victory and she has already dealt extensively with Ukraine, having met President Volodymyr Zelenskyy six times and led the U.S. delegation to the Ukraine Peace Summit in Switzerland in June. As U.S. vice president, she has followed Biden’s lead; but as president, she could turn the war around and make Ukraine one of her big winning issues.

Doing so will require a comprehensive strategy backed by sufficient resources. The Biden administration’s policy (presumably the work of National Security Adviser Jake Sullivan) is to defend Ukraine without provoking Russian President Vladimir Putin. Owing to irrational fears about nuclear attacks or World War III, the White House has created imaginary Russian red lines, thus offering Russia a sanctuary from Ukrainian attacks with Western arms. But given that Putin would not survive a nuclear war, he is exceedingly unlikely to go down that path.

Another fundamental shortcoming of the Biden policy is the lack of any clear goal. The goal should be to provide Ukraine with enough support to defeat Russia. Harris should appoint a national security adviser who is whole-heartedly committed to that objective. The Ukrainians are bravely fighting on their own. They are not calling for foreign troops; but they do need potent arms, the right to use them to target Russian bases and sufficient funding from the West.

Ukraine received about $100 billion in 2023 (half of it military assistance and the rest budget support and humanitarian aid) and it is on track to receive around the same amount in 2024. While substantial, that is not enough to tip the balance. For an outright victory, Ukraine would probably need $150 billion per year, with a doubling of military support to $100 billion. That would equip it to win the war, which would then reduce future costs (not to mention Ukrainian suffering).

It is no secret where such funding can be found. The West has frozen $280 billion in Russian reserves, two-thirds of which are held in the private Euroclear system in Belgium. Moreover, the U.S. Congress has sensibly passed legislation authorizing the Department of the Treasury to seize frozen Russian assets, while demanding that the European Union do the same. But the EU has refused, owing mainly to opposition from France and Germany.

This European resistance makes no sense. With Russia violating international law on a daily basis, the Kremlin cannot credibly demand the protection of international law. Like the U.S., the EU needs to adopt legislation allowing for Russian funds to be seized and used to support Ukraine. Though only around $5 billion has been located in the U.S., that money can be seized and delivered to Ukraine immediately to set an example for the Europeans. True, in June, the U.S. persuaded other Group of Seven members to lend Ukraine $50 billion by drawing on the future yields from frozen Russian funds. That was a good start. But Ukraine needs the money as soon as possible to defeat Russia.

After Russia launched its full-scale invasion in February 2022, the U.S., the United Kingdom and Canada were Ukraine’s primary sources of military aid and training. During the war’s early months, they were understandably reluctant to furnish the Ukrainians with the most sophisticated arms, for fear that Russia would seize them. But these fears were alleviated by the summer of 2022. For two years now, the U.S. could have been providing Ukraine with the weapons it needed to push the Russians back.

Very little will happen unless America leads. The U.S. remains globally dominant in arms production and exports, whereas the Europeans have too few arms to change the balance in the war.

Finally, we come to the most absurd flaw in America’s Ukraine policy: the prohibition against using U.S.-supplied weapons to hit Russian bases from which Ukraine is being attacked. This policy is not even in keeping with the right to self-defense enshrined in the U.N. Charter. It should be revoked immediately.

The war in Ukraine could be a boon for Harris, but she must correct Biden’s mistakes and provide the additional resources Ukraine needs to defeat Russia. By seizing Russian sovereign assets and persuading U.S. allies to do the same, she can help Ukraine win without placing any additional budgetary burden on Americans.-

Anders Aslund is the author of "Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy" (Yale University Press, 2019). ? Project Syndicate, 2024

Kamala Harris must correct America's Ukraine policy - The Japan Times

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