Getting to Yes with China and North Korea

By Walter Clemens, Jr.

We are all for world peace and economic stability. But who holds the key? In this article, the author shares his expert insights on how the United States could come to terms with China and North Korea. In the end, rewards, and not sanctions, might just be the key to a better world.


The United States is Number One in “hard power” that can be used to compel and coerce others to change their behaviour. But Washington can also use its military and economic strengths for “soft power” goals – to persuade and coopt others for joint gains. The United States did so in 19471950 when it expended nearly three percent of GDP under the Marshall Plan to help friends and former foes to rebuild and ally for shared objectives. The programme incentivised France to cooperate with Germany and the Benelux countries to cooperate with France. When the US economy slowed, trade with revitalised Europeans kept US factories and workers busy. Mutual gain laid the basis for a shared prosperity and military security community that remain strong after nearly seven decades.

Instead of threatening today’s adversaries around the world, the United States could carry a big stick but also offer positive incentives to resolve disputes. As Roger Fisher and William Ury argued in Getting to Yes, we need to search for arrangements that meet the basic interests of each share-holder.

Two of the major conflicts in East Asia concern China’s claims in its offshore waters and its policies to North Korea. China’s claims islands and rocky outcroppings in the South China Sea and has begun to fortify them. An international court at the Hague has ruled that China has no historic or other right to this territorial aggrandisement. What could Washington offer to persuade China to pull back before an arms conflict ensues with US ships demonstrating their right to sail in international waters? First, Washington could back a programme of cooperation  among all the littoral nations – China, the Philippines, Vietnam and others – to develop and share the mineral and fishing riches of the disputed waters. Second, the United States could commit to cutting back its intelligence gathering from ships and planes traversing waters close to the Chinese mainland. Neither step would bring material gain to the United States but could save it from a perilous military confrontation.

The United States should also assure China that – no matter what happens there – US troops will never advance further north than the outskirts of Pyongyang.

With regard to North Korea, Beijing and Washington need to plan for alternative futures. If the regime collapses, Beijing and Washington should agree in advance how to dispose of DPRK nuclear weapons and facilities. The United States should also assure China that – no matter what happens there – US troops will never advance further north than the outskirts of Pyongyang.  If the two Koreas merged and nuclear weapons removed, US troops could be withdrawn from the peninsula.

Positive incentives helped achieve the Agreed Framework signed by US and DPRK negotiators in 1994. The North agreed to stop production of plutonium in return for construction of two light water power reactors and – until they began operating – regular deliveries of heavy oil. Both sides denounced the accord in 2002. Washington complained that the North cheated by starting to enrich uranium. Pyongyang countered that the United States broke its obligations. Contrary to Japanese Prime Minister Shinzo Abe,1 by 2002 construction of the reactors had still not begun and oil deliveries often arrived late. Also, Washington had done nothing to normalise political relations with the DPRK as pledged in 1994.

Today, some US leaders say that “everything is on the table” with North Korea. They claim to prefer diplomacy to war, but some say that “we have tried everything with North Korea and achieved nothing”. Some policy analysts conclude that we must use military force or just settle for deterring another nuclear-armed adversary.

The reality is that the United States and its partners have done little to leverage their economic and other strengths to offer Pyongyang positive inducements to change its behaviour. Indeed, after North Korea’s sixth nuclear test, President Donald Trump denounced as “appeasement” the  efforts of South Korea’s president to re-engage the North in sports and other forms of cooperation. Many if not most of America’s leaders are short on empathy. They cannot imagine how the world looks when confronted with huge US-South Korean military exercises that include amphibious landings and missions to “de-capitate” the Pyongyang leadership.

What positive actions could Washington and Seoul offer the North? The US could accept the North’s frequent requests to negotiate a peace treaty to supersede the 1953 armistice. Washington could offer to establish diplomatic relations with Pyongyang. The scope of US-South Korean military exercises could be reduced. In tandem with these moves US and South Korean leaders could demand a freeze of the North’s missile and nuclear tests. The aim would be to trade “security” for “arms control”.

Another kind of inducement is suggested by Shepherd Iverson’s new book Stop North Korea! A Radical New Approach to the North Korean Standoff (Tuttle, 2017). A professor for eight years at Inha University in Incheon, Iverson makes the case for a version of economic statecraft – a buy-out of North Korea as if it were an under-performing corporation controlled by a board of short-sighted, rent-seeking bosses. One could debate all the payouts, but Iverson’s principle would remain: the transfer of billions of dollars to the “enemy” to achieve both unification and de-nuclearisation.

Iverson suggests that the South Korean government and its Bank of Korea, joined by chaebols (such as Samsung) and other private investors, create a multibillion dollar Reunification Investment Fund to rescue and integrate the North. The buy-out would cost $175 billion spread out over seven years. Less than 20 percent of this money would go to elites and military officials who benefit from the existing rule, while the rest would be distributed widely. All this could stimulate a new political economy in which all North Koreans would benefit.

Iverson’s proposal, if implemented, could bring about peaceful unification of the two Koreas and de-nuclearisation of the peninsula in a short time. But could it be adopted by prospective donors and accepted by the powers that be in Pyongyang?

An investment of $175 billion would be a trivial outlay if it prevented war and reduced defence expenditures.

In return for outsiders’ largesse, the North would join the South in a united Korea without nuclear arms. The Bank of Korea and other contributors to the fund would soon recover their investments. All Korea’s neighbours plus the United States and Europe could profit from new business opportunities. Russia would obtain a gas pipeline into all of Korea. China would be freed from a perennial headache and could access Korean minerals. A unified Korea would gain peace and stability, more people and territory, more mineral resources, greater energy security and diversification, valuable Pacific ports, along with  rail connections to China, Russia, and continental Europe. The greatest gain for all would be elimination of a serious security threat for every nation in the region and the United States. An investment of $175 billion would be a trivial outlay if it prevented war and reduced defence expenditures.

Iverson does not address whatever financial burdens for South Koreans resulted from integrating North and South. Iverson expects that chaebols and smaller enterprises in the South would make huge profits from freely expanding into the North. But some experts estimate that unification could cost South Koreans from half a trillion to a trillion dollars – far more than the cost of the initial buy-out.

Threats and sanctions (loaded with loopholes) have not halted North Korea’s arms buildup or reduced tensions in Northeast Asia. All the key actors in the region need to think how they could use their assets to create positive values and forge a better future for all parties. Rewards, not sanctions, could be the key to greater prosperity as well as stability.

Featured Image: Chinese President Xi Jinping courtesy of, US President Donald Trump courtesy of The Independent & North Korean Supreme Leader Kim Jong Un courtesy of KCNA Via KNS/AFP/Getty Images

About the Author

Walter C. Clemens, Jr. is Associate, Harvard University Davis Center for Russian and Eurasian Studies and Professor Emeritus of Political Science at Boston University. He wrote North Korea and the World: Human Rights, Arms Control, and Strategies for Negotiation (Lexington: University Press of Kentucky, 2016). He can be reached at


1. New York Times, September 18, 2017

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.