Thursday, November 25, 2010

Why did the DPRK shell Yeonpyeong Island

North Korea shelled Yeonpyeong

November 23, 2010, the DPRK fired artillery shells onto the ROK’s Yeonpyeong Island and killed four people including two ROK’s marines. 19 people were also wounded in the attack.

The cause for this unprovoked attack can also be read as a help and a gratitude from North Korea to China, although most media said that the DPRK was trying to consolidate its grip on power by rallying its people around these radical measures and to puff up the image of North Korean leader Kim Jong-il's son Jong-un in line with the military-first doctrine.

Before Kim Jong-un was recently bestowed the military rank of general and became the vice-chairman of the Central Military Commission of the Worker’s Party of Korea, he was brought by his father Kim Jong-il to China for a visit and received China’s firm support on his future succession in line of the DPRK regime.

To show DPRK’s importance and express the gratitude to China, North Korea chose a right timing to help its big brother a bit, especially while China is facing a difficult situation.

Externally, U.S. launched recently a new round of quantitative easing (QE2) to stimuli its economy. It is believed by China a new economic war from U.S., because hot money turning out from QE2 is attempting to enter China to take advantage of a predictable increase in the exchange rate of RMB to U.S. dollars. This money is trying to find any loophole in Hongkong to sneak into Mainland of China. It is adding more pressure on the serious inflation of China’s market.

Internally, China's inflation was accelerated to 4.4 percent in October, the fastest pace in two years. The China’s central bank last month raised interest rates for the first time since 2007 and lifted reserve requirements for banks on the evening of November 19, the second time in nine days, limiting their capacity to lend.

At this moment, the artillery sounds in Korean peninsular shocked the world economic market. It told hot money that China could be not a right direction to go because China is so close to North Korea both geophysically and politically. The artillery shots also pushed U.S. dollar to a higher position in world currency market and temporarily eased China’s situation under hot money’s attack.

Although U.S. received a setback on this round of economic war to China due to the sudden artillery fighting between two Koreas, it won still some points on military by sending finally its aircraft carrier Washington to Yellow Sea for the joint drill with ROK navy on November 28 under a right excuse and without irritating China and Chinese people too much.