Econ_June_09

24 Asia

The Economist

June 9th 2018

be backing away from his all-or-nothing

talk. He says he no longer wants to use

loaded phrases like “maximum pressure”,

given how well things are going. As June

12th nears he has played down the pros-

pects of swift success on disarmament and

talked up the chances of a symbolic win,

involving a peace deal formally ending the

Korean war after nearly 65 years of uneasy

truce. That could lead to more protracted

negotiations on weightier issues—a pros-

pect Mr Trump has endorsed by calling the

summit a “get to knowyou” meeting.

According to the Chinese academic, Mr

Kim cannot give up his entire nuclear

weapons programme without pushback

from the armed forces, which do not trust

American security guarantees. On June

4th reports emerged that he had replaced

three senior defence officials, prompting

speculation that he was trying to quell op-

position to his newforeign policy.

Instead, one theory holds, Mr Kim will

offerMr Trump a choice: either an immedi-

ate scrapping ofmissiles capable of hitting

America, or a slower, step-by-step pro-

gramme of the sort previously attempted,

leading to the eventual dismantling of the

North’s nuclear programme. That would

be a trap, albeit an open one. In all likeli-

hood, the step-by-step process would go

the way its predecessors have, with North

Korea benefiting from the easing of sanc-

tions before pulling out in time to preserve

its nuclear capacity. One possible fudge

(and source of future disputes) would be

for the North to give up nuclear weapons

but to retain nuclear facilities that could be

depicted as civilian. Mr Trumpmight find a

limited deal onmissiles appealing, by con-

trast: it would allowhim to say he had kept

his promise to protect America.

But a deal of that sort is a nightmare for

America’s closest allies in the region, South

Korea and Japan, who would be left at the

mercy of North Korea’s short- and medi-

um-range missiles, possibly tipped with

nuclear bombs. Such bald proof of Ameri-

ca’swillingness to sell out its allies, in turn,

would alter the strategic balance in Asia in

the long run. Friends would begin to ques-

tion whether America would stand up for

them in disputes with China, for example.

The natural response would be to hedge

bets and to reach an accommodation with

China, dramatically diminishing Ameri-

ca’s clout in the region.

China can see several ways to end up

ahead after a Kim-Trump summit. If North

Korea reduces its nuclear capabilities, that

eases a security headache in China’s back-

yard. Even if North Korea may have partly

faked the recent demolition of an under-

ground nuclear test site, as American offi-

cials have claimed, China has reason to

cheer Mr Kim’s promise to stop nuclear

tests, which took place alarmingly close to

the border between the two countries. If

concessions from North Korea are

matched by a reduction in America’s mili-

tary presence in South Korea, “that would

be double good news for China,” says

Zhao Tong of the Carnegie-Tsinghua Cen-

tre forGlobal Policy, a think-tank in Beijing.

Even ifMrTrumpbalks andwalks away

from negotiations, as he has repeatedly

threatened to, America’s interests are likely

to suffer. The summit seems bound todissi-

pate the pressure on the North, especially

if it is seen to have failed because of Mr

Trump’s obstreperousness. Mr Zhao says

that as soon as Mr Trump agreed to meet

Mr Kim, America lost the bargaining pow-

er painstakingly built up over recent years

as international sanctions have tightened.

According toMr Zhao, Chinese officials be-

lieve that even if the Kim-Trump talks fall

apart, “there is very little chance that the

could now launch a disarmingmilitary

strike.” South Korea would be the first to

protest against any such “bloody nose” at-

tack, and China and Russia would also be

loudly opposed, he predicts.

Nor do experts in the region see much

chance that North Koreawill face addition-

al international sanctions, even if the sum-

mit ends in rancour. “North Korea can live

with the consequences of a failed summit

with all the sanctions staying in place.

That’s fine. Sanctions are not going to get

tougher,” says Mr Zhao. China, notably,

never really believed that sanctions alone

could bring about the American goal of

forcing North Korea to disarm, and only

strengthened them reluctantly. This week

it allowed flights to resume between

Pyongyang and Beijing. They had been

suspended last year at the height of ten-

sions over the North’sweapons-testing.

South Korea, too, seems likely to try to

preserve its detentewith the North, even if

America reverts to hostility. Last week the

two sides agreed to reopen a liaison office

in the Kaesong industrial complex, which

was shut down after a nuclear test by the

North in 2016. South Korean companies

have been buying up land near the demili-

tarised zone that divides the two countries.

Some have set up their own offices for in-

ter-Korean co-operation. “The South Kore-

ans,” saysMarkFitzpatrickof

IISS

, an inter-

national think-tank, “may well find ways

to work around sanctions or interpret

them in a way that allows them to re-up

economic engagement.”

In otherwords, Mr Kimhas very little to

lose from the summit. Mr Trump may feel

that he, too, is likely to get good press from

the event. But America could come out

worse off, even if its president does not.

There’s a hunger for peace

N A sunny day in May it is not hard to

see why the Japanese island of Ishi-

gaki, some 2,000km from the capital, To-

kyo, is becoming a tourist magnet. This

year the crystal-watered, coral-reefed is-

land was named the world’s hottest desti-

nation byTripAdvisor, a travel website. It is

already popular with Asians from nearby

Taiwan and Hong Kong, and increasingly

with Westerners looking for a counter-

point to temple-touring and tea ceremo-

nies in Kyoto. Last year1.4m foreign and lo-

cal tourists visited, twice the number in

2013, when a newairport opened.

But there is trouble in paradise. Karry

Kanko, a bus company, has new vehicles

sitting idle for want of drivers. It has al-

ready cut some routes. Taxis are hard to

find. At Art Hotel the manager sometimes

doubles as a chamber maid. Guests are of-

fered a discount to forgo the daily cleaning

of their rooms, to reduce staffing needs.

“We are struggling,” admits Yoshiharu Ta-

kamine, who stepped down as head of the

local tourist-information centre inMay.

In 2016 the Japanese government set

ambitious targets for foreign visitors as a

way to generate economic growth as the

population ages and shrinks. It reckoned

that touristsmight also help to reinvigorate

struggling rural communities. There is defi-

nitely room for growth; inbound tourism

accounted for just 0.8% of

GDP

in Japan in

2016, comparedwith 2.1% in France and the

United Kingdom, 12.9% in Thailand and

17.6% in Cambodia. The plan is working.

The government is on track to reach its

goal, revised up this year, of 40mvisitors (a

67% increase on 2016) by2020, whenTokyo

will host the Olympics.

But the rapid growth has brought pro-

Tourism in Japan

No room at the inn

ISHIGAKI AND NIKKO

Foreigners are arriving faster than the

countrycan accommodate them