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Author Gordon Chang on the death of the North Korean leader and future of the country’s government.
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Let's bring in the extra -- he knows what he's talking about his name is Gordon Chang is the also all the -- -- showdown.
North Korea takes on the world Gordon welcomed the program.
Thank you very much -- -- Kim Jong-Il is dead we get the news.
The stock market in South Korea goes down I think about 3%.
And that's the full extent of the financial reaction I -- there's no -- reaction in the world what -- -- -- -- Yeah it probably should have going down more and I'm surprised that it didn't but this always happens when there's bad news out of North Korea.
The stock market in South Korea the kospi will drop and then it comes back up again.
But I think we haven't really seen the problems though of Kim Jong Il's death those are gonna -- down the road well.
Watch what in what way will his death and the succession of Kim Jong Kim Jong-un I think is the promise you right.
It it won't wait is that going to affect me at some point in the future -- -- give -- the chain reaction.
Well the problem here is that Kim -- on to bolster his legitimacy is gonna have to do something horrible like kiwi saw last year with the sinking of the South Korean freighter and the shelling of the North Korean island.
This time -- the North Korean regime fails and that's a real possibility.
You could see the Chinese army coming south across the border to maintain order and perhaps you could see China get entangled in whatever North Korea does because -- North Korea attacks the south.
If they shall an island or do whatever then we get involved because we have a treaty obligation to defend the South -- you can't -- up.
We have more start over this idea though Gordon at the maybe -- also has an opportunity when had to do something not -- in other -- -- that's the whole window of opportunity -- these are people going to be a different sort of later is that no -- no he really can -- the -- crazy -- is going to be something -- -- -- to establish -- street -- North Korea -- anything can happen so maybe something good but it's pretty unlikely and the reason is that.
Kim Jong ill only had about two years to get his -- ready to be on the frowned.
He -- Kim -- on doesn't have that network of relationships and friends in the know how to be able to survive which is really a snake pit the North Korean -- He knows he's he's like -- hipster in this thing.
So what is gonna have to do is tread very very carefully.
He's probably gonna have to suck up to the military and the military doesn't want to have any reform so we're not currency reform for five years in North Korea at a minimum.
Well okay.
All they close to the North Korea and custom flat out collapse total civil disorder mass starvation within about this for -- -- -- Kim -- -- around the answer was probably no because.
They were not at that point to get bigger risk of collapse note goes up -- -- Kim Jong -- goes way up because you have regime elements are gonna fight with each other in the price for losing these political battles is deaths over the battle is going to be -- Roche is in Pyongyang -- who pays -- -- -- who pays to rebuild them at some point when that happens who -- China.
Probably China for part of its South Korea for the rest I think that you're gonna see the United States try to get an international consortium to do that you see I think this is where we get today.
The the nitty gritty of the financial problem.
Because China that's a -- -- -- people in the today's New York Times he's saying China could -- it's a bubble he know what you can -- for a long time right along comes the North Korea mess.
Just as China's into getting into some serious trouble.
That's why I suggest down the road you could have some serious but negative financial implications yeah -- the one thing about China also -- that they're going into their own political transition which formally starts at the end of next -- Probably last two years after that.
Right now decisions are not being made in Beijing we can see that from a number of things and many red Kim Jong-Il dying they don't need this in the Chinese capital do you still think that China collapses -- know the bubble busts in 2012.
Definitely definitely definitely.
That would be enormous.
For the world economy it would be but -- -- the Chinese economy has really been unsustainable they've been able to keep it going through a lot of fiscal stimulus and monetary stimulus they've run about the end of the string now on this.
Any last common -- Well it and I talk about the possibility what happens next to North Korea.
What about the countries around it is it possible that we all meet there.
To try to resolve or settle differences and that -- -- you need a diplomat violence all out army is now -- -- You know it would really nice in the sense of we -- all get together diplomatically we've been talking to the Chinese about North Korea and they've rebuffed us.
I actually don't think the worst scenarios will occur but I do see a series of provocations that do result in South Korean dance now a lot of tension in the region -- -- -- Merry Christmas -- Gordon Chang thank you very much indeed.
Even so the Dow Jones average for the future this show a forty point gain at the opening bell despite we have had good for us yet could grow up.
-- and thank you.
