China-based Kiwi businessman who's just been to North Korea says the rogue state is desperate for trade and knows it'll get annihilated if it tries to start a war

China-based Kiwi businessman who's just been to North Korea says the rogue state is desperate for trade and knows it'll get annihilated if it tries to start a war
David Mahon

The Kiwi founder and chairman of a 32-year-old investment and advisory firm based in China warns we should be more concerned about America’s response to North Korea, than North Korea itself.

David Mahon of Mahon China believes North Korea wants to resume trade with the rest of the world, not start a war.

Speaking at a New Zealand China Council breakfast in Auckland last week, he said: “Don’t worry about North Korea…

“It is really struggling, and these missiles are a way of saying, ‘We want to talk. We need to talk.’

“So if America could actually get past this ultimatum of, ‘Get rid of your weapons’, and begin a dialogue, start the trade… the reforms that opened China are possible.”

North Korea in need of trade

Having recently been to North Korea, Mahon described it as a “medieval world”.

“It’s a very backward, static country, but a very gentle country full of warm people... It’s not an evil country full of evil people. It’s a country with a very evil, theocratic leadership.”

Mahon said it was important to understand how struggling “under the cosh” of colonisers over the last century has largely contributed to it being in the state it’s in now.

“Korea’s had a very rough ride,” he said.

“They’re so poor and backward that I think all they are looking for is some recognition from the US to get back into a negotiation, so the ships begin to flow into North Korea again and they get the technology and food they need.

“It’s a country that has 80% mountains and hills. Where it’s flat and there are rice paddies, the land is very fertile. But you only have to look a few metres up into the hills and it’s very poor land. So they can’t feed themselves.

“If you look at the people in the countryside, they are starving slowly… There’s almost no protein in their diet. They have the look of people who are suffering of AIDS or cancer, when the body can no longer retain proper nutrients.”

With food in North Korea largely limited to rice and wheat-based dishes, Mahon said his tour guide even suggested he brought food with him on his trip.  

Yet he is hopeful North Korea can open its borders, with the 2008/9 famine prompting the government to allow private rice cultivation.

“So now half of the rice grown in Korea is in private hands. This is the beginning. This is how [China’s reforms began]. It was allowing farmers to use part of their own time and land to grow a private market. So it can be done.

“I don’t think one should worry that this is a country looking for war. Or even a mad leadership that believes war is in their interests. They would be annihilated if they tried anything.”

Getting the US out of North Asia the solution

Mahon went on to say he believed China didn’t have any influence over North Korea.

“They can’t impose more sanctions. They’d just increase the suffering of the people. And if they go too far, they won’t get regime change through some collapse. They’d just end up with masses of refugees pouring out into north eastern China.

He said rather than pushing China to change course, America needs to think very carefully about a different strategy.

“I think the best strategy is, a new [US] president goes to Beijing and says, ‘Right, we’ll take half of our ordinates and people out of North Asia. We’ll take our stuff off the South Korean peninsula.’

“George Bush Senior did. He took all the missiles off the South Korean peninsula. And his son, George W Bush, put them straight back on again…

“But America wants South Korea to be under pressure, because it’s their way to have a platform against China. And to have a lot of military hardware close to China. They don’t want reunification. They don’t want the talks that actually would resolve the issue. But that’s the only solution…

“I don’t think we should take too much notice of each missile test and we shouldn’t worry about what the motives of Pyongyang are. We maybe should worry about what America may do in reaction…”

Important NZ doesn’t support US imperialism

Mahon recognises New Zealand is in a tight spot, needing to maintain good relationships with both China and the US, even if they’re at odds with each other.

“We have a history with Europe and the United States, which is a very important one. Our institutions, our parliamentary democracy, our rule of law, our business standards - these are derived from the history of those countries. These are things that give us our credibility.”

Yet Mahon noted that despite commercial partnerships between the US and China playing a key role in China’s rapid growth, there’s a long legacy of tensions between the countries.

“Since George Bush Senior, America has constantly dropped the ball. Even Obama did very poorly in his relationship with China. His increase in military presence in North Asia was staggering. It was talked about as a pivot to Asia, but it meant increasing their naval presence in North Asia quite considerably, and the message was, ‘China, we are still in power. Stop building your bases in the South China Sea.’

“I don’t care about the bases in the South China Sea. They’re statements… they’re tiny gestures of a very large and economically powerful country.

“There are over 80 major bases that America maintains in North Asia. There are 10s of thousands of troops in a number of countries… They have more military firepower in North Asia than anywhere else in the world beyond their own borders. China is encircled by American military presence…"

In light of this, Mahon said: “It’s very important that New Zealand maintains its dialogue with China and doesn’t climb this imperial position that America’s now struggling to maintain. Because it’s an empty position…"

However: “As much as we look at our future with China, we’ve got to be very careful about what kind of dialogue we have with our old allies and our old friends.

“Australia’s another case and point. China totally discounts most things that Australia says regionally in Asia, because they’re seen as an American surrogate…

“We’re respected for our relative non-alignment.”

To maintain this neutrality, Mahon said it was also important for New Zealand to speak up if we thought China was out of line.

We need to knock on China’s door before we need a bailout

Overall, Mahon said New Zealand/China trade relations and investment opportunities were looking good.

He said the focus on China’s contribution to New Zealand’s housing woes was “unfortunate”, as we’ve benefited from our relationship with the superpower in so many other ways.

“If we had clearer policies and a more honest use of data from our government, a lot of these issues would be a lot clearer to all of us and they would not be issues.”

Mahon said that if there’s something New Zealand should be doing it is initiating more investment opportunities for the Chinese.

“We wait until our businesses are faltering,” he said, referencing Fisher and Paykel Appliances, Crafar Farms and Silver Fern Farms.

“Most of the big deals in New Zealand; they are companies that have run out of options, and a Chinese buyer in most cases paid handsomely for the asset.”

So rather than wait until companies have trouble, businesses should be proactive in going to China to find a partner and go into a relationship where a level of ownership is maintained.

“I think if we were more proactive, we’d have a much more positive interaction with the country. What we’re doing at the moment is selling assets all over the world, out of New Zealand, year-by-year, and we’re not investing internationally. We’re gradually leaching our economy.

“I’m not a nationalist when it comes to commercial things… but we could be a lot smarter than we are being.

“And the Chinese investment community isn’t just cooking for pretty farms on Lake Taupo. They’re looking for technology, know-how, management, networks, access into other markets…

“If we were more proactive as a business community, we could be going into an era of bringing in, nurturing, good Chinese investment.”

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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You cannot ignore that a state of war still exists between Nth & Sth. Should the South ever have insufficient armaments or allies to defend itself then it's existence would be perilous indeed. The North has sought to unify by means of invasion before and believe if it hadn't been for American intervention, they would have succeeded, it remains, steadfastly, as unfinished business. It is their country, their heritage and no one will ever convince them that they are wrong, and if you look at the example of Vietnam, they have a point or two.

i think this guy is a little delusional. Who colonised North Korea? The Japanese invaded them in the late 30s and created their own special form of carnage as they did in China. The Kim family came to power after the war and have maintained it by force ever since. If anything the colonial carnage is done by the Kims, unless the Chinese had done before WW2. There has been ongoing dialogue with NK for decades, but they have proven unreliable and untrustworthy and breached virtually every international agreement they have been a party to. Trade? as they have demonstrated, it will only be used to strengthen the Kim family grip on power and keep their people brainwashed and subjugated.

Yes and who was it that forced Japan to modernize and open itself to the rest of the world? Yes good ole' U.S.A at the point of the gun. Yet another example of the arrogance of the United States blowing up in their faces.

The strange language of megalomania?

“Korea’s had a very rough ride,” he said.

Hmmmm....

How did we get here? In the 1950s the USA dropped 635,000 tonnes of bombs on North Korea including 35,000 tonnes of napalm. The US killed an estimated 20% of the North Korean population. For comparison, approximately 2% of the UK population was killed during World War II. Read more

Not sure what you're saying here Stephen? What was America doing there? They were defending the south from the invading north. Defending a democracy from a dictatorship, What was the alternative? The north invaded without warning and pushed everyone pack to a tiny perimeter at Pusan. Don't forget history and what it tells us. i know we love to hate America, to vilify the country that elected Trump to it's presidency. But for some of what it had done it wasn't the bad guy.

Not sure what you're saying here Stephen?

More precisely:

During this period and for the next two years, the American air force carried out massive bombing sorties. Some of the bombing was meant to destroy the Chinese and North Korean ability to keep fighting, but Korea is a small territory and what began as “surgical strikes” grew into carpet-bombing. (Such bombing would be considered a war crime as of the 1977 Protocol I of the Geneva Conventions). Read more HT Andrewj

And? Carpet bombing was the tool of the day. It had helped win WW2 against the Germans and Japanese. Precision targeting did not exist then. The Chinese had pumped 10s of thousands, if not hundreds of thousands of troops across the border to prop up the regime in the north. This occurred when the allies (we were there too) pushed the NKPA back to the Yalu river. The nature of the terrain meant that any other form of fight would have cost much more in blood than it did.

You imply the Americans were at fault, but what alternative was available to them - nukes?

And? Carpet bombing was the tool of the day. It had helped win WW2 against the Germans and Japanese.

But not Vietnam. Nonetheless, I am not as accepting in respect of such brutality.

What is instilled into NK is an absolute hatred of the Western Allies of the Korean War, ie it manifests at, one would guess, 99% anti USA. If MacArthur had obeyed his orders and not advanced over the 38th parallel it may not have resulted in the subsequent decimation of NK and its people. So NK, rightly or wrongly, believe all of their sufferance since WW2 are the fault of the USA, & before that, there is too, quite a bit of Japanese brutality in the mix to consider. So as all this started in say 1948, and those born then now are approaching seventy years in age, it is plainly obvious that all the generations have been indoctrinated profoundly and convincingly in a belief that the USA & some allies are no better than satan. In some ways, sadly enough, as all the good Japanese people that jumped off the cliffs in Saipan during WW2 believed. They will not budge from that belief, because the alternative is just way too frightening and that is exactly what the regime depends on.

This is not about accepting brutality, it is about observing history for what it is and understanding why. If blame s to be apportioned, where is the blame for NK attacking the south? It is they who are the aggressor. They used myth and disinformation to control and brainwash their people. They brutalise then and have done for 60 years now, two generations who know no better. So rather than criticise Trump for his stand, or America for a history it cannot change offer a solution that has a realistic chance of succeeding.

For the greater good of the region's peoples, world stability, and planetary health, I fear the only realistic solution that puts this problem to bed once and for all is a military one. But it is also high risk. Kim is detonating nukes now. Only he is doing it underground inside his own territory. Give him sufficient time and he will start detonating them in other places. The BS he is feeding his people will in time force him to back up his words with actions. We need a solution now.

Exactly that is the ultimate risk & that is what the dictator is counting on. But, even more so, has anybody thought about the potential of hocking off, here & there, a few battlefield nukes, personnel backpack kit, to any old terrorist, with a couple of $ million available.

Yes Kim raising funds by selling nukes to international terrorist groups. That will be a risk most haven't even come close to considering, and i must admit my first reading of your comment i didn't click to it either. This paints the risk as far worse that it is at the moment.

so true. but average brainwashed kiwi only follows american propaganda

This piece - it's all nice in theory.
But there's no way the USA will relinquish it's strategic position in North Asia.
I'm not sure anyone has a true (realistic) solution.
I suspect the best of a whole range of flawed options is containment in the growth of North Korea's nuclear arsenal. The huge question is whether the USA will tolerate further advancement prior to containment. I am not convinced they will. I fear that they will view the risk of North Korea hitting the American mainland to be too grave a threat.

In my estimation, when dealing with a puppet one should always ignore the puppet and 'talk to the hand'.

The starvation of 25 million citizens is probably more criminal that the misuse of weapons currently.
Surely there is a surgical solution to getting rid of the NK leadership, drop information and food across the country, and march troops and tanks to free the poor citizens. Just like the end of WW2 elsewhere.
Why tolerate such a malignant dictator?

Two words...."Drone Strike". Preferably while he is watching the launch of a missile then it can be made to look like things have gone horribly wrong in an "accident".

Excellent idea

you need to take out the whole leadership group, dont for a moment think with him gone it will stop,
also you have the massive problem of china and Russia backing him how do you think he has got the rockets and nukes
you sometimes wonder if America had just walked away from south korea (sorry for the harsh thought) and had let the north take control where would we be now.
has Vietnam ever become a threat? or is it so weak because Russia and china stopped supporting them because there was no fight and because of communism that they are a non threat

If I were the leader of NK I would be doing exactly what Mr. Kim is doing now. Korea was brutalised by the Japanese and then America and its Allies killed 25% % of NK's population and all its dams which irrigated its fertile soils. All on the record. America has 30000 troops on the boarder of South Korea and North Korea. NK has said to America many times, you stop and we will stop. America has always said no and has continued to say no. See the UN yesterday. America has included NK in its 'axis of evil'. Kim sees what the US has done to Iraq, Syria and through NATO, Libya and the sanctions it has imposed on Iran. I am sure that Iran too will be taking note of what is taking place between NK and USA. I would think they will restart the nuclear programme any time soon. It is a moot point as to whether Kim can bomb America but it certainly can bomb many of its surrounding countries. It will stop when America stops. Diplomacy and compromises is the only way to reach a solution. War never ever solves a problem

"Japanese" that was pretty much ALL of Korea btw.

the "25%" consider North Korea attacked south Korea in the first place then having to bear the cost of that is something they should have considered.

"wars never solved anything' NB I think the Jews would be generally happy we fought WW2 to stop Hitler, just disappointed we took so long to start while their people died.

While yes America isnt lilly white by any means I think it pretty obvious when looking at South Korea V North Korea today the significant difference between the 2.

War is a very destructive activity, North Korea should think very long and hard before they choose to start another one, lest any dams they rebuilt are destroyed a second time.

"NK has said to America many times, you stop and we will stop."

I believe you might be factual incorrect in this claim. In 1994, when Washington and Pyongyang last agreed to a freeze on North Korea’s plutonium production, Kim’s father, Kim Jong-il, broke the deal, embarking on a secret uranium program.

When you agree you will stop, then embark on secret programs people tend you get frustrated with you and name in their axis-of-evil lists. All very dramatic, but understandable in the circumstances.

Wow. Just reading these threads proves the education system in NZ has totally collapsed since WW2. There are so many uneducated and ignorant comments here it just proves war will always be with us. I kind of thought this site might be a forum for semi educated people but I was wrong. The anti-American comments are spewed out only by people who were not around when America, along with their allies, including NZ, beat back the disgusting mentality of the Japanese and Germans of the time. Do not for one moment think the world would be a better place run by Asians and their atrocious record of human rights abuse. Not everything New Zealand and America and their Allies do is right, but their mistakes pale in comparison to the Asians and Germans over the years. You people are just plain frigging ignorant.

Yes TuaWai Smith how dare these commenters criticize our dear and glorious leader the United States.