Geopolitics

North Korea: China Hardens Stance On "Troublemaking" Neighbor

Keeping Kim in check
Keeping Kim in check
Sun Xingjie

BEIJING - On April 6, China's new Foreign Minister Wang Yi discussed the North Korean situation on the phone with UN Secretary-General Ban Ki-Moon.

Wang made China’s stance quite clear: it will not allow "troublemaking" at its doorsteps. This is the toughest talk to date from the Chinese government, and its intention is clear: to defuse North Korea’s provocations.

Over the past month, North Korea has continuously ramped up its bellicose rhetoric to test the international community's bottom line.

First it cancelled both its 60-year-old armistice agreement as well as its hotline and nonaggression pact with South Korea. Then it announced it was in a “state of war” with South Korea and warned that any provocation by Seoul and Washington would trigger a nuclear-war. It then positioned its forces to attack U.S. military bases in the Pacific – Guam and Hawaii – and restarted its Nyongbyon nuclear facility.

North Korea has become the focus of global media attention. Even the Cuban revolutionary leader Fidel Castro wrote a column urging North Korea to use restraint and to refrain from embarking on nuclear war. Obviously the threat of a Korean war has reached the bottom line of world peace.

As North Korea's close neighbor, it is not possible for China to stay out of this. And as a global power it's obligated to mollify this escalating belligerent rhetoric.

Wang’s position is the consistent stance of the Chinese government, which is solving the problem through negotiation, promoting the denuclearization of the Korean Peninsula and maintaining its peace and stability. But at the same time, Wang's statement that “Beijing opposes any provocative words and actions from any party in the region and does not allow troublemaking at the doorsteps of China” is quite interesting.

Who is “provoking” the crisis on the Korean Peninsula? The recent escalation started after North Korea launched a rocket and carried out a third nuclear test. As a consequence, the UN Security Council voted sanctions against North Korea, who responded by adopting an even tougher stance and threatening the U.S.-South Korean military alliance with preemptive nuclear strikes.

Objectively, North Korea's crude nuclear devices and rockets do not constitute a threat to the U.S., though it does pose a certain threat to South Korea and Japan. However, war is not a trifling matter. The fact that the U.S. has deployed its most advanced fighter jets and warships to the region has further escalated the conflict.

The boundary between the one provoking the crisis and the one who is being provoked is blurred. China is worried that a mistake in this war of intimidations could lead to a real war.

Focus on war, not on peace

China, by saying it is opposed to “troublemaking at its doorsteps” is stating explicitly that it will not accept a second Korean War.

The Korean War was the product of the Cold War. The most important issue for China today is to cross the "middle-income trap" and realize its goal of a Chinese Dream.

Chinese President Xi Jinping said in the opening speech at the Baoa Forum for Asia, this week: "No one should be allowed to throw a region, and even the whole world, into chaos for selfish gains."

North Korea has been pursuing its “Son’gun” Military First policy for nearly 20 years. This policy prioritizes the army and military spending over the rest. Meanwhile, its economy is stagnating and its people are experiencing none of the increased development and quality of life that the rest of Asia and the world have been experiencing.

Though Kim Jong-un says he plans to develop his country’s nuclear force parallel to economic construction, by restarting the mothballed Yongbyon nuclear facility while closing down the Kaesong industrial park, it’s evident that North Korea is putting the focus on war rather than on peace.

For a regime with a closed economy that neglects its population, economic sanctions are not going to be effective. It will be like asking a skinny person to stay thin – it won't be difficult for them.

The way forward for the Korean Peninsula lies in multilateral negotiations, as advocated by Foreign Minister Wang when he called for the “restoration of six-party talks and to bring the issue back to the track of dialogue.”

The fact that North Korea unilaterally ended the Korean Armistice Agreement and reactivated its nuclear facilities not only disregards the fact that China is one of the signatories of the agreement, but has also kicked over the six-party talks table.

Kim Jong-un's personal message to Dennis Rodman that he would like President Obama to give him a call was his attempt at establishing a bilateral U.S.-North Korea relationship to show that North Korea is on “equal footing” with the world’s most powerful country.

By insisting on six-party talks Wang quickly extinguished Kim's dream of dealing with the U.S. alone.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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