The Real Reason China Won’t Koreanize — And Why Pyongyang Knows It Best | Digging into China

Hi, I'm Dong Xiong. Welcome to Digging into China, where we take a deep dive into what's really happening in China and share some unique insights. The country that fears China turning into another North Korea the most is not the United States or Japan, it is North Korea itself. If the Chinese Communist Party truly copied the North Korean model, the first to suffer and starve would be Kim Jong Un. I'm calling it right here. Today we are going to carefully analyze whether China will actually Koreanize, using hard fiscal numbers and organizational realities to settle the question and see if the CCP even has the capacity to make it happen. I know this might sound sudden, but let me stress one key point. If the CCP really did become like North Korea, there would soon be no North Korea left. Although the economic gap between the two countries is enormous, their basic survival logic is the same. Both systems ultimately depend on external transfusions to keep functioning. Before answering whether the CCP will Koreanize, we need to define clearly what Koreanization means. The term is used a lot these days, but without a precise standard. Most people rely on intuition and immediately picture Kim Jong Un when they hear it. Let's remove the raw emotion and break it into two versions. The strong version means China fully transforms into a North Korea style state. Hereditary leadership, nationwide rationing of goods, foreign trade reduced only to essential survival supplies, and the entire governance system downgraded into a low-functioning, almost primitive command structure. All four elements occurring together would constitute full, strong Koreanization. The weak version is more limited. It involves harsher personal dictatorship, even tighter and more extreme information controls, greater barriers to moving capital out of the country, but the market mechanism and foreign trade linkage continue to function in some capacity. For the strong version with Xi Jinping in charge, I don't believe it. Any major extreme political shift, whether in a positive direction or a disastrous one, requires fierce, powerful, sometimes even delusional or fanatical leaders. Think Mao Zedong, Stalin, or Hitler. Xi Jinping, no matter how you examine him from near or far, does not match that mode. After consolidating power over figures like Zhang Youxia, he spent more than half a year hiding in Beijing, too scared to show his face openly. He comes across as cautious and timid, not a bold strongman or a mad visionary. Even in handling Zhang Youxia, there has been no final resolution or punishment, and he still retains his position as a National People's Congress representative. Just on the first requirement alone, turning leadership into a hereditary system like North Korea, can Xi really achieve it? The economic constraints and political obstacles would be massive. This is exactly why the CCP gritted its teeth and launched reform and opening decades ago. They were facing starvation themselves. Let's examine the economics. For the weak version, we cannot completely dismiss it. In fact, aspects of it are already underway. Capital controls are tightening. Exiting the country has become more difficult. Officials need approval for overseas travel, and supervisory power is being pulled back to the center. These are observable signs of the weak version. The confusion in public discussion comes from mixing the evidence. People take signs of weak Koreanization and use them to argue for the strong version. But does the CCP have the economic base for the strong version? In 2025, China's general public budget revenue stood at 21.6 trillion RMB, with tax revenue at 17.6 trillion RMB. Yet, expenditures reached 28.7 trillion RMB. The gap is routinely filled by issuing more debt. Total foreign trade volume was 45.5 trillion RMB, roughly one-third of GDP. So what keeps the CCP fiscal machine running? Debt, export profits, and monetize the surplus generated by wages, consumption, and land sales in the market economy. Now imagine Xi Jinping decides to transform the system back into full nationwide rationing. What would happen? The tax base would shrink immediately. But the rigid spending on pensions, medical insurance, and especially debt interest payments would not disappear. Local government debt, both official and hidden, already exceeds 120 trillion RMB. Annual interest payment alone costs 3 to 4 trillion RMB. That figure is roughly equal to the combined total of national stability maintenance spending and military expenditure. Under a rationing system, how would they manage? The core problem with rationing is that collective labor output ends up smaller than what individuals would produce on their own. Factories that once produced 100 pairs of shoes daily would either fail to meet quotas or produce goods that meet quotas but are unusable, just like the Soviet Union churning out only right-foot shoes to fulfill targets. Goods circulation would collapse. The CCP's main tax sources come from the production and circulation process. If circulation is eliminated and everything shifts to direct rationing, the first victim would not be ordinary citizens, it would be the CCP's own fiscal system. Consider the 80 million people supported directly by government finances. The CCP might ignore ordinary people, but it cannot ignore these 80 million mouths. They form the core foundation of the regime. Their salaries, pensions, and medical benefits cannot simply be abandoned. If the CCP stopped supporting them, the system would collapse before Koreanization was ever completed. The same applies to foreign trade. The largest tax base. A sharp contraction in trade would hit coastal factories, migrant workers, and the RMB exchange rate hardest. If the CCP refused to let prices adjust naturally, it would have to pour in subsidies and impose strict capital controls. Every one of these measures requires more administrative effort and more spending. Local governments would face widening deficits and turn to the central government for bailout. Since they are simply executing central directives, provinces and sectors would queue up in Beijing demanding money. The crying we see now would turn into desperate pleas at the gates of Zhongnanhai. Localities could devolve into bandit-like behavior, robbing not only citizens but the central government itself. Every step in this chain burns money. None of it saves any. Even North Korea is not pure rationing. Satellite images reveal more than 400 officially permitted markets. Kim Jong-un collects rents from them worth tens of millions of dollars each year. Ordinary North Koreans rely on these markets to supplement their rations. Even North Korea preserves markets as a source of revenue. For a massive economy with 45.5 trillion RMB in foreign trade, to completely eliminate the markets would be nothing short of fiscal suicide. Full Koreanization is not a cost-saving reform. It is an extremely expensive institutional overhaul. Now consider the organizational barriers. The CCP operates as a system of rotating power sharing. While Xi's personal centralization has increased, the price is growing uncertainty in basic rules. Power still flows through party congress, cadres appointment, and layered fiscal hierarchies. It is not passed down through bloodlines. North Korea achieved three generations of hereditary succession. The objects of loyalty are fundamentally different. CCP cadres are not truly loyal to any supreme leader or abstract Marxist theory. Their real loyalty is to the division of spoils system. Today I serve the system, tomorrow you guarantee me a position, opportunities for personal gains, asset safety, and a future for my children. This spoils sharing rule is the true foundation of the CCP legitimacy. Ideology is secondary. Imposing hereditary succession would amount to the largest internal power struggle the party has ever seen. It would not be about robbing ordinary people. It would be insiders fighting each other for shares. China's system is now too large and complex. Managing taxation, finance, power grids, and high-tech sectors requires millions of skilled professionals. Blocking hereditary rule is not driven by morality or pretended inner-party democracy. It is dictated by the bureaucratic system itself. Anyone who tries to break it risks destruction. Some might counter that elites can be purged individually, and others will compete for the vacated spots by showing loyalty. That logic has some truth in personal dictatorship, which excels at fragmenting information and raising the cost of collective action. But look at concrete actions rather than rumors. Has Xi publicly groomed a blood relative as successor? Have state assets been restructured so that a single family can inherit full control? Until those steps occur, hereditary succession remains impossible. Let's add a historical perspective. Mao's era showed that a regime can shift ruling costs onto human lives. Millions suffered and died, and tens of millions of educated youth were sent to the countryside to absorb unemployment. Some people argue that since the system survived then, it can survive anything now. But the conditions today are entirely different. In Mao's time, 80% of the population lived in rural areas with no private assets, no savings, and no pensions. The countryside served as a dumping ground for excess people and unrest. Today, after decades of market reform and asset monetization, ordinary Chinese have tied most of their lifetime wealth, often 60% or more, into housing. Behind those houses are mortgages, behind the mortgages are banks, and behind the banks stand local governments. Trying to dump heavy costs onto people now would trigger widespread defaults and flow directly through the financial system into the CCP's own balance sheet. The 1988 events offer a warning. After Mao's death, even Deng Xiaoping struggled to contain the situation. Prices surged 18.5% that year, leading to major unrest the following year. Mao's model only worked in a society where people had nothing left to lose. That society no longer exists. China is now highly urbanized and deeply integrated into asset markets. Reversing this would create asset losses and a resistance far greater than in the past. Ironically, the bureaucratic class itself benefited most from asset monetization. The final major barrier is the fiscal scissors effect. Imagine two lines, one representing the CCP's revenue extraction capacity, the other the total cost of maintaining control. When the cost line stays above the revenue line for long, the system enters a zone of extreme pressure. The CCP regime is essentially a monthly subscription business. Wages for millions of civil servants, police funding, pensions, and local debt interest must be paid on schedule every month. Stability is not automatic. It is purchased month after month. International organizations have warned about local financing platforms facing short-term debt rollovers and severe cash flow problems. If the CCP pursued full Koreanization, the first victims would be the grassroots employees who depend on fiscal support. Why not simply abolish monetization entirely? Ask Xi Jinping if he dares. After one small plane crashed into Beijing's City Tower, Xi was so terrified that he immediately slammed the brakes on the low-attitude economy, a flagship policy he himself had vigorously promoted not long ago. This is not the behavior of a bold revolutionary. The military reality also does not support it. The current trajectory is not Kim Jong-un's path. Markets must be preserved, but control tools are embedded inside them. The CCP has evolved. It no longer treats the market as an enemy, but as a powerful tax extraction machine. Some argue that the CCP's real goal is maximizing survival probability rather than economic growth, making voluntary poverty a logical choice. External shocks such as war, blockade, or sanctions could suddenly shift the pay-off matrix and give rationing temporary legitimacy. So the chance of strong Koreanization is not zero. However, digital totalitarianism does not reduce the actual cost of physical control. Algorithms can flag problems, but they cannot resolve them. The bottleneck simply shifts from detection to execution. Costs are rising, not falling. If the economy collapses, subsidies for chips, cloud platforms, and AI disappear. The so-called new quality productive forces depend on market pressure. Without the market, there is no revenue to sustain them. Digital tools therefore support the weak version, keep transactions alive so the party can tax them rather than destroying transactions altogether. Even wartime controls are usually temporary. History shows many countries adopt rationing and capital controls during conflict, only to restore markets afterward. Temporary measures do not equal permanent Koreanization. Solidifying into a stable North Korea model would also require permanent fixation of power, bloodline succession, and long-term restriction of foreign trade to a few lifelines. Missing any element keeps it as wartime economics rather than a final system. Let's run one final thought experiment. Suppose the strong version actually occurs under Xi Jinping. Who dies first? North Korea. Bilateral trade between China and North Korea reached $2.75 billion in 2025, up 25%. That amount is triple for China, equivalent to roughly four hours of its total foreign trade. North Korea's entire foreign reserves are estimated at comparable to an average Chinese prefecture-level city. Over 90% of North Korea's trade depends on China. Its key exports is items like wicks. China supplies crude oil at the minimum level allowed under UN sanctions, just enough to survive, not enough to grow. Recent dealings with Russia involving shells and troops may have brought in revenue, but much of it is not cash. It is barter and technology exchanges, and the income would vanish if fighting in Ukraine stops. If China pulls its own global connections, North Korea would be the first to suffocate. This has happened before. After the Soviet Union collapsed in 1991, aid and subsidized oil stopped, North Korea's energy imports fell by three quarters, GDP contracted 25-30%, urban rations dropped from 585 grams per person per day to as low as 30 grams. Famine deaths reached hundreds of thousands to millions. In 1993, China briefly provided aid but cut it when facing its own shortages, worsening the crisis. A fully Koreanized China would lose both the ability and the willingness to support North Korea. It would struggle with its own export collapse and foreign exchange shortages while being the world's largest importer of oil and grain. The 1993 event served as a warning. Strategically, the motivation is also missing. The CCP maintains North Korea primarily as a buffer zone. If China itself becomes fully isolated, that buffer loses much of its value. Two closed, self-sufficient, military-first regimes would compete for scarce resources rather than support each other. North Korea's survival depends precisely on China not copying its model. The CCP itself understands best that Koreanization is a dead end because it is already a much larger version of the same dependent structure. Kim Jong-un relies on Chinese oil and grain, and the CCP relies on global trade, oil, soybeans, and chips. Foreign trade still accounts for one-third of GDP and remains the only truly functioning economic engine. Reform and opening was never about the CCP's brilliance. It was emergency self-rescue by a starving patient climbing onto the operating table to insert an IV drip. Once inserted, that drip cannot be removed. One end is attached to the regime's own lifeline. The other connects to the interests of the entire CCP apparatus and the massive deaths of hundreds of millions of citizens, especially housing loans. The CCP cannot pull the tube, but it can turn the hospital ward into a prison. The sun still rises every day, but the nurses have been replaced by guards. National security officials now lecture on economic policy while technical experts are sidelined. This is the true nature of weak Koreanization. If China ever went for North Korea, Kim Jong-un would be the first to die, followed by the CCP itself. Deng Xiaoping chose not to confront the West completely because a regime's primary goal is survival, not permanent confrontation. Mao's stubbornness brought the system to the brink of collapse. By 1976, Deng Xiaoping inserted the tube to save the regime. From that moment, legitimacy shifted from ideology to providing the rice ball. The rice ball is tied to the market, and the market is tied to the world. Pulling the tube equals suicide. Xi cannot become a Mao-style cult figure who bypassed the system. He must rely on the bureaucracy. He can add restrictions inside the market, but he cannot dismantle the post-reform spoils structure. Despite the large number of corruption cases, the fundamental profit foundations of the bureaucracy have not changed. Thank you so much for watching. If you find this helpful, please like it, drop a comment below, and hit the subscribe button right here. It really helps YouTube suggest my videos to others. I'll be back with more content soon. Until then, be well.