SEOUL - PRESS BULLETIN; August 11, 2009

UNCLAS SECTION 01 OF 05 SEOUL 001264

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SUBJECT: SEOUL - PRESS BULLETIN; August 11, 2009

TOP HEADLINES
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Chosun Ilbo
Hyundai Group Chairwoman Likely to Meet Kim Jong-il Today

JoongAng Ilbo
Strategy and Finance Minister Denies
Expansion of Real Estate Restrictions

Dong-a Ilbo
Daegu, Osong Picked for High-tech Medical Complexes

Hankook Ilbo, Seoul Shinmun
Possibility that Hyundai Group Chief May Return with Hyundai Asan
Employee Detained in N. Korea, after Meeting
with N. Korean Leader Kim Jong-il

Hankyoreh Shinmun
Sharp Surge in Stock and Real Estate Markets Feared to Deepen
Economic Polarization in ROK

Segye Ilbo
Diplomatic Source in Seoul: "U.S., N. Korea
to Resume Bilateral Talks Sooner or Later"


DOMESTIC DEVELOPMENTS
--------------

Hyundai Group Chairwoman Hyun Jung-eun arrived in Pyongyang
yesterday afternoon as a "de facto special envoy" for the ROKG to
win the release of an ROK employee who has been held incommunicado
in North Korea for 134 days. (All)

A senior ROKG official was quoted as saying: "Chairwoman Hyun is
expected to meet North Korean leader Kim Jong-il on August 11. There
is a possibility that they may discuss pending issues, including the
resumption of tours to Mt. Kumgang and ways to maintain and develop
the joint Kaesong Industrial Complex, in addition to the release of
the Hyundai Asan worker." (Chosun)


INTERNATIONAL NEWS
--------------

According to a diplomatic source in Seoul, the U.S. conveyed to
North Korea what steps the North should take to resume talks (with
the U.S.) This was done via the New York channel between the two
countries and the recent visit to Pyongyang by former President Bill
Clinton. The source went on to say: "Since North Korea responded
positively, it seems that U.S.-North Korea talks will take place
sooner or later." (Segye)


MEDIA ANALYSIS
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-N. Korea
--------------
Conservative Segye Ilbo ran a front-page report that cited a
diplomatic source in Seoul as saying yesterday that the U.S.
conveyed to North Korea what steps the North should take to resume
talks (with the U.S.) This was done via the New York channel between
the two countries and through the recent visit to Pyongyang by
former President Bill Clinton. The source was further quoted:
"Since North Korea responded positively, it seems that U.S.-North
Korea talks will take place sooner or later."

The Segye Ilbo report also quoted the U.S. Ambassador to the UN
Susan Rice as urging North Korea during her August 9 CNN interview
to uphold its international obligations and resume international

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negotiations (Six-Party Talks),saying: "In that context, we have
said that we would be prepared to have a direct dialogue."

Right-of-center JoongAng Ilbo, meanwhile, headlined its inside-page
article: "Washington Has Changed since Former President Clinton's N.
Korea Visit." The article noted that chances are growing that
former President Clinton's surprise visit to North Korea may provide
momentum to improve relations between the two countries. The
article quoted Secretary of State Hillary Clinton as saying during
an August 9 CNN interview: "What we're hoping is ... (that former
President Clinton's visit) will perhaps lead the North Koreans to
recognize that they can have a positive relationship with us."
White House National Security Adviser James Jones was also quoted as
saying: "North Korean leader Kim Jong-il appeared to be in control
of his government and sounded very reasoned. He seemed in control
of his faculties."

All ROK media gave prominent play to Hyundai Group Chairwoman Hyun
Jung-eun's arrival in Pyongyang yesterday afternoon as a "de facto
special envoy" for the ROKG to win the release of an ROK employee
who has been held incommunicado in North Korea for 134 days.

Conservative Chosun Ilbo quoted a senior ROKG official as saying:
"Chairwoman Hyun is expected to meet North Korean leader Kim Jong-il
on August 11. There is a possibility that they may discuss pending
issues, including the resumption of tours to Mt. Kumgang and ways to
maintain and develop the joint Kaesong Industrial Complex, in
addition to the release of the Hyundai Asan worker." Chosun also
speculated that since inter-Korean governmental talks have been
suspended, North Korean leader Kim may deliver a message to the ROK
through Hyun.

Right-of-center JoongAng Ilbo editorialized: "North Korea may have
felt that its continued detention of the ROK worker would put
obstacles in the way of improving relations with the U.S., following
its release of two U.S. journalists. ... The problem is that North
Korea will show a conciliatory attitude toward improving general
inter-Korean ties. ... The resumption of tours to Mt. Kumgang means
that cash will flow into the North. This could run counter to
international sanctions to punish the North's nuclear test. ... It
is time for the two Koreas to take a more forward-looking and
broader approach toward each other. ... The ROKG should do its
utmost to maintain this favorable inter-Korean atmosphere created by
Chairwoman Hyun's visit, especially given the signs of a thaw in
U.S.-North Korea relations following former President Clinton's
visit to North Korea."

Moderate Hankook Ilbo observed in an editorial: "It is very
encouraging that North Korea allowed Chairwoman Hyun an overland
trip to Pyongyang. (The overland route was recently open to only
certain figures, including the late former President Roh Moo-hyun
for the second inter-Korean summit in 2007.) ... It would be highly
problematic if North Korea intends to limitedly improve relations
with the ROK in order to circumvent UN Security Council Resolution

1874. Improvements in inter-Korean relations should be made in
tandem with North Korea's return to the nuclear disarmament talks."


OPINIONS/EDITORIALS

HOPING THAT HYUN'S N. KOREA VISIT LEADS TO CHANGE IN INTER-KOREAN
RELATIONS
(Hankyoreh Shinmun, August 11, 2009, page 31)

Hyundai Group Chairwoman Hyun Jung-eun arrived in Pyongyang
yesterday to negotiate the release of a Hyundai Asan employee, who
has been held incommunicado in North Korea. This is welcome news
because inter-Korean talks have been deadlocked. We expect that her
visit to Pyongyang will mark a momentous turning point in the
deteriorating inter-Korean relations.

First of all, North Korea should make up its mind to release the ROK
employee. As former U.S. President Bill Clinton returned with two
U.S. journalists after his visit to North Korea, we expect

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Chairwoman Hyun will bring the ROK worker along with her when she
returns. Even if the ROK and North Korea are severely at odds with
each other, North Korean authorities should not hold an ROK civilian
hostage. Some observers say that Hyun's visit comes at a time when
North Korea is showing active interest (in engagement). We hope
that this is true and Hyun's visit will serve as an opportunity to
resume the suspended tours to Mt. Kumgang, and restart key
inter-Korean economic cooperation such as the troubled joint Kaesong
Industrial Complex project.

The ROKG should also not miss this opportunity. The ROKG cautioned
against stretching the meaning of Chairman Hyun's visit, saying that
her visit is just for a business purpose. We want to see this
simply as part of Seoul's strategy not to publicize its back-channel
efforts. However, compared to the Clinton visit, the ROKG's role in
achieving Chairwoman Hyun's visit appeared to be very small. We
even suspect that the ROKG is trying to pass responsibility for
resolving the situation to Hyundai, which is suffering from the
suspension of inter-Korean cooperation projects. Hyundai may
inevitably have to be at the forefront of inter-Korean dialogue, but
in the end, it is the ROKG that should resolve issues with the
North. In this context, the statement by a high-ranking ROKG
official that "since it is an issue involving Hyundai Asan, Hyundai
Asan should take responsibility," is highly disappointing.

The Clinton visit is showing signs of bringing big changes to the
situation on the Korean Peninsula. There are also some U.S. media
reports that the Obama Administration is shifting the focus of its
North Korea policy from nuclear dismantlement to nuclear
containment. If we only adhere steadfastly to our stance and refuse
to budge an inch in a self-righteous way, all the efforts that we
have made so far (toward better cross-border ties) could go up in
smoke. We have already been taken aback by Clinton's visit. We
hope that the ROKG will take a more active stance in efforts to
break the deadlock in inter-Korean relations.


FEATURES
--------------

WASHINGTON HAS CHANGED SINCE FORMER PRESIDENT CLINTON'S NORTH KOREA
VISIT
(JoongAng Ilbo, August 11, 2009, Page 4)

By Washington Correspondent Kim Jung-wook and Reporter Ye
Young-joon

Secretary of State Clinton: "We hope (the Clinton visit) will lead
to a positive relationship between the U.S. and North Korea"

National Security Adviser Jones: "Kim sounded very reasoned"

Chances are growing that former U.S. President Bill Clinton's
surprise visit may serve as momentum to improve U.S.-North Korea
relations, which have been strained due to the North Korean nuclear
issue. The USG repeatedly argued that the Clinton visit was a
private humanitarian mission aimed at winning the release of the two
U.S. female journalists detained in the North. However, less than a
week after the former President returned home, high-ranking
officials are saying that the visit might lead to an improvement in
U.S.-North Korea relations.

U.S. Secretary of State Hillary Clinton said during an August 9
(local time) interview with CNN, "We have no designs on North
Korea," adding, "So, we reached out to the North Koreans and made it
very clear that we wanted to create that kind of engagement." After
expressing concern about the possibility of the North exporting
nuclear technology, she noted that the Clinton visit "will perhaps
lead the North Koreans to recognize that they can have a positive
relationship with us."

White House National Security Adviser James Jones, who met with
former President Clinton before Clinton's possible briefing to
President Obama this week, hinted that the significance of the

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Kim-Clinton meeting goes beyond the release of the journalists.
Appearing on CBS and NBC on August 9, Mr. Jones stated that dialogue
between the two was carried out in a mutually respectful and sincere
atmosphere, adding, "The North Koreans have indicated that they
would like a better relation with the U.S." He also noted, "Mr. Kim
appeared to be in control of his government and sounded very
reasoned." Diplomatic circles in Washington said that it was
unusual for Mr. Jones, a cautious person who retired as a four-star
general, to publicly make the statements ahead of a briefing to the
President. Particularly regarding the description of North Korean
leader Kim Jong-il, there is a sharp departure from the Bush
Administration, which described Kim as being "unpredictable and
uncontrollable."

Some observers caution against reading too much into the Clinton-Kim
meeting. A high-ranking ROK foreign ministry official said, "A
message continuously coming out of the U.S. is that the Clinton
visit has no political and diplomatic meaning. Many people say that
the meeting could likely bring change, but personally, I do not
think that the meeting will have much impact."

The Obama Administration, however, keeps its doors open to
negotiations with the North, and the atmosphere in Washington is
also changing. The U.S. Department of State is reportedly using the
North Korean mission to the U.N. in New York to make progress in the
nuclear negotiations, and at the same time, it is considering
expanding contact with the North by inviting North Korean officials
through private institutes, such as the National Committee on
American Foreign Policy and the Center for Strategic and
International Studies. In addition, a high-ranking diplomatic
source in Washington said that at last week's meeting in Hawaii, ROK
Chief Negotiator to the Six-Party Talks Wi Sung-lac and his U.S.
counterpart Sung Kim discussed how to deal with the North when the
nuclear negotiations, including the Six-Party Talks, resume.


"U.S.-NORTH KOREA TALKS WILL RESUME SOONER OR LATER"
(Segye Ilbo, August 11, 2009, Front page)

By Reporter Lee Sang-min

The U.S. delivered its preconditions for resuming talks with North
Korea and the North responded positively.

A diplomatic source (in Seoul) says that North Korea only has to
make a strategic choice.

The U.S. and North Korea reportedly agreed, to some extent, that the
two sides will resume (bilateral) talks on the North Korean nuclear
issue under preconditions (set out by the U.S.)

U.S.-North Korea talks, which will be similar to the "Berlin Talks"
held between former Assistant Secretary of State for East Asian and
Pacific Affairs Christopher Hill and North Korean Vice Foreign
Minister Kim Kye-gwan, are likely to take place in order to put the
Six-Party Talks back on track.

A diplomatic source in Seoul said on August 10 that the U.S.
conveyed to North Korea what steps the North should take to resume
talks (with the U.S.) This was done via the New York channel
between the two countries and through the recent visit to Pyongyang
by former President Bill Clinton. The source was further quoted:
"Since North Korea responded positively, it seems that U.S.-North
Korea talks will take place sooner or later."

The U.S. has maintained its position that it will restart bilateral
talks with North Korea if Pyongyang takes action to correct its
"wrong behavior," which has been evident by long-range rocket
launches, suspending the dismantlement of its Yongbyon nuclear
facilities, and a second nuclear test.

The source said that the U.S. explained to North Korea in detail
what the North will gain and that the U.S. has been fully prepared
(to provide the gains.) The source went on to say that North Korea

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only has to make a strategic choice.

In this regard, the U.S. Ambassador to the UN Susan Rice urged North
Korea during her August 9 CNN interview to uphold its international
obligations and resume international negotiations (Six-Party Talks),
saying: "In that context, we have said that we would be prepared to
have a direct dialogue."

A high-ranking Foreign Ministry official said during a closed
briefing the same day that following the release of two U.S.
journalists by North Korea, many people paid attention to the U.S.'
softer stance on North Korea. The official noted, however, that
attention should turn to what steps the North will take.

Another diplomatic source in Seoul said that two scenarios have been
raised under the precondition that North Korea will halt steps to
reverse disablement of the Yongbyon nuclear facilities. Under the
first one, U.S.-North Korea will hold bilateral talks in a third
country and under the second one, Special Representative for North
Korea Policy Stephen Bosworth will visit North Korea.


STEPHENS