Kim has good reason to frown.

What's Really Missing in North Korea

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The world tends to roll its eyes at the verbal grenades North Korea tosses around so gleefully and indiscriminately, and rightfully so. Funny how we're all so scared now that Kim Jong Un has gone silent.

Has the Dear Leader, who has not been seen in public in over a month, been deposed in a palace coup? Might Kim be comatose in a hospital ward, leaving his sister to mind the family business? Maybe he's off fishing somewhere in those 46,500 square miles above the 38th parallel. Me, I'm tempted to head across town to Tokyo Disneyland, where, for all we know, Kim is taking selfies with Mickey Mouse.

I've written enough columns on Pyongyang intrigue, interviewed enough Chinese and South Korean officials and met enough North Korean defectors to know two things. One, no one ever really knows the true state of play in the North. Kim's supposed disappearance either isn't a story, or it's the biggest one in Asia this year. Two, it's best to follow the money and, on this score, there's reason to think Kim is increasingly on the ropes.

That's not to say the North Korean leader has been removed. The most common explanation for his absence from public view -- that he is recuperating, possibly from an ankle injury -- remains the likeliest. I tend to agree with John Delury of Seoul's Yonsei University when tells Bloomberg's Sam Kim: "I'm skeptical about all the interesting theories, because we have a pretty good, less interesting theory that would explain it: something's up with his health, but not life-threatening."

At the same time, what's most intriguing about North Korea these days are signs China is fed up with Kim's antics and may be tightening the financial screws. Concrete evidence is hard marshal, of course; Beijing keeps a tight lid on its machinations at home, never mind its relationship with Pyongyang. But whereas former Chinese President Hu Jintao maintained a working relationship with his North Korean counterpart Kim Jong Il, who died in December 2011, China's current leader Xi Jinping has been decidedly cool toward Kim the younger.

Beijing can't be happy about last year's purge of Jang Song Thaek, Kim's uncle and de facto deputy. Jang was widely viewed as a Chinese-style economic reformer and, perhaps by extension, a threat to Kim's hold on power. Many outside observers (me included) trafficked in the theory that the Swiss-educated, Michael Jordan-obsessed Kim would open North Korea to the world. Instead, he's proved to be even more paranoid and trigger-happy than his late father. That's led China to accept more United Nations sanctions against Pyongyang, choking off the flow of Hennessy cognac, Rolexes, Cadillacs and fur coats the Kims long passed out to loyalists.

According to some reports, China has also begun making its border with North Korea less porous, impeding the flow of money, luxury goods and other contraband. Border officials are reportedly limiting the amount of cash Chinese traders can take into North Korea, thus undermining the fledgling markets that have started to develop there.

"Closing this border to such transit will cause the leadership in Pyongyang significant pain," Joseph DeTrani, a North Korea expert and president of the Intelligence and National Security Alliance, told a U.S. Congressional committee on June 7.

According to the Bank of Korea, the North's economy grew 1.1 percent in 2013. My guess would be that it's since slowed, partly because of a dip in demand in China itself and partly because of tighter border controls. That poses some risk to Kim, who must constantly appease a Pyongyang elite that has gotten used to rising incomes and access to modern consumer goods.

Worries about the economy could explain last week's high-level North-South tete-a-tete in Seoul. The surprise visit by Kim's top aides -- including Vice Marshal Hwang Pyong So -- comes amid South Korean President Park Geun Hye's push for reunification on the grounds it would be an economic bonanza.

Again, I'm not in Pyongyang and I can't say whether Kim has lost his grip on power. Connecting the dots, though, it seems a reach that the North Korean economy is enjoying a period of stability (as some experts argue) while Kim's key benefactor cuts his allowance. Given how the world and stark economic realities appear to be closing in on Kim, he may well wish he could disappear.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Willie Pesek at wpesek@bloomberg.net

To contact the editor on this story:
Nisid Hajari at nhajari@bloomberg.net