Overnight, we got two notable headlines out of the Far East.
First, the yuan devaluation continued unabated with the RMB falling to five-year lows and the spread between the onshore and offshore spots blowing out to record wides.
Second, Kim Jong-Un detonated an H-bomb. Or so Pyongyang says.
Around one hour after detection devices picked up a 5.1 seismic event at or near the Punggye-ri nuclear test site, a North Korean announcer appeared on state-run television to read a statement explaining why the country carried out the test. “This is the self-defensive measure we have to take to defend our right to live in the face of the nuclear threats and blackmail by the United States and to guarantee the security of the Korean Peninsula,” she said. Here's the clip which (try to watch it with a straight face):
Tremors from the blast could be felt in China.
This was the country’s fourth nuclear test and comes less than four months after the North restarted its main Yongbyon nuclear complex [11], which had been shuttered since 2007. The North’s "mighty" nuclear arsenal has been improved in “both quality and quantity as required by the prevailing situation,” Pyongyang’s atomic agency said in September.
[12]
"If the U.S. and other hostile forces persistently seek their reckless hostile policy towards the DPRK and behave mischievously, the DPRK is fully ready to cope with them with nuclear weapons any time,” the agency’s director added, for good measure.
Previously, the North’s nuclear tests involved plutonium weapons and if the country has indeed tested a hydrogen bomb, it would mark a serious escalation. "Another test by itself would not be that remarkable [as] the North is believed to have enough plutonium for eight to 12 weapons, [but] if the North Korean claim about a hydrogen bomb is true, this test was of a different, and significantly more threatening, nature," The New York Times notes [13], adding that "in recent weeks, Mr. Kim boasted that North Korea had finally developed the technology to build a thermonuclear weapon, [a] claim [which prompted] the White House to express considerable skepticism." Here's more:
Weapon designers can easily boost the destructive power of an atom bomb by putting at its core a small amount of tritium, a radioactive form of hydrogen.
Lee Sang-cheol, the top nonproliferation official at the South Korean Defense Ministry, told a forum in Seoul last month that although Mr. Kim’s hydrogen bomb boasts might be propaganda for his domestic audience, there was a “high likelihood” that North Korea might have been developing such a boosted fission weapon.
And according to a paper obtained by the South Korean news agency Yonhap last week, the Chemical, Biological and Radiological Command of the South Korean military “did not rule out the possibility” of a boosted fission bomb test by the North, although it added it “does not believe it is yet capable of directly testing hydrogen bombs.”
"It’s more like an ordinary atomic bomb test, not a hydrogen bomb," Li Bin, a senior associate focused on nuclear policy at the Carnegie Endowment for International Peace said on Wednesday. That sentiment was echoed by No Hee Cheon, a professor at the nuclear and hydrogen system laboratory of the Korea Advanced Institute of Science and Technology in Daejeon. "A hydrogen bomb is a bomb that explodes using force from the detonation of multiple atomic bombs [and] today’s magnitude falls short of what we would see if a hydrogen indeed was detonated," No said, adding that "the magnitude today is even below the level of an ordinary atomic bomb."
The device had a yield of about 6 kilotones which Yang Uk, a senior research fellow at the Korea Defense and Security Forum says makes it "hard to believe this is a real hydrogen bomb." "They could have tested some middle stage kind (of device) between an A-bomb and H-bomb, but unless they come up with any clear evidence, it is difficult to trust their claim," he said.
"Because it is, in fact, hydrogen, they could claim it is a hydrogen bomb," Joe Cirincione, a nuclear expert who is president of Ploughshares Fund, a global security organization said. "But it is not a true fusion bomb capable of the massive multi-megaton yields these bombs produce".
(North Koreans applaud the announcement)
Be that as it may, the test suggests the North is advancing its nuclear program. "The incomplete data may also point to an increased possibility that North Korea is able to mount [14] a nuclear warhead on a missile and is on the way toward developing an operational weapons program," Bloomberg wrote [14] after the test. Last month, Kim claimed Pyongyang now has the ability to mount a nuclear warhead on a missile, suggesting the country is now capable of making good on threats to nuke the US and other "hostile" nations.
As we wrote moments after the test was announced, Kim may be struggling to keep the North relevant in a world where a series of protracted conflicts in the Mid-East have pushed the reclusive regime and its incessant sabre rattling to the geopolitical backburner. "With Iran being off the table, the North Koreans have placed themselves at the top of the foreign policy agenda as far as nation-states who present a threat to the U.S.", Michael Madden, an expert on the country's secretive leadership, said.
The reaction from the international community was predictable: everyone condemned the test. "North Korea’s nuclear test is a serious threat to our nation’s security and we absolutely cannot tolerate it," Japanese PM Shinzo Abe said. "We strongly denounce it." Beijing - one of Pyongyang's only allies on the world stage - voiced its "resolute opposition" to the blast and says China will lodge a protest. As Reuters writes [15], "The White House said it could not confirm North Korea's claims of miniaturization and a hydrogen bomb test, but added the United States would respond appropriately to provocations and defend its allies."
State television also carried what it says is a hand written letter from the Supreme Leader. "Make the world to look up to our strong nuclear country and labor party by opening the year with (the) exciting noise of the first hydrogen bomb!" the document reads.
Fortunately for the US, Pyongyang says it will only use its new weapon in the event its sovereignty is violated - so bascially, Kim won't be forced to nuke the West Coast unless Washington inexplicably decides to invade North Korea.
Kim - like his father and grandfather before him - enjoys the pageantry of it all and has succeeded in convincing his people that the US is engaged in a perpetual campaign to blackmail the country and undermine the government's efforts to gain international legitimacy. On that note, we close with the following amusing quote from Pyongyang:
"The U.S. is a gang of cruel robbers which has worked hard to bring even a nuclear disaster to the DPRK."