China Reuniting the Korean Peninsula — By Bill Poulos

Bill Poulos is an experienced investor, educator, and author. For more from Bill Poulos read his recently published thoughts, “Fear and Greed Drive the Stock Market” on his site billpoulos.com. Bill also authored the book, “Simple Options Trading For Beginners: How to trade options from A to Z explained in plain English”.

https://www.reuters.com/article/us-northkorea-southkorea/south-north-korea-to-hold-historic-first-summit-in-decade-at-dmz-idUSKBN1HX2I6

If North and South Korea reunite by one means or another, well, first and foremost they’d have a dramatic impact on the Korean Peninsula economically.

The strength of the south would be used to leverage the extremely poor conditions in the north.

Over a period of five to ten years, this would bring the north up to par with the south — unleashing an economic juggernaut that would be highly competitive with Japan.

That’s on the economic part so that would only be good.

That would strengthen current South Korea’s stand in the world on even a more significant role as the Korean Peninsula.

The back story on that, though, is if that were to happen, it would be a direct acknowledgement of the power of Xi Jinping and his influence in getting Kim Jong-un to the negotiating table to give up their nuclear arsenal. Xi Jinping is the current General Secretary of the Communist Party of China and the President of the People’s Republic of China.

The world would know that China was pulling the strings. China was calling the tune.

Yes, Trump’s hard line on North Korea is a key enabler to bring this all about, but it wouldn’t have any legs at all without China.

That’s the big story there. China would become even more powerful in the world as the real enabler to reuniting the Korean Peninsula.

The stock market would love such an event, of course, because that’s one less geopolitical black swan that could potentially sink the stock market. The market can do nothing but benefit from that. However, a unified Korean Peninsula becoming a stronger economic power could pose additional trade challenges for the United States.