North Korea playing 'clever game' to ramp up China-US tensions

What's behind the tension in the Korean Peninsula?
Why is the US doing military drills with South Korea?

Tensions on the Korean Peninsula are ratcheting up, which is just what North Korea wants, as the reclusive state pits global powers China and the U.S. against one another.

Regional relations, always tenuous, have been particularly strained in recent weeks after South Korea agreed that the U.S. could deploy its the Thaad missile system on South Korean soil. Both countries hope the anti-ballistic missile system would deter North Korean leader Kim Jong-un's regime, which since January has increased its missile test launches in the region.

The U.S.-South Korea deal, however, incurred the wrath of neighboring China, which called the Thaad deployment a threat to its national security.

"What is really going on is a deeper political game. By poking the U.S. and South Korea, effectively North Korea is driving a wedge between China, the U.S. and South Korea," Stephan Haggard, director of the Korea-Pacific program at the University of California San Diego, said. "It's actually a quite clever diplomatic gambit that [Kim] is playing."

The U.S. and South Korea also kicked off joint military exercise on the Korean Peninsula on Monday, with 25,000 U.S. troops taking part South Korea's Ulchi Freedom Guardian exercise that runs until September 2, Reuters reported. GPS systems and military aircraft from both countries are being used in the exercises for the first time.

According to Reuters, the U.S.-led U.N. Command Military Armistice Commission said it had notified the North Korean army the exercises were "non-provocative." But North Korea, which views such exercises as preparations for invasion and often responds to them with missile tests, on Monday threatened a preemptive strike.

The U.S. Thaad missile is also controversial in South Korea where protests have been held against its deployment on Korean soil. Among concerns are safety fears about the system's powerful radar.
Kim Jong Hyun | Anadolu Agency | Getty Images

The Thaad deployment and joint exercises come as the U.S. and South Korea become increasingly impatient with China's attempts to keep its ally North Korea in check, Haggard told CNBC's "Squawk Box".

"From the U.S. and South Korean perspective, the Chinese response to the tests was a little on the tepid side and so now the concern is, with the increase in missile tests, that North Korea will continue to develop capabilities on the missile front that will ultimately be linked to the nuclear program that will destabilize the peninsula and the whole region," he added.

China signed off on a list of United Nations sanctions against North Korea earlier this year in response to its fourth nuclear weapons test, but has been dragging its feet on their implementation, Haggard said.

The outlook for an improved geopolitical landscape in the Korean Peninsula was murky, he cautioned.

"One of things that everyone now is worried about is that the North Koreans don't really appear to have any interest in giving up their nuclear weapons program. So unless the Chinese can bring adequate pressure on the country to bring them back to negotiations, we are really going to be entering a period of containment, where the prospects for negotiations are drifting away," Haggard said.

North and South Korea are technically still at war because their 1950-53 conflict ended in an armistice, not a peace treaty.

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