back here tomorrow night with a live studio audience. now, anderson cooper. . we want to welcome our viewers in the united states an around the world. i'm wolf blitzer. this is a cnn "the situation room" special report. the north korean crisis happening now. defensive missiles are up and arm. waiting for north korea's dangerous move that could happen at any time. how can kim jong-un test his missiles and the patience of the world. we're following the money. americans on vacation in a crisis zone. their pleasure tour of north korea.

u.s. officials fear this could -- could be the week that north korea goes ahead with a provocative missile launch or something everyone worse. kim jong-un's regime warns the region is coming in the words of hot bed of war. north korea is suspending operations and a huge industrial complex near the border jointly owned with south korea. our correspondents are covering this unfolding crisis and u.s. response with tons of thousands of americans potentially at risk. let's bring in our pentagon correspondent right now, barbara starr. what's the very latest, barbara? >> well, wolf, at this hour, we can tell you that the u.s. intelligence community, the united states military throwing everything they have, satellites, eves dropping systems, reconnaissance, everything they can at the north

korea. trying to figure out what the regime is up to. keeping a close eye on that nuclear program. all eyes are focused on this missile -- with a range of 2500 and the question of if and when north korea might test-fire musudans from mobile launchers in eastern north korea. our position has and remained that thort korea should cease. >> reporter: look at this commercial satellite photo from early february. compared to this one, from late march. the north korea bloc 38 north say that you can see new construction a possible effort by north korea to restart its plutonium reactors. >> reactives that part of their program and gives them now, two

routes to producing material for nuclear bombs. >> reporter: another worry, could north korea be planning a new nuclear test. south korean and u.s. officials say there's some activity again at the site that tested the defense in february. >> any future nuclear test or missile launch would be direct violation of u.n. security regulations. >> reporter: it says that it can't protect diplomats in the capital after that date. >> the kind of action that the country would take before it initiated some highly's can la toir or provocative behavior. u.s. officials believe that north korea could be ready to test-fire those ballistics

missiles on east coast at any moment. >> barbara starr at the pentagon for the very latest. let's go to the south korea. in case this crisis does escalate into some sort of war. what are you seeing, what's going on? >> well, wolf, many of the preparations that we're seeing are happening very quietly, trying to keep people calm, all of it with an eye to tomorrow, it's wednesday in south korea, tomorrow, the day the south korean government has the highest possibility for a possible missile launch from north korea. neighbors of the u.s. osan air base are used to military drills. when the battery goes up and armed pointed north to the sky they know that this is not another ordinary maneuver i feel much more secure with the u.s.

army right next to us, says this business owner. even north korea has threatened to attack u.s. bases. the missiles a sign that the region is ready to counter a possible attack, not just in the military towns, across south korea's cities, amid the rush of daily life, visible signs of preparation for a potential disaster. this is all underground parking. 24 underground locations. that's just in one district says this man with the civil defense unit. this is the city's latest disaster plan. this sign says shelter in korean, as part of this city's emergency disaster plan, if something happens, people are supposed to try to get into this and other parking structures in the city and you can see for yourself, this is several stories deep. it is solid concrete.

this is essentially an urban underground bunker. most commuters ignore the new flyers and threats. north korea is just 15 miles away from here, but this woman, born during the korean war, sees it differently. we already lived through difficult times and now we have a better life, she says, i'm worried about everything that's happening now. a nation quietly preparing for a just in case for the unimaginable. and this is a population that is used to routine, civil defense drills. they happen almost monthly here. this time it's a little bit different. >> it seems pretty different this time around. this week could be critical. kyung lah in seoul. anyone's case when north korea

will act, but there's real anxiety about what might happened as early as wednesday. as we reported north korea has mentioned that date twice the in its most recent warnings and provocations. and represent peter king is joining us right now. thank you very much for coming in. >> thank you, wolf. >> as you know, the north koreans have told all foreign diplomats in the north korean capital, that they should leave by this coming wednesday. they couldn't guarantee their security after that. what's the significance after this? >> it adds more uncertainty and it shows more hostility on the part of the north korean regime. and it's a whole series of decisions and actions and statements over the last several weeks or months, which is why everyone is -- in our government is concerned about that. not panicking, certainly

concerned. treating it more seriously than the incidents the last several years, which occurred around this time but had a way of winding down. in this case, it appears that kim jong-un may be going out and not be able to get back in. >> are we bracing for something are dramatic wednesday, thursday or friday? this week, a critically important week? >> well, you know, it certainly could be. the fact that the plan that the knot korean and south koreans -- missiles have been moved and are facing east. the threats continue. yes, we have to again i want to be spreading panic here. certainly we have to be concerned. as each day goes by, watching it more and more carefully. leading up to april 15th which is the birthday of to former

leader. all of this has been monitored and we have to reassure or allies that we're standing with them. we have to send a message to the chinese, they have a real role to play. more and many of a prem nance u.s. presence as result of what north korea is doing. if war breaks out, the last thing they would want is a war in the korean peninsula. result in a south korean victory and a united korean which i don't think china wants at this stage. >> this new young leader of north korea is seeking bluffing, you think he's bluffing? >> he could be. we don't know. we have to assume that he's not. we have to operate on the assumption that he's for real.

that -- or the fact that he could be blufg, can't get himself back in. he would have built up the wardrobes among his people. he has to take some action and that action could be a modified attack on south korea, but the new south korean president, president park said that she'll respond to any attack. not like the previous years. there were south korean attacks. president park has made it clear that she would not. that could cause events to spiral out of control. >> if north koreans do launch some sort of missile or attack as they did in 2010, they torpedoed a south korean war ship, they she would an island, a south korean island, killing some civilians there. the south koreans at that time and the u.s. did not retaliate. you're saying this time there could be significant

retaliation? >> my understanding of president park's position is that she's made it clear that she'll respond, she'll retaliate and it's a question of how strong the retaliation will be. and what does north korea do at that stage? i can't blame south korea for responding. president park believes that he has to respond. an element that wasn't present in the past. >> you're a republican, you criticized the obama administration on several fronts, are they doing in this crisis? >> i think this crisis has e begun, i give them full credit, both the president and the ambassador rice and secretary hagel have all done the right thing. as far as sending the missile defense systems, making it clear we're going to stand with south korea, in effect saying an attack on south korea would be an attack on the united states.

that's the clearest way to avoid a war. i believe with north korea. to let them how serious we are. also, again, i can't speak to it, but i would believe there are overtures being made to china behind the scenes, certainly to me that's a key element here. china can tone north korea down. i have been critical of the administration on benghazi and iraq and afghanistan. as far as north korea is concerned, i'm giving them full credit. i have no criticism. put it this way, nothing but support for what they're doing. >> peter king of new york, thank you very much for coming in. still ahead -- tens of thousands of u.s. troops are in the region right now. the obama administration says though, it doesn't know how many americans may be in north korea right now. the shady ways that kim jong-un

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there's been a huge debate about the obama administration's handling of this escalating crisis. and joining us now our chief international correspondent christiane amanpour and, christopher hill. ambassador hill, she believes in what we in assertive u.s. diplomacy right now to ease this crisis, what realistically can be done, you used to be a top

u.s. diplomat dealing with the north koreans. they have lied to you in the past. >> first of all, this is an annual hissy fit they do after our annual exercises. but i'm not sure now would be a particularly good time for the u.s. to be approaching the north koreans. i think the diplomacy ought to be with our two allies, japan and especially south korea, but also with china, as you know, secretary kerry will be going to china and i think that's the key area to figure out what the way forward is diplomatically, we have an extremely competent ambassador. if there's a means by which to work with the chinese to help try to diffuse this and get this on the right track for the

future, we need to get ambassador davies working with his counterpart as well. >> christiane, the new leader kim jong-un make it clear they want a phone call from the president obama, these are insecure people over there, what would be wrong for the u.s. to avert disaster to reaching out them and talking to them? >> can beclear about what i said on their program before, never i have intimated any question of imappeasement in the face of real threats and provocations right now. what i'm talking about is, the broader way of how do you deal with north korea. i was in north korea after chris hill very successfully negotiated several game-changing agreements. but beyond that, the whole of closing down and disables of the

pyongyang reactor, one can see the diplomacy working. what's happening is, the united states is hopping that china will be able to play that critical role and that china is going to, they hope, to be able to have the kind of leverage that hasn't been exerted on north korea. they obviously said publicly they regret this provocations. the chinese public opinion is shifting on the cost of supporting north korea. as many diplomats i'm sure that ambassador hill would say the same. in other words, the kind of leverage that might a difference on north korea. i think what clearly, you know, the u.s. is doing what it has to do right now. but the real question is, how do you deal with this in the bigger way for the future, so as chris said, not every year around the time of joint exercises we have a hissy fit, while no one thinks

that the north kree yans are going to launch a nuclear weapon on any kind of missile, that might do something that could -- launch a missile, whether it's in anger or as a test that could then depending on how it's handled you know pave the way for some kind of miscalculation and a general and bigger war break out. nobody wants to see that. >> i'm anxious for your thoughts, ambassador hill, the south korean, the new south korean government have made it clear that if there's any attack on installation on south degree ya, unlike in the past, they would retaliate, that could escalate, that could result in a pretty dangerous situation. >> that's right. there are estimated 14,000 artillery tubes just north of

dmz. you're quite right. but what president park is saying is the same thing her predecessor said immediately after the incidents in which the north kree yans sunk a south korean naval vessel and she would an offshore island. she's reiterated that thought. so, the question, again, is, in the next couple of weeks, are the north kree yans slow this down or are they going to go right up to the line here with, you know, a lot of nerves being frayed, they're sick of this approach by the north koreans and so, i think there's a real danger of serious retaliation and the key question being, what would the north koreans do in

retaliation of the retaliation. >> april 15th the anniversary of the birth of the founder, the leader of north korea, a lot of people are anticipating something dramatic could happen between now and then for this new young leader the grandson in effect to prove his credentials are you fearful for that. >> both the united states and south korea have made it plain, they would not be surprised if some kind of military activity takes place, and obviously, there's that date, april 15th, the north koreans have talked about anything might be possible after april 10th and as ambassador hill was saying anything can be possible during these joint military exercises. one of the things that i was saying, i was talking to president obama's nuclear gauche or the and said look, over the years, we have developed a kind of relationship with kim jong

il. there was provocation and retreat. when he rached too far, he ratchet a little bit back. what's new now, they don't know what motivates kim jong-un. nobody knows, certainly not the united states, has had face to face meetings with kim jong-un. what is he trying to prove. what is his aim? did he know when to hold them and when to fold them? so to speak. >> christiane amanpour, thank you very much. and ambassador chris hill, thank you. in a minute i'll speak to the jon huntsman. upside down. >> hi. >> hi. you know, i can save you 15% today if you open up a charge card account with us. >> you just read my mind. >> announcer: just one little piece of information and they can open bogus accounts,

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happening now, north korea's strongman may have crossed the line with a crucial ally, we'll talk about the china factor with the former u.s. ambassador to china, jon huntsman. north korea brazenly threatens the united states. action versus bluster? and with a possible missile launch looming in the coming days, north korea finds some shady ways to bankroll its muscle flexing. i'm wolf blitzer. this is special report "north korean crisis." china taking a tougher line against north korea right now. over the weekend, chinese president pointedly complained that no country should be

allowed to throw the region into conflict. david, does china have the leverage that everyone seems to be talking about when it comes to north korea? >> well, wolf, they have the leverage, but in many i ways, they don't want to use it, that leverage includes cutting off fuel to north korea, cutting off food supplies and even military ties. but china doesn't want to see a collapse of this regime. china's frustrated. had enough of kim jong-un and his leadership. pushing the rhetoric to the breaking point. one thing that's also a factor, this young leader doesn't have the relationship with china's leaders, in the past kim jong il, previous dictators in north korea were able to sit down man

to man with china. now it's an unknown quantity. >> how much coverage, david s this crisis with north korea getting in china, how are they playing it? >> well, it's getting a lot of coverage here. certainly a little built in china, it's a large border with north korea. north korea has always been the close ally, but unruly cousin of china since the korean war. it's getting a lot of front-page and middle of the page coverage. no open criticism of the military buildup by the united states. it's clearly tas it approval that the united states is getting into the region in a bigger way. and also possibly pointing the

finger at north korea. >> wolf? >> david, joining us from beijing. thank you very much. the former u.s. ambassador to china is jon huntsman, joining us now. thanks very much, mr. ambassador, for coming in. china. subject you know well. you speak the language. you spent years there. are they going to use their to tone it do-- influence to tone this down. >> of course. this is music we have heard before. the question becomes, will north korea listen? >> china has a lot of influence on north korea. >> they have influence. but they have been lied to and cheated to, by north korea. they know that and they're

feeling the sting of it. after the sinking of the ship years ago and the south korean ship they delivered some hard-hitting messages to the north. they brought the level of hostility down. through their shuttled diplomacy behind the scenes. they have less and less clout. one reason why, business is done by people. they have less than personal repore with north korean leadership. >> without the support and food and other assistance that china gives north korea, that country is a total basket case right now. but it even collapses further. we're in the cycle of north korea rattling the region, they do this periodically, a, because you got a political leader internally who's trying to turn

up his credentials and second, they're rewarded for this kind of behavior, by the south and china. they know how far to take out the extreme measures and sadly, every time this happens, they get rewarded in some way, shape and form. so it's beneficial. >> the concern that chinese have a reunion mied one korea. they don't like that notion, the chinese, do they? >> what frightens them, that i have a real economy to protect. in the old days, china didn't have an economy to protect. today, that i have the second largest economy in the world. and they have a thriving manufacturing zone. every time there's a disruption politically on the peninsula, investments are halted. the trade patterns, this is 50% of our trade flows. 50% flow through the china sea.

for u.s., the stakes are very high. >> if there's a collapse of the north korean regime and millions of refugees flowing into china that's the nightmare scenario. >> it puts a damper on their economic performance. that's the economic piece. china is concerned about the economics because the party has legitimacy only as lock as the economy performs. the second part of it is, nuclear proliferation, the thought of japan, even beginning a did cushion -- >> or south korea. >> is a nightmare scenario for the chinese. >> here's some polls, new cnn, that just came out today, we asked the american pub lig, do you think north korea is an immediate threat to the united states. right now of the american

public, 41% say yes. if north korea attacks south korea, should u.s. send troops, 61% said yes. 36% said no. you read american public opinion, if this crisis were to escalate, what do you think the obama administration would do, how committed, in other words, is the u.s. to the protection of south korea? >> we have allies, when you have allies, you have principles on the line. if we're not willing to protect our relationship with south korea, by extension by japan, then i don't know what good our foreign policy is. we have no legitimacy otherwise. >> ambassador, thank you for coming in. coming up here -- a history of threats, is kim jong un more likely to follow. how is he paying for his

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the north koreans have a long history of speaking loudly then backing down. cnn's tom foreman has been taking a look at that history. >> wolf, as your guests have been saying throughout this entire program, this pattern goes back a long time. 1993, first time testing their

long-range missile. it excited the world community with concern because they didn't think that this was where they stood. by 1995, they were testing more missiles. this missiles included cruise missiles capable of going out 100 miles at sea. they were backing away from the world's nuclear agencies that keep track of nuclear programs that also excited concern. by 2003, by this point, more developments. we found out that, in fact, they had a nuclear program which they denied for a period of time and on and on it progressed, wolf. as your guests have pointed out throughout that process, there was a constant push/pull. fear and alarm around the world. often what followed were deals. wolf? >> in the past few years, it seemed to have entered a whole new phase, hasn't it? >> as these negotiations and

results keep moving up to a more dangerous level. by 2009, we're talking about these border tensions where they she would those islands off the coast of south korea. lot more has gone on. we're talking about programs that are much more advanced, we're talking about missiles that are capable of flying in stages, into space, lot more talk about their nuclear weapons program, it's as if the negotiations in this great big game of poker have gone higher and higher, wolf, your guests are right, even though we have had 20 years of this bluff and reward process, the wild card is this new, young leader, whether he's being guided through this process the same way. it's not a great process. not good if you have someone at the table who's intebt on carrying out one of these. >> very unpredictable situation. thank you very much, tom foreman zblfshlts coming up here on our special report, u.s. businesses

in south korea right now, lot of them, they're deeply concerned about their employees' safety. we'll show you how kim jong-un's threat could lead to a full-fledged war. that's coming up. hmmm. uh... yeah, can you find a take where it's a bit more dramatic on that last line, yeah? yeah i got it right here. someone help me!!! i have a flat tire!!! well it's good... good for me. what do you think? geico. fifteen minutes could save you fifteen percent or more on car insurance.

dozens of u.s. firms including companies with brands that you'll recognize do business in south korea. as our brian todd discovers, u.s. businesses stand to lose billions of dollars if things get worse. >> reporter: north korea's tied of threats has at least one american company thinking, what's next? the head of general motors is responsible for 17,000 workers at five plants in south korea, asked by cnbc recently if gm might move production or make other contingencies if things get worse -- >> you have to think about where you have the continuity of

supply and safety of your assets and your employees. so, it's a concern to everybody. >> reporter: contacted by cnn, a spokesman for gm declined to say what contingencies are making. she told us what american companies did then. >> companies wanted to make sure they had latest e-mails of all of their employees, latest addresses of where everyone lived and then starting looking at supply chain. >> reporter: some americans were evacuated to japan then. most analysts don't think they will happen now. but gm and other american companies have a lot to lose if tension escalates or conflict breaks out between north korea and south korea.

according to the u.s./south korea business council at least 50 american companies either have a presence in south korea or business interests there, there was about $100 billion in two-way trade between the u.s. and south korea last year. at any given time, there are about 120,000 americans living or traveling to south korea. all people who like the south koreans themselves are used to threats being made from north korea. >> the main concern of americans doing business in south korea is the south korean government and their regulations. or their competitors. not things that north koreans are doing. >> but he also said that it wasn't helpful for gm chairman to state publicly that his company is looking into con t contingency plans. a spokes. person at gm, good companies

plan for a variety of contingencies and to suggest anything more is an overreach wolf? >> lot at stake. up next, the shady money that's bankrolling kim jong-un's military threat and get this, there are american tourists on vacation in north korea.

when i was in north korea some two years ago, i saw firsthand how poor the country is. but he has money to threaten the world. where is the money coming from. >> reporter: when it comes to selling technology, the launch pad is kim jong-un's show room. in the missile test doubles as a marketing tool. >> telling other countries look at what you can have also for a price. >> reporter: former u.s. intelligence officials say that sanctions have cut into sales. kim is profiting off of illegal weapons but brings in $120

million less than his father. how important is money to kim jong-un? >> money is key. he has to keep the elites happy. >> reporter: north korea has its own version of the 1%. they need that money stream to keep them on his side. fortunately for kim, north korea has legal goods and a willing trade partner right next door. who is kim's link to china? >> it has to be part of the family. >> reporter: he oversees some of the state-run trading companies which mine reserves like coal and iron othre. the profits come back to kim. >> he can cut the deal with china. he has a lot of credibility with the chinese. >> reporter: trade with china is booming, from $1 billion a few years ago to $5 billion now. >> we have counted for the

weapons and the minerals. how else is he getting money? >> through ill lis it trast transactions. >> reporter: exporting illegal drugs, even counterfeiting old ben franklin. the north gets more from tourism and foreign investment. but wolf, he says in a country that doesn't get any taxes from its citizens and really is not connected to the international world trading market, it's the minerals and the weapons that are the cash cows keeping kim in power. >> chris lawrence, good report. thanks very much. u.s. officials warn one miscalculation could lead to disaster. cnn's tom foreman, will break it down in our visual studio right

now. >> reporter: wolf, all eyes remain on the east coast of north korea and these, these musadan missiles. if one of these takes off everything changes quickly. if there's a launch, you said that the very first thing would be some action by a satellite, why? >> tom, this satellite is going to pick up the infrared, the ir signature of the missile coming off the global launcher. it would send messages to the tracking system so that we can track the tell me try of that missile. >> trying to hone in on this thing, right? >> exactly correct. from the ground. from the sea. from the air. totally integrated. tracking the missile. the key objective is to make sure it's not threatening a u.s. ally in the region. >> a missile like this would be traveling at 1,000 miles.

>> this technology has been in place for a while. it's been highly refined. it's totally automated. >> if we see this moving toward a target, something that we care about, something that we want to protect, if the computers see that happening they'll automatically do what, they'll take that missile out. >> how do they take it out? >> launched from one of the plat forms either at sea or -- >> countermissiles. >> you got it. then comes the hard part the human equation. humans have to say, how do we respond that they tried to hit an asset. >> this is a political, strategic decision. those acting most can closely to all of this is the united nations command. we might go after the exact launch location where that missile came from, the objective is to maintain the armistice.

that's our objective. >> some very tense moments along the way to maintaining that objective. wolf. >> guys, thank you very much. north korea, the last place you would want to go on vacation right now. but get this, some american tourists were just there. we'll speak with them.

north korea's propaganda target is pretty clear. on state tv, a nation on war footing. ready to smash the united states. so, north korea is probably not where you would plan your next trip. but this group of americans did just that >> it's not a place to go on vacation and my mom was very supportive, my girlfriend broke up with me over it. >> i caught up with patrick and josh thomas, two american tourists who just braved a trip to pyongyang. >> my parents didn't know. they still don't know. they'll find out tomorrow. >> reporter: instead of mass rallies the reality that witnessed rollerblading. apparently it's the latest fad. zblt of kids out there rollerblading. that's super popular right now. >> reporter: but for these americans it was tasting

traditional teas, posing with extras in a war film. attending a north korean wedding. >> north korea one of the forbidden countries. >> reporter: he guided the group. when it opened for american tourists in 2010, he rushed in, posting his photos and experiences on a popular blog. >> the tension that's been talked about around the world isn't felt when you're there. >> reporter: so while thousands of south korean and u.s. troops guard the dmz, senior north korean officials gave a tour of the front line to the american guests. treating them like vip. they know they only got to see what the government has let them. but they said it was worth it. and came back with an opinion that will surprise some. >> i truly