because of breaking news, ran out of time for the ridiculist. apologies about that. that does it for us. "the situation room" begins now. we want to welcome our viewers in the united states and around the world. i'm wolf blitzer, this is "the situation room" special report. the north korean crisis, happening now. kim jong-un keeps the world on edge literally atfully moment. he won't stop with just one provocation. plus, cnn's rare visit to the dividing line between north and south korea, the most

militarized border on the planet, where the threat of war is very real. and the crimes to help pay for north korea's military might is like something out of the movie, the godfather. you. we begin this hour with a tough new warning from north korea today. chuck hagel says kim jong-un is skating close to a dangerous line. the communist leader could order a missile test launch at any moment. we're being told the north koreans are military masters of deception who may have something else up their sleeves as well. our pentagon correspondent barbara starr is joining us now with the latest. barbara? >> well, wolf, military masters of deception in deed. and new indications that the north koreans may have some other plans up their sleeve. defense secretary chuck hagel's message to kim jong-u.n. and his

north korean regime? enough is enough. >> with its rhetoric, with its actions, have been skating very close to a dangerous line. >> in the hours before an expected north korean missile test. hagel made clear the u.s. military is ready to respond. >> our country is fully prepared to deal with any contingency, any action that north korea may take or any provocation. >> the joint chiefs chairman offering a grim assessment of how close north korea is to putting a nuclear warhead on a missile. a direct threat to the u.s. >> in the absence of concrete evidence to the contrary, we have to assume the worst case. >> u.s. intelligence indicates the regime in the last few days, may have moved several short range missile launchers around the country. that's on top of the two

interest mediate range mobile missiles it parked along the east coast. the u.s. worries multiple missile launches are the first of more provocative actions by the north. no one has forgotten the 2010 shelling of a south korean island by north korea. >> we may see a succession of things to try to make this point that they are a strong and prosperous nation. >> kim jong-un may feel compelled to act. >> they have pushed the rhetoric up so high now, to do nothing, they would look like a paper tiger. >> kim jong-un's regime is so unpredictable that the u.s. simply has no choice but to prepare for whatever may come. and tonight the u.s. navy has two ships in key positions able to shoot down the missile if it

comes their way. one is east of japan, the other further in the pacific near guam. wolf? >> and u.s. and south korean troops clearly now in a higher state of alert. barbara, thanks for that report. let's go to cnn's rare visit to the korean border, the dmz, the historic buffer between the north and south. it was created at the end of the korean war some 60 years ago, and it could be a front line if a new war erupted. kyung lah went there today. she's now back in seoul, and she has more on what's going on. what else is going on, kyung. >> well, what we can tell you is that when you go to the border, you get a sense of how it feels between the two countries. the korean war ended at armisti armistice. it never really ended.

and that's a thin line between the border of these two countries. there's near absolute silence in the most militarized border on the planet. south korean soldiers on the edge of a fight, staring down a sworn enemy, that unblinkingly stares right back, sometimes through binoculars peaking out through windows. >> this area we're walking into, this side is south korea, over there is north korea. >> all cameras facing this way. >> rules are tight on this military guided press tour. don't linger, don't point. this is cold war up close. >> we talk about tensions on the peninsu peninsula, this is about as tense as it gets. south korean soldiers their backs to us, with north korean soldiers right on the other side just feet away. this room we're about to enter is actually divided in half. shut down just so we can come in

and capture some pictures. >> you can maneuver around, just stay within arm's length of the soldiers. >> the soldiers are here so we don't get grabbed and pulled into north korea. we're only given a few minutes in here. >> 20 seconds. >> this is technically south korea on this side. to get over to north korea, just on the other side of these microphones. the next stop is a lookout. >> the tower is north korea, can you see the north korean flag flying right there. and that village right underneath, that is what north korea calls a peace village. but south korea refers to it as propaganda village. >> because the u.s. doesn't believe anyone actually lives here. this is all four show. one of the world's most lethal borders is up close, just a fence, barbed wire and a trench. the dmz uninhabitable. so untouched that endangered

wildlife and plant species soar here. tourists are allowed to visit this lookout. the final stop of our press tour, where we meet american brothers. >> it's a little surreal knowing that just a few hundred yards that way there are people starving and being tortured and so forth. it's unreal. >> i had a lot of family and friends who asked me if i was afraid to come over here? . a peak into a reclusive nation, while the world guesses what move it will make next. as tense as it is right up at the border, people who are there frequently at the dmz say they haven't noticed any discernible change, especially on the north. they haven't noticed there's anything they're doing differently. but remember, wolf, this is where we see the theater of war to avoid real war. wolf? >> you're back in seoul now, that's only 20 or 30 miles from

the demilitarized zone. a city of many, many millions of people, i assume everyone recognizes they're within easy artillery range of the thousands of artillery pieces of north korean pieces have just north of the demilitarized zone? >> oh, yes. everyone knows that they can get in their car and in an hour, drive up to the dmz. they grew up with this. the idea of being frightened because north korea is going to launch a missile is something you simply cannot live with daily if you want to try to live here in seoul. there are 11 million people here who are doing their best to live life normally. if you walk around on the streets here, you talk to people, they are going to tell you, they are numb, they are tired of north korea, they have seen these missile launches before, they are hoping that everyone is right, that this is going to be a test and they're just going to continue with their daily lives. >> kyung lah in seoul, south

korea, excellent report, thanks very much. we're joined now by a man who knows north korea as well as anyone. he was just in north korea in early january. thanks for coming in. u.s. intelligence now telling cnn north korea may be planning what they call multiple missile launches in the coming maybe hours or next few days? what is your assessment? >> well, this is very troublesome. there's a lot of bluster, a lot of bluffing, but when there's movement of those missiles that can be detected then that means they're up to something. so i don't have any concrete information that they're going to take those tests. but if they do, it basically means this, one, the north korean military, the hardliners

have basically won out in terms of a potential power struggle there. over the foreign ministry, the civilian types that are in that government. number two, i think it's also reached the stage where kim jong-un has already used this bluster and strength internally for his domestic purposes. you can only do so much. i think he's getting the support that he needs internally, so then the question is, why are they continuing this escalation? there months sign that at the end of the tunnel they're ready to negotiate with the united states or south korea or japan or china on more food or fuel. so i think this is really perplexing now. and it's because of the new leadership, perhaps a vacuum of leadership that is happening there. >> u.s. officials who are knowledgeable about what's going on, governor, have suggested two

dates that could be significant. april 11th, that's the anniversary of kim jong-un's arrival in power if you will, and april 15th, that's the 100th birthday of the founder of north korea. these dates are symbolically important. usually they like to do something on those dates. how worried should we be about these dates. >> we should be worried, because they always do something dramatic on those dates, on birthdays, on anniversary deaths. they have many around the diety, the father, the son, and kim-il song. in the end i think it's important for everybody to keep cool the biggest mistake is a

miscalculation, misjudgment on the sea. i think the u.s. military is playing it positively well basically saying, look there's going to be a response, a cost if there's an aggressive action. that's all we can do. there's an internal game, possibly a power struggle going on in north korea with the young leader not necessarily feeling his oates, but uncertain where to go. >> you were there -- and i was there with you for six days in december 2010 when kim jong-il was still in power. you were over there in january with the head of google. between those two visits, did you sense any real change in north korea?

>> well, i thought that the new leader, kim jong-un would be more diplomatically oriented, more willing to talk to the west. he's been educated in the west, that he'd be willing to enter into negotiations. but apparently what happened is, when that missile launch failed kim jong-un had to show his people that he was strong, had to show his military, that he was tough. so these aggressive actions followed. so i saw a positive move more toward negotiations, dialogue, less rhetoric. now the turbulence has happened, since kim jong-un seems to have affirmed his power. so, yes, i've been there a lot. you were there, many have been there, but it's just very vexing what is happening. and once again, north korea is

showing something very clear. they're unpredictable. you don't know what they're thinking, they don't think like we do. it's very difficult to gauge what they're going to do next. >> you're not going to go there any time soon, are you? >> no, no. i'm here in santa fe, private citizen, i'm very happy right here. >> good place to be. >> thanks for coming many. >> thank you, wolf. up next, we've all seen the video of north korea's military on parade. how well are they actually trained. the north korean troops, we're taking a closer look. in japan, patriot missiles are poised. one city has jumped the gun. claiming that north korea's missile has launched.

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to more efficient pick-ups. ♪ wireless is limitless. ♪ from tracking the bus. ♪ to tracking field conditions. ♪ wireless is limitless. column upon column of highly disciplined soldiers. this is north korea's massive fighting force and they're watching what's going on. they're trained specifically to wage war against south korean and american military forces on the korean peninsula. cnn's tom foreman and cnn contributor retired u.s. army general spider marks take a closer look. >> wolf, the cornerstone of everything we've been talking about for the past couple of weeks is the north korean army.

general, walk us through the force of this army. >> this is an army that has over about 1 million folks under arms, very large reserve component. mandatory service, from a couple of years up to ten years. >> a large force, particularly large if we think about the size of the area involved. look at this map of the united states. that's where north korea would fit, roughly in the same space as mississippi. so as militaries go, this is a very massive force for a small country. >> but a very paranoid leadership. >> let's talk about the breakdown of that. the if you talk about the leadership, what is the number one quality required of the top officers in this military? >> loyalty to the communist party and the leader right here, kim jong-un. >> the number one quality. what about the special forces? >> very large special forces, very well trained. the best of their military, over 100,000. they can insert by air or by sea. and we estimate that there are stay-behind forces, sleeper agents already located in south korea. >> there's everybody else, this is a massive number of people,

are they generally considered to be well trained, good soldiers? what are they? >> they are well trained compared to the rest of the population of north korea. they have good nutrition, they have good medical care. they get a lot of training throughout the year, primarily during the winter training cycle. as the spring and summer roll around, they get into the other duties. but they're pretty good. >> i would guess lack of supply, is one of their hampering forces. fuel sometimes, things they might limit on. >> the limiting factor is their ability to sustain themselves in combat. >> if we look at a normal soldier there, tell me a little bit about this person. what would he be like? >> now, this is where we get into the additional duties. first of all, it's relatively young. they're all drafted. these additional duties i referred to just a second ago is that these soldiers have to be able to sustain the countryside. north korea was founded on the principle of self-reliance. we have to be able to take care of our own medical, our own trade, our own development, our own infrastructure, our

agricultural needs. >> when you fit that in with the modern policy of military first, many of the duties of government fall to this guy. >> absolutely. >> that we might have in different departments, it's all military here? >> absolutely correct. >> so road building, many, many things. >> all of that. >> is that a big burden on an army if you're trying to maintain the army for fighting purposes? >> it certainly is. they're distracted as a matter of routine. they can train episodically, but then they have these huge duties. >> wolf? >> tom foreman, thanks to you and to general spider marks. let's go to japan right now. a stunning mistake that may have created even more anxiety. cnn's diana magnay is joining us from tokyo right now. diana, what happened? >> reporter: hi, wolf. well, the city of yokahoma accidentally sent out a tweet -- or the crisis agency did saying

that north korea had already launched its missile. that tweet stayed up for 20 minutes, sent out to the agency's 42,000 followers. until they realized it was a mistake. apparently it was human error. but obviously very embarrassing for that particular official who sent it out. very embarrassing for the city, too, at a time at least of partially heightened tensions in this country, wolf. >> we've seen the patriot air defense missile batteries in downtown tokyo, if you will, diana. how worried are people there when they see these kinds of missiles, these batteries right in the heart of their city? >> reporter: well, they've seen them before. they've heard this kind of rhetoric coming out of north korea before. it's a bit like what kyung lah was telling us earlier. they've been here before. the thing is, they're a bit worried about kim jong-un as opposed to his father who was more of a known entity. the message at least from the government is, this is all in hand, we're doing everything that we can to protect the citizens.

that said, when we were down at the patriot missiles in the central of tokyo, the minister of defense came in to talk to their unit there, and said, you know, the situation is acute. be prepared to act as soon as the order comes. if you think about it, the time that officials here will have to act is so limited, given how close tokyo is to pyongyang. i think that does, of course, add to a bit of tension amongst the people here. >> diana magnay in tokyo for us. we'll stay in close touch with you. and you'll be able to find out more about north korea's missile capabilities, including an interactive map showing how far each type of the missile could potentially travel. go to our website cnn.com. still ahead here in our "situation room" special report, the smuggling operation that helps pay for north korea's military, illegal weapons, drugs, and a lot more. and christiane amanpour and fareed zakaria, they are both here as they have been every single day. we're watching what's going on with them. s hard,

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happening now, a frightening scenario for u.s. troops. they've practiced and practiced for a nuclear emergency with north korea, and we've learned, guess what, it didn't go well. kim jong-un's criminal network, the smuggling operation that would make tony soprano proud. new fears about an axis of evil. is north korea helping iran develop nuclear weapons. i'm wolf blitzer. and this is a "situation room" special report, north korean crisis.

in north korea, right now, the window is wide open for a missile test literally at any moment. we're told u.s. intelligence suggests there may be multiple launches. the defense secretary of the united states, chuck hagel, is warning that kim jong-un is standing very close to a dangerous line and promises the united states will be ready. >> as we have said many times, our country is fully prepared to deal with any contingency, any action that north korea may take, or any provocation that they may instigate. and we have contingencies prepared to do that. >> let's bring in our chief international correspondent, christiane amanpour, the anchor of amanpour that airs on cnn international, also our own fareed zakaria, host of fareed zakaria gps which airs on cnn as well.

christiane, you and i know chuck hagel, fareed, you know chuck hagel. he is not a guy who speaks provocatively without specific warning, without specific reason. when i heard what he was saying, i sensed he's pretty concerned. >> he is concerned, but rather than ominous, it sounded kind of reassuring. he basically said we have what it takes to defend our homeland, our allies. and i think that yesterday the admiral in charge of the pacific command, admiral locklear, told congress that of course they would take defensive action if they saw any missile headed in a hostile manner toward allies or u.s. bases in gu all. but he would not suggest shooting down any missiles in inhabited areas, in other words, not targeted in anger. >> what happens, fareed, if they

do launch not just one or two, but multiple missiles, and they all go into the pacific ocean, they fly over japan, land if the water. then what? >> that's precisely why i think the american plan seems to be at least not precipitously to intercept them and shoot them down. because if these are sort of harmless missile tests that end up in the ocean, perhaps one way to stop the escalation is not to intercept them. if they do appear to be close to south korea, or to japan, i think that becomes a different matter. the key here, wolf, is probably not really what we are doing to protect ourselves. north korea is really not a threat to the united states. it has no capacity. the nuclear warheads it has are too heavy to sit on these missiles. the missiles are not particularly good. you remember a couple of years ago they tested one and it was a

spectacular public failure. the danger is, how will the south koreans and the japanese react. it's all right for us to look at this as a superpower 10,000 miles away. japan is close by, south korea is right there. if they start looking at this and saying, we can't keep relying on the united states for the security umbrella, for this nuclear umbrella, we have to do something, remember, these are very advanced countries. japan in a sense is a few months away from a nuclear bomb, just because they have such a sophisticated nuclear industry. south korea could get one very easily. what we're trying to do is reassure the japanese and south koreans that, look, we can take care of your security, don't worry, we have the capacity to do what it takes. without getting into all kind of mano-a-mano tit for tat with north korea. >> christiane, do you have a sense of how good u.s. intelligence on north korea may be? i'll tell you, i've heard that the united states has very good reconnaissance satellite photography, communications, electronics intercepts, but not

necessarily a good sense of what's going on with kim jong-un and his inner circle, human intelligence, if you will. i wonder what you've heard? >> well, precisely that. they obviously have quite a lot of intelligence on the technical matters. but not on the leadership. and not on kim jong-un. we've been hearing that and talking about that for the last several days since this crisis has ratcheted up. i've been speaking to quite a lot of experts, and mike chanoy, who used to be a cnn correspondent and visited there 15 times recently. he feels the game has changed in north korea. that they're no longer -- they've changed their calculation. they want to be taken seriously as a nuclear state. and so the united states has to come up with some kind of way to deal with this. as he points out and as we know, sanctions, and the, you know, the punishments that have been inflicted on north korea haven't actually worked when it comes to their programs.

i mean, they keep testing nuclear devices. and according to the experts, they do get marginally better at it, including their missiles. the united states is not going to go to war over north korea with all those consequences that it would have. so what's the answer? so after this crisis, which they believe will pass with the north koreans able to say, look, you know, we did this, we faced the u.s. down, we stopped the united states from, you know, invading us, and invading north korea, then what next to avoid this constant cycle of back-and-forth provocation and who knows what. obviously many people have a suggestion that the obama administration should stick to what it said, president obama in his inauguration speech said we should have the courage to engage, not to be naive, but to be able to engage to resolve things peacefully.

so some are suggesting name a high-level envoy, somebody needs to meet kim jong-un, and if the north korean system it is only the top top leadership which makes the decisions. kim jong-un, like his father and grandfather, makes the decisions. >> would it be smart, fareed, to send someone like former president bill clinton and former secretary of state madeleine albright to pyongyang? >> i think it would be a terrible idea. just look at what would happen? they've engaged in the spectacular display of aggression, violating their national treaties, vi lating their obligations, threatening their neighbors. and what do they get from it? they get a high-level american representative who comes to pyongyang. it is exactly the wrong message to send. of course, we should engage with these countries, but not right now. you don't do it as a reward for behavior that everybody, the chinese and russians, have argued is provocative. the chinese premier made a very important statement, perhaps the most important thing that's happened in the last few days, saying no single country should be able to threaten global and regional stability. a clear reference to north korea. to my knowledge, that is the

first time the president of china has ever implicitly criticized north korea. what we should do right now is make clear that what north korea has done, it will not get rewarded. far from it, it will have the international community come together in a consensus around it. at some point in the future, of course, it has always made sense for us to negotiate. we have tried, by the way. we did in the clinton administration, we signed an agreement with them. even the bush administration signed two agreements with them. they broke all of them. they cheated on all of them. this is a country that right now shut down a joint industrial park with south korea, which was giving them $90 million, which was employing 1 in 6 of the north koreans in that city. why? nobody really upses. nobody really understands. remember, this is a regime that has starved 2 million of its own people. it's easier to say we should negotiate with them. practically it hasn't achieved very much in the past.

>> fareed, christiane, we'll continue this tomorrow. thanks to both of you. up next, our special report continues with north korea a paradise for smugglers. we went out and asked people a simple question:

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when it comes to north korea, the united states says it's, quote, fully prepared to

deal with any contingency. but that's not exactly what our chief washington correspondent, jake tapper, found during a recent war game exercise. >> hey, wolf, it could be bombs away any minute now in north korea, with the latest intel indicating multiple missile launches may be planned. defense secretary chuck hagel said kim jong-un is coming close to a dangerous line. so are we prepared? that's not exactly what we found during a recent war game exercise. imagine this, the north korean regime is toppled, either because the u.s. or south korea take it out, or because of a coup. and the sufficient now has secure troops to secure the country's stockpiles to make sure they don't fall into the wrong hands. it's a frightening scenario played out at the u.s. army war college, one that did not end all that well. the military set the scene for their war game in the fictitious land of north brownland. >> it was a family regime,

nuclear weapons, lost control of nuclear weapons, the population was considered to be essentially brainwashed. >> reporter: a writer for defense news was present as the military officials debated the plans. u.s. troops, he says, had immediate problems, surging into the north korea-like country. ospreys zoom u.s. soldiers deep beyond the border but with reinforcements so far behind, they're quickly surrounded by the enemy and need to be pulled out. american troops eventually made it over the border but with nuclear sites located in populated areas, their mission grows more difficult. u.s. forces make humanitarian aid drops to draw people out of the cities. >> the name of the game is as difficult as possible. they haven't really spent a lot of time or money modernizing their nuclear and chemical troops. so that's a big concern. >> reporter: it takes the u.s. a staggering 56 days, and a huge force of 90,000 troops to secure the country's nuclear weapons.

seen by many as way too long, and way too many troops. >> we're not very well prepared to deal with a collapsed north korea. >> reporter: bruce bennett said his numbers run much higher. 200,000 troops. that's larger than the forces in iraq and afghanistan at its peak. >> we would have to send perhaps a third of our army to south korea in order to deal with the weapons of mass destruction. >> reporter: it's thought north korea has 100 sites linked to their nuclear and missile program. but with the shrouding of intelligence, troops would likely have to fight their way through the country to find and secure them. >> north korea has about 1.2 million people in the military. that's a very large military for us to deal with, but they also have, according to the south korean defense ministry, about 200,000 special forces. and those special forces would be prepared to fight you like taliban or the iraqi insurgents. >> one note, wolf, the army today was quick to remind us

that the fictional north brownland might not be expressly north korea, but could be any one of the 28 countries that have weapons of mass destruction capabilities. wolf? >> jake tapper reporting for us, thank you. north korea's buildup, it's built up one of the world's largest armies. so how can they actually afford it? a poor country where so many people are starving. in part, because the country is a smuggler's paradise. brian todd is here taking a closer look at this part of the story. you've been checking out the money. >> right, wolf. they're telling us smuggling accounts for 10% and 40% of north korea's revenue. add it all up and you have a sophisticated criminal network that funds the nuclear weapons program of an unstable government. december 2009, a cargo plane is intercepted at a refueling stop in thailand carrying 35 tons of

weapons, including rocket-propelled grenades. it came from north korea, reported destination, iran. a flight that violated u.n. sanctions. april 2003, a north korean vessel is intercepted carrying about 300 pounds of heroin to australia. part of a smuggling network that experts say raises hundreds of millions of dollars a year, helping to underwrite north korea's nuclear program. >> kim jong-un really sits atop a criminal network that would make tony soprano proud. >> reporter: a network smuggling missiles, missile parts and other weapons, counterfeit american dollars, fake viagra, and illegal drugs like methamphetamine. analysts tell us that the drugs go to u.s. and asia over land and water. missile parts are flown to iran, a spider web of shipments with ever more creative methods of transport. >> they also act as couriers.

kind of the fedex of the international drug trade. north korean diplomats have been busted in a number of different countries, using their diplomatic pouch to smuggle drugs. >> reporter: former top cia officer bruce clinger who spied on north korea for several years lays out another smuggling tactic. >> we know they've used freighter ships to get the drugs into japan. and then when that became difficult, they were even using the semi submersible agent insertion special operations boats. they would send shipments out here, and then drop them off to be picked up by the japanese organized crime gangs for pickup to then go into japan. >> reporter: it's not just trafficking. analysts say counterfeit dollars and methamphetamine carry the made in north korea label. this is the rust belt of north korea. the city of chonggin, in its depressed state has become a center of making illegal methamphetamines. they're made in chonggin, and shipped right across the border into china. >> reporter: creating meth addicts in china.

and anger from chinese officials. maybe the only true friends north korea has left. i called the north korean mission at the u.n. for response to our report. an official there said, quote, smuggling has nothing to do with us, what is that? and then he hung up on me. iranian official also at the u.n. did not respond to the reporting that their country is a major client for north korean missiles. wolf? >> brian will have more on that story coming up. thanks very, very much. a nuclear nightmare scenario. the why the u.s. believes right now, north korea and iran may be working together on weapons.

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it belongs to all nations. every nation has a right to use it. >> reporter: tuesday asked about the iran's announcement, secretary of state john kerry drew a parallel to the situation in north korea. >> clearly, any effort not unlike the dprk, where kim jong-un has decided to reopen his enrichment procedures. by rebuilding a facility that was part of an agreement to destroy. in the same way as that is provocative to open up yellow cake production, while there is no known link between the north korean and iranian nuclear programs, iran already relies heavily on north korea for the missile program. >> the entire missile program in iran is based on north korean missiles and technology which the north sold to iran. so in that sense, there's very deep cooperation. >> reporter: the big question, does north korea's help extend

to nuclear capability? on capitol hill tuesday, the navy's top commander in the pacific wouldn't elaborate. >> i think iran would be greatly advantaged if north korea helps them. >> is that help on going. >> i can't give you verification of that in this form? >> reporter: over the weekend, major powers wrapped up talks with iran, with no progress getting iran to prove whether its nuclear program is for power plants or weapons. so while u.s. diplomats keep an eye on both countries, the pentagon is flexing military muscle. the navy just announced plans to deploy a laser weapon. new quick reaction capability to potential targets in the persian gulf meaning iranian drones or drill boats. jill doherty, cnn, london. >> no one has more leverage in north korea than china. david mckenzie is in beijing with a closer look. >> reporter: firing nuclear

rhetoric. armies at the ready. missile defense systems in downtown tokyo. who can bring down the temperature? >> there is one power that can end this story very quickly, end this, first of all, human tragedy of north korea and this incredible farce of regime. and that country is called china. >> reporter: china could cut off the fuel taps and food aid to starve the regime. but years of nuclear tests and missile launches, china's trade with north korea has increased, not decreased. >> china does not want north korea to collapse. they made that very clear. they consider it a buffer zone. >> reporter: the status quo is what china wants says author and journalist. >> it will be taken over by south korea, a country highly influenced by the americans who in effect have the u.s. western imperialism at your doorstep. >> reporter: north korea has few friends but china has always

been one of them, putting up with their neighbor like a relative. china sent soldiers to fight in the korean war. welcome the north's power and embraced his son kim jong-il. china's leaders have long memories. >> on the chinese government side, there is a lot of problems attached to maintain what he can call the traditional friendship between china and dprk. >> he says north korea's young dictator may have gone too far this time. there hasn't been high level talks between the two countries since november. so the threat of a nuclear north korea may ultimately bring the u.s. and china together. david mckenzie, cnn, beijing. coming up, an unsung hero of the korean war. impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds

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barbara starr has the story of an unsung hero. >> rations and water are scarce. >> reporter: in the winter of 1950, the korean war was tough going for often overwhelmed u.s. troops. here on the right, an extraordinary soldier who never fired a shot. and now more than 60 years after his death, he is severing the medal of honor. the nation's highest award for valor in action. for father capon, an army chaplin, the sole weapon, faith. mike dow now 85 was a young lieutenant. you still to this day keep his

photo on the wall? >> yeah. that one picture is the one i like of him holding his pipe when it was shot out of his mouth. >> reporter: captured in november 1950, he met the priest as they carried the wounded on the long pow march's north. >> there was a fellow on the back of the stretcher that was in front of. i said, i'm mike dow, what's your name? >> he said capon. >> his nephew is accepting the medal in part for the men who were there. >> even though this medal of honor is for him, it is for these guys, too. he would tell anyone and everyone, theyen didn't want the story to die. >> reporter: stories of a priest rescuing the wounded. >> didn't matter there were mortar shells falling around him. >> reporter: mike dow survived being a pow because of father capon. >> he was able to ingender a spirit of loyalty and

meaningfulness to being a captive by resisting your captors and maintaining your faith with your country that enabled you to keep your will to live. >> reporter: the priest regularly stole food for the starving men. >> he'd come around and say hot coffee and give hot water to all of us there. and, man, that was -- may not sound like much today, but that sure meant a lot under those circumstances. >> reporter: the enemy, the north koreans and chinese, began to fear the now ailing catholic priest. >> the koreans came in and told him they were going to have to take him to the hospital. and the hospital, you ask all the guys, the hospital was a death house. >> reporter: but they couldn't save him. father capon's final moments with his flock of p.o.w.s as he