North Korea's Kim not seen heading for retirement yet

SEOUL (Reuters) - North Korea's ruling party holds its biggest meeting in 30 years early next month to pick a new leadership and likely anoint an heir to the dynasty as Kim Jong-il's health deteriorates.

Kim, suspected of suffering a stroke in 2008, is believed to have accelerated succession plans, but analysts say the meeting of the Workers' Party won't send its supreme leader into retirement just yet.

The decision by the powerful Political Bureau of the party Central Committee in June to call September's meeting indicated it will be a watershed, and that it will involve a major reshuffle of its officials for the first time in decades.

The big question is whether Kim's youngest son, Jong-un, will be given an official title and how it will rank in seniority. Additionally, North Korea watchers will be monitoring to see what positions his backers get.

"I think what will happen is Kim Jong-il and Kim Jong-un will begin a joint leadership system in 2012, and until then, the son will hold a key position but one that is not as public," said Yang Moo-jin of the University of North Korean Studies.

Experts say North Korea, hit by sanctions punishing it for its nuclear weapons programme, could adopt a collective leadership when Kim dies with his son identified as figurehead leader but real power held by a group of officials from the ruling Workers' Party and the military.

The meeting takes place at a time of great hardship for the impoverished North as it tries to work around the sanctions and accomplish something to show for its pledge to become a "powerful and prosperous" nation by 2012.

By all accounts, the North's coffers are hopelessly low in cash and heavy rains this year have hit food production that even in a good year falls a million tonnes short of the amount needed to feed its 23 million people.

The meeting in early September comes amid a flurry of diplomatic activity in the region, home to the world's second- and third-largest economies and a massive arms build-up straddling the Korean peninsula military border.

Kim this week was on his second visit to China in a few months, a trip observers say was probably designed to let Beijing know of the North's planned father-to-son power transition process.

At around the same time, North Korea expressed a willingness to return to nuclear disarmament talks, which have been in limbo since 2008 when North Korea walked out and said they were finished. China has hosted the on-again-off-again talks since they began in 2003.

THIRD GENERATION

Speculation over who will succeed as the third generation of leader to the world's first communist dynasty has grown with Kim's noticeable decline in health.

South Korea, China, the United States and Japan will all be watching for clues as to how the transfer of power proceeds in the country with a military-first policy and enough fissile material for at least six to eight nuclear weapons.

With North and South still technically at war, having only signed an armistice in 1953, regional powers are anxious to know what changes are afoot and who will command the country's nearly 1.2 million troops and another 7.7 million in the reserves.

Founded on October 10, 1945, the Workers' Party of Korea has been the pinnacle of power in the North, the source of the go-it-alone Juche ideology, a mix of Marxism and ultra-nationalism preached by Kim's father and state founder, Kim Il-sung.

Kim Jong-il rules as the party's general secretary on top of his role as chairman of the National Defense Commission. His grooming as a future leader began at the party level three decades ago when he was given a formal role at a convention.

There has been barely a handful of sessions of the solemn national convention since the party's founding. But each was a milestone in the evolution of the state from a revolutionary movement fighting Japan's colonial rule to a reclusive regime that has stoked regional tensions with armed provocations and pursuit of weapons of mass destruction.

(Additional reporting by Chris Buckley in Beijing; Editing by Jeremy Laurence and Nick Macfie)