North Korea is facing an economic crisis because of strengthening United Nations sanctions following its tests of nuclear bombs and ICBMs. To escape this crisis, North Korea has launched a new peace offensive, similar to that which followed the collapse of the Soviet bloc in 1989. At that time, the South Korean government was fooled by Pyongyang’s diplomacy, and failed to induce the North toward reform and opening. Moon Jae-in seems to be sympathetic to the Kim Jung-un regime; as a result, the new peace-offensive may save the regime, with help from Chinese President Xi Jinping and electoral gimmicks by US President Donald Trump. Kim Jung-un faces a critical dilemma, nonetheless. He will not follow the precedents in China and Vietnam and adopt reform and opening policies because it will threaten his power. The new peace offensive may extend the survival of the Kim regime, but it will not solve the essential problems of the command economy, which imposes economic and social hardship. Paradoxically, Moon’s sympathy for the Northern peace offensive will only prolong the road to the peaceful unification of the Korean Peninsula.