In my current piece for Asia Times Online (reproduced below) I argue that the PRC leadership has, for better or worse, reconciled itself to a nuclear North Korea, since the alternative—the Korean peninsula unified under a pro-US democracy—is unattractive both economically and strategically.
North Korean nukes: A useful stage device
By Peter Lee
In a time of leadership transition in both countries, the US is dangling "responsible stakeholder" bait in front of China on North Korea. However, there appears to be a muted but fierce debate inside the US foreign policy community on how to make the bait tempting enough for the People's Republic of China (PRC) leadership to bite.
The inconvenient and irritating character of the North Korean nuclear and missile program is apparently something that everyone, with the natural exception of the DPRK (Democratic People's Republic of Korea, North Korea) leadership, can agree on.
Therefore, the idea is frequently bandied about that the PRC should exercise its unequalled leverage over the DPRK and institute the embargo on food, fuel oil, international banking facilities, or overall trade that will bring the North Korean regime to its knees, if not to its senses.
Evan Osnos of the New Yorker singlehandedly transported this idea into the bizarro quadrant with his suggestion that the PRC deploy its cutting-edge hacking abilities to inflict a "Stuxnet"-style attack on North Korea's nuclear facilities.
This apparently was not a passing fancy on the part of Osnos. He diligently canvassed various pundits on this clever scheme, only to be met with the politest of rebuffs.
Beyond the lack of a law of war/imminent threat justification for a pre-emptive cyberattack - something which does not exercise the American commentariat overmuch in this post-Stuxnet day and age - the flaw in this, and any other "PRC cuts the DPRK off at the knees" strategy can be revealed by a brief consideration of the consequences of a financial or material embargo under two likely scenarios:
DPRK resists but quickly collapses. South Korea takes over most or all of the peninsula, seizes the economic opportunities now monopolized by the PRC, supplants Japan as the region's pro-Western economic and military powerhouse and frontline democracy on China's doorstep.
DPRK survives but harbors a natural and undying enmity against the PRC. It reaches out to the US and ROK. Through collapse or unification, South Korea takes over most or all of the peninsula, seizes the economic opportunities now monopolized by the PRC, supplants Japan as the region's pro-Western economic and military powerhouse and frontline democracy on China's doorstep.
The PRC had a chance to consider these extremely attractive options in 2010, when the DPRK allegedly sank the Cheonan, and China was invited to join the United States and the ROK (Republic of Korea, South Korea) in a concerted beat-down of North Korea through a UN sanctions process.
Then president Hu Jintao decided he preferred an alternate future in which North Korea remained a profitable quasi-province, useful buffer, and sphere of influence, and was excoriated by President Obama for "willful blindness" for his inability to see things the right i.e. US way.
Will incoming president Xi Jinping see things any differently?
There are certainly rumblings by China's more sophisticated foreign affairs pundits that the PRC should abandon the "Pariahs R Us" model of foreign affairs, which appears to be crumbling as Myanmar sidles into the Western camp, Sudan becomes a bifurcated basket case, and the Iranian economy is ground down by sanctions.
The Western press has seized on these remarks, as well as mutterings by some of China's notorious "netizens", who apparently feel that the honor of the Chinese nation is soiled when it is summoned to leap to the defense of Kim Jung-eun's embarrassingly grubby and dysfunctional regime.
At the same time, the Obama administration appears to be enticing the incoming Xi Jinping leadership team with visions of a reset in the generally fraught US-PRC relationship.
The PRC is regarding the prospects under incoming US Secretary of State John Kerry with some optimism. Secretary Kerry, who as Senator Kerry was a front-line advocate of normalization of relations with Vietnam, seems more inclined to take a "glass half full" rather than "glass half empty" view of the PRC's socialist shortcomings in democracy, human rights, and open markets.
There is some hope that the selection of John Kerry reflects President Obama's desire for a correction away from the antagonism and relentless friction that characterized Hillary Clinton's pursuit of the pivot.
A Xinhua stemwinder speculated:
Some analysts believe that Obama is now trying to rectify [former secretary of state Hillary Clinton's] "extreme" behavior toward China, and "fine tune" the "rebalancing" policy. Kerry becomes the best person to act in this regard because of his moderate conduct style . As the Obama administration has entered its second term - and the China slots at the National Security Council, State Department, and the Department of Defense have not been definitively filled - the US government has been less inclined to get into China's face on the myriad points of friction between the two powers.
The United States has been conspicuously passive in observing the current exercise in Senkaku brinksmanship, confining itself to urging both parties to step back and lessen tensions, and largely ignoring the spectacular economic and diplomatic mugging that Japan has suffered at the hands of the PRC.
In a discrete olive branch, the US national security apparatus let it be known that it was downgrading the PRC from a "Priority One" to "Priority Two" espionage target, rather counterintuitively it would seem, given the heightened emphasis on Chinese hacking, thereby eliciting howls of dismay from US defense hawks.
Also, the US State Department went out of its way to invoke the six-party "group", made up of the Koreas, China, the US, Russia and Japan, if not the "talks" as the forum for discussions with North Korea. This was in sharp contrast to 2010 circumstances, where the US and ROK joined forces to bypass the PRC and take the Cheonan issue to the UN Security Council instead.
From the February 12 press briefing:
You know that we've all said for quite some time that the Chinese have the most influence within the six-party group. That's obvious given their well-intermeshed economic relationship with the DPRK. That's why, among other reasons, it's so important for us to stay closely linked up with China, and why the Secretary's made it a priority to work well with his new Chinese counterpart. 
The message seems to be that Xi Jinping is being given the chance to take a leadership role on the DPRK account and show the world it can make some progress on the intractable North Korean issue, thereby allowing the PRC to accrue some "responsible stakeholder" cred.
Unfortunately, the North Korean issue is something of a poisoned chalice for the PRC. The DPRK's missile and nuclear weapons shenanigans are transparently intended to enable direct engagement with the United States, not reinforce Chinese suzerainty.
If the United States withholds engagement with through the six-party talks until the PRC is able to wring some gratifying concession out of the DPRK, Chinese initiatives for restraining North Korean adventurism are probably going to go nowhere and do little to enhance the PRC's regional prestige or "responsible stakeholder" credentials.
Furthermore, denuclearization of the Korean peninsula is not seen by China as a gigantic win that itself justifies the risks.
Over at the Washington Post, Max Fisher tried to boil down the Chinese objectives for North Korea to six little words: "no war, no instability, no nukes". Having delivered this concise aphorism, unfortunately, Fisher had to spend a considerable part of the article shoehorning "no nukes" into the fact that China has demonstrated little determination to compel the DPRK to denuclearize.
To the contrary, as Professor Cai Jian of Fudan University told Korea Times, there are signs that the PRC is resigning itself to the existence of the DPRK as a nuclear weapons power.
"So, now there is a debate in China that we should be realistic with the changed situation and focus our attention on how to manage Pyongyang's nuclear weapons, instead of preventing it from developing them, which is already a lost cause," Cai said.
Another Chinese analyst with a state-run think tank in Beijing echoed the view. "Look. How many of China's neighboring countries have nuclear weapons? India has them. Pakistan has them. Russia has them too. So, China doesn't give too much attention to whether North Korea is a nuclear state or not," he said on condition of anonymity.
"China can accept another neighbor who has nuclear weapons," he added. 
Actually, the PRC's position might be better described with five little words: "What's in it for me?" In the world of quid pro quo diplomacy, President Xi might expect some concessions in return for taking the risky and destabilizing step of compelling North Korea to denuclearize.
However, it is difficult to imagine the Obama administration giving China the kind of benefit it really wants: acknowledgement of the PRC's regional hegemon status by support of China's bilateral approach in its negotiations with Japan, Vietnam, and the Philippines over the various island disputes.
That is because multilateralizing the maritime disputes to create a fundamental security role for the US in East Asia is baked into the "pivot"strategy, and a turn away from the pivot to a more situational and less confrontational approach to US-China relations would be viewed as strategic backsliding.
There are distinct signs of a foreign policy debate on whether it is better to extort compliance or solicit cooperation from the PRC, one that President Obama's outgoing team still seems determined to win.
Even though Assistant Secretary of State Kurt Campbell, one of the creators of the "pivot" to Asia (though he prefers the term "rebalancing") is on the way out (actually on the way over to his old perch at the "Center for a New American Security"), he gave China's - and Secretary Kerry's - diplomats some food for thought by sharing his views on "core interests" in an "exit interview" with Asahi Shimbun:
Q: Back in November 2009, when President Obama visited China, a historic phrase was inserted in the joint statement: "The two sides agreed that respecting each other's core interests is extremely important." But this reference to "core interests" disappeared from the next joint statement, when China's president, Hu Jintao, visited the United States in January 2011. What happened?This passage undoubtedly elicited some thoughtful annotation at the PRC's Ministry of Foreign Affairs.
A: I believe that the concept of "core interest" is subject to much misunderstanding and has led to fairly serious tensions between the United States and China. The idea that if a country declares an area a "core interest," then somehow it is no longer a subject for discussion with other countries, I don't think that approach is very effective in 21st-century diplomacy. 
Traditionally, "core interests" has been the foundation of the PRC's foreign policy. Taiwan and Tibet - and resistance to any independence talk - are "core interests" that any interlocutor is expected to respect.
There was a gruesome blowup of the "core interests" debate during the first annus horribilis of US-PRC relations, 2010.
The US diplomatic team told reporters that the PRC has extended the "core interest" formulation to the South China Sea, which was taken as an assertion by the aggressive PRC hegemon that it would use military force to advance its claims - and provided the pretext for US injection into the South China Seas (SCS) island disputes at ASEAN.
The situation was considerably muddied by the facts that the PRC never publicly affirmed the application of the doctrine to the SCS, was committed to freedom of navigation and bilateral approach on SCS issues (as opposed to the "outside interference" it absolutely rejects in its traditional "core interest" areas of Tibet and Taiwan), and had previously attempted to repurpose "core interests" as a statement of priorities (like economic development) which the PRC hoped would be respected by the international community, as opposed to red lines that China would absolutely not brook being crossed.
Regardless of its scope and subtleties, the PRC's "core interest" formulation seems to be anathema to the Obama administration, which hangs its hat on "norms-based" or "rules-based" diplomacy, by which respect for all "core interests" - including that PRC bugbear, "sovereignty and non-interference in domestic affairs of other states" - are conditional upon adherence to "core principles", such as democracy, open markets, freedom to connect, and so on.
I, for one, wonder if Secretary of State John Kerry is more inclined to the traditional horse-trading approach to diplomacy implied by the "core interest" formulation, as opposed to the "rule-based" absolutes that obsessed former former secretary Hilary Clinton and, I believe, preoccupy President Obama in his quest to make sense of the world and define a leadership role for the United States within it.
Maybe Kurt Campbell's statement should be seen as a shot across Secretary Kerry's bow, as well as China's, to declare that reaffirmation and possible expansion of the "core interest" formulation is a creeping challenge to the "core principle" that the US should repudiate.
"Core interest" pushback was also central to an earnest op-ed penned by Nina Hachigian at the Center for American Progress, another sympathetic think tank, to guide secretary Kerry (in addition to invoking the guidance of pivot great helmswoman Clinton, it helpfully included a draft speech for Kerry to deliver to the Chinese, accurately but presumably inadvertently reproducing the eye-glazing prose with which "Big John" delivers his thoughts):
Many analysts in China are working to give content to Xi's call for a new type of great-power relationship. Some preliminary ideas center on calling on the United States to halt actions - such as selling arms to Taiwan - that infringe on China's "core" national security interests. While visions based on dramatic changes to longstanding US policy are not likely to fly in Washington, the Obama administration would do well to offer its own ideas of what could work as a future vision of US-China relations.
The Obama administration's suggestion could begin with this: A peaceful future is one in which the United States and China, along with the other major powers, are embedded in a web of laws, norms, and institutions. Such an international architecture can draw boundaries around the two nations' natural rivalry.
When each side is sure that the rules are fair and followed, competition need not be hostile. Forums for dispute resolution - such as the one in the World Trade Organization - can channel frictions. And collaboration will be easier when both countries know that they are shouldering a fair share of the burden along with other nations.
The basis for this future vision lies very clearly in the ground that the Obama administration has already laid. Secretary Clinton has articulated many times the importance of a rules-based system and how important China's support for it is.
In evaluating who will have the upper hand in US China policy, it should be remembered that the conciliatory, somewhat pompous Kerry was President Obama's second choice for secretary of state.
The first choice was United Nations Ambassador Susan Rice, champion of the Libyan intervention, advocate of a broader interpretation of R2P ("responsibility to protect"), and all-round scold of the PRC and other authoritarian misfits at the UN.
Ambassador Rice fell victim to the confirmation process - and the Republican compulsion to demonstrate to its traditional white base that, if it could not defeat Obama in the presidential election, it could at least deny some other black person a high government office.
When Rice withdrew, Obama called on Kerry, who was unopposable, not necessarily because of his whiteness or his congenial policy views, but because of his role as chairman of the Senate Foreign Relations Committee and his ability to call on his Republican colleagues for support.
Tea-leaf readers will draw their own conclusions about the closeness of Obama and Kerry. For me, a perhaps telling detail was that Kerry was chosen to impersonate Mitt Romney in the preparation for the first (disastrous for Obama) presidential debate, but reportedly ended up sounding more like Kerry - a politician famously in love with his own voice and unwilling to end the romance by finishing a statement - than the jittery, soundbite-scattering Romney.
If, in his heart, President Obama blames Secretary Kerry for the near catastrophic loss of his debate mojo, perhaps he will entertain the secretary of state's councils but not necessarily heed them.
I think that President Obama, a cerebral, intense, and rather remote man who has never succeeded in establishing a rapport with the CCP apparatchiks who run China, is very much in tune with Clinton's aggressive, strategic approach to Asia embodied in the formulation of the "pivot to Asia".
In this case, the inducements that the Obama administration is willing to offer for Chinese support on North Korea are probably negative: cooperate on North Korea and we won't be as hard on you on the core principles involved in the South China Sea, the Senkakus, intellectual property, and cyberwarfare.
In other words, if the anti-core interest view point prevails in the White House, Secretary Kerry will be unable to deliver substantive advantages to President Xi Jinping beyond the intangible psychic benefits of having played by the rules.
That, it is safe to say, not the kind of payback that excites President Xi.
Clearly, the Chinese foreign policy commentariat is already bracing for a return to the bad old days typified by Obama's first term.
On February 17, Xinhua ran a think piece that downplayed the PRC's role in the North Korean nuclear issue, and belittled expectations that China should be responsible for improving the DPRK's behavior: From "Chinese experts see US-DPRK antagonism as root cause of nuke test":
The United States should reflect seriously on the latest nuclear test of the Democratic People's Republic of Korea (DPRK), which was caused by long-standing antagonism between the two countries, Chinese experts said.
After the DPRK's nuclear test earlier this week, some Western media said China's policy toward the country has proven to be a failure, a straw-man fallacy refuted by Chinese experts and scholars.
Unless Kerry is able to convince Obama to make some major changes in US policy, probably the only progress US-China policy will make is backwards - back to the confrontational certainties of Obama's first administration.
1.How will John Kerry deal with China?, CCTV, February 2, 2013.
2. US State Dept Daily Press Briefing - February 12, 2013.
3. China to acknowledge N. Korea as nuclear state, February 13, 2013.
4.INTERVIEW/ Kurt Campbell: China should accept US enduring leadership role in Asia, February 9, 2013.