The deadly provocations by North Korea in the Yellow Sea in 2010 – the Ch’ŏnan sinking and the Yŏnp’yŏng Island shelling – drew condemnation and limited military responses by South Korea, the U.S. and Japan, but Beijing has been reluctant to go beyond counselling restraint to all parties. While declining to call Pyongyang to account, it criticised Washington for stepped-up military exercises with allies in North East Asia. Beijing’s unwillingness to condemn North Korea prevented a unified international response and undermines China’s own security interests, as it invites further North Korean military and nuclear initiatives, risks increased militarisation of North East Asia and encourages an expanded U.S. military and political role in the region. Because it is seen as having failed to take greater responsibility to safeguard stability, China has also damaged its relationships in the region and in the West. The joint statement Presidents Hu and Obama issued on 19 January has helped, but China has ground to make up if it is to recover credibility as an impartial broker in the Six-Party Talks on North Korea’s nuclear program.

Despite the threat to stability posed by inter-Korean clashes in the Yellow Sea along the Northern Limit Line, China has historically downplayed them as a natural consequence of the unsettled maritime boundary. Likewise, it does not consider Pyongyang’s conventional provocations and the demands for action they raise – particularly in the UN Security Council – as serious as those regarding its nuclear tests. But the approach to the North is also powerfully shaped by rising concern about a perceived U.S. strategic return to Asia and opposition to further entrenchment of American regional military and political presence.

Beijing initially downplayed the Yŏnp’yŏng shelling and criticised U.S. military deployment and exercises with allies in North East Asia. However, the subsequent spike in inter-Korean tensions altered its threat perception and led it ultimately to tone down criticism of Washington and send an envoy to Pyongyang. During President Hu Jintao’s visit to the U.S. from 17 to 21 January 2011, he agreed to a joint statement that emphasised the importance of North-South dialogue and expressed concern for the first time regarding the Democratic People’s Republic of Korea’s (DPRK) uranium enrichment program.

But China continues to strengthen its political and economic ties with the DPRK. Since 2009, the frequency of high-level visits has increased dramatically, including an unprecedented two trips by Kim Jong-il in 2010. Policy toward the DPRK continues to be fundamentally shaped by historical and security considerations: Korean War comradeship, together with the desire to preserve the North as a buffer against the U.S. and avoid a regime collapse that would trigger a flood of refugees into China. The disastrous currency reform in November 2009 and developments in the DPRK succession process in 2010 deepened Chinese concerns about stability. The leadership transition in particular is a top factor in calculations; Beijing hopes that support for stability during the ongoing process will result in closer political ties and make the next generation of leaders more amenable to economic reform. While support to North Korea is subject to internal debate, traditionalist and conservative forces dominate policymaking and are supported by nationalist public opinion.

China’s growing power and foreign policy confidence are important factors underlying its ambivalence about the Ch’ŏnan and Yŏnp’yŏng Island incidents. After the sinking and what it viewed as a biased and flawed international investigation, it drew on its increased leverage to dilute the Security Council statement. And despite North Korea’s undeniable responsibility for the Yŏnp’yŏng Island shelling, it blocked Security Council action. In the past, Beijing’s willingness to at least calibrate its responses to North Korean provocations was seen by the West as essential for moderating Pyongyang’s behaviour. Over the past year, however, Beijing has not only escalated its claims to disputed territories in the South China Sea and Diaoyu/Senkaku Islands, but also increasingly resisted external pressure over Iran as well as North Korea. It feels under less pressure to yield to external demands and increasingly expects quid pro quos from the West in return for cooperation on sensitive third-country issues.

However, Beijing’s increased solidarity with Pyongyang and reluctance to censure it for the deadly Yellow Sea clashes has significantly strained relations with South Korea, Japan and the U.S. Seoul was offended by tardy condolences for the Ch’ŏnan sinking and the warm welcome Kim Jong-il received immediately following South Korean President Lee Myung-bak’s visit to China. The South, the U.S. and Japan have intensified trilateral coordination on North Korea. Their rejection of China’s call for emergency consultations in the Six-Party format following the Yŏnp’yŏng Island shelling showed widening differences on threat perception and management.

China’s influence in Pyongyang makes it crucial for international efforts to address North Korean provocations, and how it deals with clashes in the Yellow Sea is an important test of its willingness, capacity and credibility in handling regional conflict risks more generally. However, Beijing is undermining both its own and regional security by downplaying Pyongyang’s deadly behaviour in the Yellow Sea. Diplomatic shielding of the North, particularly at the UN, has damaged its international image and weakened its standing as an honest broker in the Six-Party Talks, while encouraging risky conventional and nuclear initiatives by North Korea. China’s behaviour has caused South Korea and Japan to strengthen bilateral coordination and their military alliances with the U.S. and consider expansion of their own missile defence systems, intensifying the risk of a regional arms race. China’s policy of supporting Pyongyang instead of holding it to account – ostensibly for the sake of stability – is heightening the risk of conflict on the Korean Peninsula.

Beijing/Seoul/Brussels, 27 January 2011