North Korea's declaration on 10 February 2005 that it has "manufactured nukes" for self-defence and subsequent withdrawal from the six-party talks has put China in a quandary. Pyongyang has apparently become the world's ninth nuclear power. In a December 2001 report, the CIA assessed that Pyongyang had produced two nuclear weapons from plutonium extracted from spent reactor fuel. A CIA assessment of August 2003 indicated Pyongyang reprocessed 8000 spent fuel rods stored at Yongbyon believed to contain 25-30 kg of plutonium. This would be sufficient to build 5-6 warheads, assuming that each warhead needs 5 kg of plutonium.

The Stalinist country's nuclear brinkmanship has deeply embarrassed Beijing - the host of the six-party talks. China responded to Pyongyang's declaration by reiterating its hopes for a denuclearized Korean Peninsula, exhorting the communist state to resume negotiations. China expressed concern that, if the six-party talks were allowed to drift, it would endanger the security dynamics of Northeast Asia. Though Beijing has pledged to work "with a sense of urgency" to bring Pyongyang back to the negotiating table, can China deliver what it promises?

North Korea and China being historical allies were often considered "as close as lips to teeth". During the Cold War, Pyongyang was viewed as China's first line of defence and strategic buffer zone against the US. Their camaraderie was obvious during the Korean War (1950-53). Beijing is also the main supplier of food and energy to Pyongyang. At present, however, China is severely constrained by several factors that prevents it from using its leverage against Pyongyang.

China is deeply concerned about a North Korean refugee crisis. The growing number of North Koreans along its northeastern border poses a threat of demographic instability to China. Northeastern China is an industrial rust belt where unemployment is acute. As these refugees migrate to Beijing, the message to those remaining in impoverished North Korea is mass exodus to China. Beijing is extremely wary of this influx of refugees into its own territory, and this was the prime impetus for providing aid to Pyongyang. Presently, the mainland provides one million tons of crude oil and another 150,000-200,000 tons of refined products to Pyongyang every year. Beijing also sends US$ 500 mn to US$ 1 bn worth of energy aid (fuel) to the North every year.

China is deeply focused on reaching its internal economic development goals, which face the threat of disruption from a possible collapse of the North Korean regime. In the event of a breakdown of Kim Jong II's regime, Seoul, which is China's major foreign direct investor, will be compelled to channellize its investments for the reconstruction of North Korea. China seeks to increase its per capita GDP to US$ 3000 by 2020. Any disruption in direct foreign aid will jeopardize attainment of its economic goals. North Korea is aware of these dynamics, which constitutes another reason for China to safeguard its stability.

China has an interest therefore in the resumption of the six-party talks, which have enhanced its international prestige, and earned it the reputation of being a global supporter of disarmament. China's influence is more effective since America does not want to hold any dialogue with Pyongyang. The more influence China is able to wield, the more US will be soft on China's claim to Taiwan and its human rights record. However, Pyongyang's intractable nature has placed China in a bind. Pyongyang is aware that its participation is invaluable in the six-party talks and is using this as an instrument to extract economic aid and fuel from Beijing, which fears an impoverished country brandishing nuclear weapons on its border. This puts a strict leverage on China's influence.

China is also deeply perturbed by North Korea's nuclear posture threatening the security dynamics of Northeast Asia. A Nodong missile carrying a nuclear warhead could hit Tokyo or Osaka in less than ten minutes. Pyongyang's nuclear weapons also pose a threat to Seoul. North Korea's formidable nuclear posture will enhance regional insecurities in the Korean Peninsula that would inevitably up the nuclear ante in Northeast Asia.

China's assurance of bringing Pyongyang back to the six-way talks is deeply affected by these factors. Though China has tried to use its leverage in the past by stopping oil supplies in 2003 and closing down a well-established Chinese academic journal - Strategy and Management - for publishing a highly critical article about Pyongyang in 2004, such actions did not bring about the intended results. Pyongyang's nuclear blackmail has deepened Beijing's diplomatic quagmire. The coming weeks will determine China's reputation as an emerging great power and a stabilizing influence in Northeast Asia.