Townsend said it’s important to remember China’s strategic interests.
“They don’t want to see chaos in North Korea but they also are not fans of a unified Korean peninsula because what they don’t want to see is U.S. military force on their border in a unified Korea,” Townsend said. “And so we have to understand what each country’s strategic interest is and try to play that to our best advantage.”
Most of China's giant state-owned enterprises have scant involvement with North Korea; they have too many interests elsewhere to risk getting sanctioned in pursuit of limited profits. Smaller firms more often find smuggling worth the risk, and Beijing often cannot control them, because local authorities protect them.
This reflects something about China that many Westerners miss: The People's Republic is much less centralized in practice than it may appear to be. At any given moment, Beijing can set a few top priorities and get very impressive grass-roots enforcement of them — think, for instance, of compulsory birth control.
But it also has much to do with the regime's endemic corruption, and with its slow response to widespread complaints about pollution, to name just two problems, which both reflect often close ties between local officials and profitable businesses. Hiding even basic data from superiors is common.
Here the bigger problem comes into view. Kim has the strength of weakness: that is, he can be uncooperative without worrying too much about being cut off, precisely because China knows his regime is vulnerable and does not want it to collapse. (The country does not face a famine like that of the 1990s, but cutoffs of strategic goods might cause a political meltdown.)
If Kim's government did fold, huge numbers of refugees would go to China. Even if a post-Kim transition was fairly orderly, it would very likely lead to a united, U.S.-allied Korea bordering China: also a very unwelcome prospect for Beijing.
And if the transition wasn't orderly — a more likely scenario — nightmares galore could follow. There would likely be a scramble among military factions for control of North Korea's existing nuclear weapons — which could easily draw in South Korean, U.S. and Chinese troops without clear lines to separate them, and/or lead some North Korean group that became desperate either to use the nukes before losing them or unleash the huge conventional arsenal targeted at Seoul. Further escalation might then follow.