Authoritarian regimes are hard to predict in terms of why they make specific decisions -- when major shifts are likely in their foreign policy, even on issues of high politics; and especially how candid those regimes are in dealing with each other.

These are some of the bewildering issues involving Sino-North Korean relations. We know that North Korea is heavily dependent for its survival as a state on China’s economic assistance. However, it is anyone’s guess how much leeway Beijing has granted to Kim Jong Il. North Korea specialists in Washington do little better than their Kremlinologist counterparts did during the Cold War years in understanding and predicting the decisions taken by the leaders of the Soviet Union.

However, every North Korea or China specialist inside the U.S. was awe-stricken when, on November 23, 2010, North Korea shelled South Korea’s Yeonpyeong Island in the Yellow China Sea, which is only 50 miles off the South’s northwestern coast.

The question everyone asked was how much in advance the Chinese leaders knew about the incident. If they were indeed aware of it, did they approve such a precipitous action? If they were not, then how far would they go in their attempts at controlling the spillover effects of North Korea’s seemingly irrational action on US-China ties, and what actions would they take in order to avoid its repetition in the future?

From North Korea’s perspective, it went to the extreme of shelling the South Korean territory (even though it was a part of disputed territory between the two Koreas), because it was annoyed at continued U.S.-South Korea military exercises. It was highly critical of those exercises. Another explanation is that Pyongyang raised the level of crisis a few notches because it wanted to restart the Six-Party talks and use that dialogue to “legitimize” the succession of Kim Jong-Un after the projected retirement of his father, Kim Jong-Il. From the South Korean point of view, the military exercise was not aimed at provoking the North. Its chief intent was to keep the US-South alliance vibrant, vital, and visible within the region.

The fact of the matter, however, is that both Koreas are half right in their claims. The military exercise did have an element of coercion of the North, which decided to act perhaps just to show its bravado that it was not intimidated by such measures. On the other hand, Pyongyang used that opportunity to intimidate the South, knowing the limits of the countermeasures both the United States and South Korea would exercise in order to not worsen the situation. More to the point, Kim Jong Il certainly wishes to restart the Six-Party Talks without unraveling his nuclear weapons program. And this is one way to achieve his objective.

The chief problem related to the Korean conflict is that, even though it remains one of the last remnants of the Cold War conflict, at least from China’s perspective, there remains considerable doubt that it may (or should) be resolved. Chinese leaders have demonstrated their intrinsic capabilities of operating as great chess players in their dealings with the United States, both in the regions of close proximity as well as in distant areas.

Other than the Korean conflict, Northeast Asia is not an area of high contention between the United States and the PRC. Through calling the East China Sea part of its “core interests,” China might be testing the extent and nature of the US response. The Obama administration’s lack of hesitation in calling China’s bluff was indeed a deft move. By asserting its own resolve to stand by Japan in the wake of a military conflict with China over the Senkaku/Diaoyu Island chain, Washington has taken up the gauntlet. At the same time, America’s overtures toward Vietnam and Indonesia are clear-cut signals that the lone superpower is not interested in acting as the alleged “declining hegemon” of Asia.

If anything, America’s clout in East Asia is showing palpable promise of an upward move. Vietnam is an active seeker of a nexus with America as its own countermeasures against China’s threatening maneuvers. At the same time, Indonesia is very much in quest of a major role in East Asia. Washington not only welcomes that role, but is poised to play a crucial role in it. China is also interested in getting close to Indonesia, while at the same time doing all it can to avoid any mounting tensions in East Asia.

Given these realities, China would deal with the Korean conflict with utmost care. The conflict involving the two Koreas is important for several reasons.

First, even though the conflict is decades old, the reasons for its high relevance are related to the fact that the United States – an ally of South Korea – and the PRC – the chief supporter of North Korea – are very much embroiled in competition for dominance in East Asia. For the United States, that dominance has historical roots; any diminution in its modalities would be construed as flagrant evidence of already faltering American hegemony in Asia.

Second, and related to the preceding, is that, despite its heavy involvement in the wars in Iraq and Afghanistan, the intensely future-oriented American strategic planners have already switched their focus to Asia. The general buzz, even among civilian American strategic thinkers, has been that the mid-to-late 19th Century and the entire 20th Century represented an era of Eurocentrism. Two World Wars were fought primarily involving European states. The overall cynosure of the two superpowers during the Cold War years was not to allow any major retrenchment of their sphere of influence in Europe.

The 21st Century, on the contrary, will be all about Asia, especially as the United States is struggling so massively to wind down the wars in Iraq and Afghanistan wars that seem to be playing a major role in bleeding its economy toward a potential collapse, while struggling to stay ahead of China in the realm of economics and international trade.

In the absence of any major war, the US and China will only “duke it out” on trade and other related issues in order to bankroll their military superiority and also to win allies and friends on that vast continent. For the US, those maneuvers are all about sustaining its long-standing military dominance in Asia, while for the PRC, it is all about surpassing the United States in the field of military superiority (given the fact that China’s economic rise is much more impressive that the current rate of its military rise).

Given the nature of Sino-American competition in Asia, how the Korean conflict will be resolved is of great import to both Beijing and Washington. If its resolution leaves North Korea armed with nuclear weapons, then China may be able to focus its attention on other heady issues. Even then, it will have to keep the North Korean leaders under greater restraint than it has in the past.

Third, in the competition between the US and China, countries like Japan, India, Indonesia, and to a lesser extent, middle-to-small powers like Australia, Thailand, Malaysia, and the Philippines will play a crucial role in deciding which superpower they will favor: the US, a superpower that is increasingly looking like the power of a bygone era, or the PRC, which is similarly appearing to be a superpower of the future.

In this competition, Japan and India have already cast their lot with the United States for reasons of their own. For Thailand, Malaysia, and the Philippines, even though by and large they remain pro-American, their loyalties may still be up for grabs when China decides to unleash the full power of its checkbook diplomacy. The power of that diplomacy has already proved a formidable reality in Africa and Latin America.

The plus side of the US hegemony stems from the fact that, as a rule, it is what John Ikenberry calls a “constitutional hegemony.” The American predilections for democracy and institution building create within the region of its dominance an order “that goes beyond balance of power politics to exhibit “constitutional’ characteristics.” Under this hegemony, countries are not threatened in the exercise of their sovereignty. That certainly has been the case in post-World War II East Asia, as has also been the case in the Western Europe.

China’s emerging hegemony, on the other hand, is viewed with considerable anxiety by the East Asian states, especially when the PRC starts to add new issues to its list of “core interests” on which it shows little inclination for further negotiation. However, there is that hope on the part of various Asian countries that China’s preference for a negotiated solution to the Korean conflict would also be manifested in other heady issues involving China and its East Asian neighbors.

China did not disappoint its East Asian neighbors when it started to urge both South Korea and the United States to restart the Six Party talks immediately after North Korea’s shelling of Yeonpyeong Island. The Obama administration, after showing initial hesitation, is leaning toward adopting that course. Right now, it is insisting that Pyongyang accede to the demands from Seoul and Washington and agree to unravel its nuclear weapons program. However, they both know that it is not likely to happen. The only way North Korea can ensure its survival is by remaining a hermit and Stalinist state with a powerful leadership cult. Under such a scenario, the possession of nuclear weapons serves as a major guarantee of regime survival.

In the final analysis, the best possible option for China is also a continuation of the status quo in Pyongyang, with North Korea’s nuclear weapons intact. Both Washington and Seoul also know that reality. Thus, they both will have to eventually agree to the status quo, provided that North Korea remains under strict constraints – which can only be guaranteed by China – not to proliferate nuclear weapons, and/or nuclear know-how to other countries that top America’s list of “concerned countries” – most prominently, Iran.