Those who believe China has full control of North Korea stress the historical origins of Chinese–North Korean friendship. Both were once hard-core socialists, and they fought shoulder to shoulder. The Sino–North Korean Mutual Aid and Cooperation Friendship Treaty signed in 1961 still stands. They also note that today, China accounts for 90 per cent of North Korea’s foreign trade. A line of thought follows: China can strangle North Korea’s economy by cutting off food and energy supplies altogether.

But it is not so simple. Since Kim Il-sung put forward the ‘Juche Idea’ in 1955 underscoring self-reliance, factions close to Beijing among high-level North Korean politicians have been purged. Kim Jong-un’s promotion of the ‘Mount Paektu bloodline’ to legitimise his rule has further undermined the political and ideological bonds between China and North Korea.

Besides, a Chinese economic blockade may not be effective at stopping North Korea’s nuclear program. Instead, it would likely inflict pain on the North Korean people and may even cause Kim Jong-un to strengthen his authoritarian governance domestically.

Those who believe China has no control of North Korea point to the fact that North Korea has conducted nuclear tests regardless of China’s opposition and stake in the Korean Peninsula. While North Korea once considered economic reform under Kim Jong-il and was open to suggestions from China, the trend was reversed when Kim Jong-un came to power. Worse, he has reinforced the regime’s ‘military first’ politics to the extent that nuclear weapons are now the most important source of his political legitimacy. As a result, Chinese attempts to talk North Korea out of developing nuclear weapons would be in vain.

But China risks being marginalised if its influence on North Korea is minor and its willingness to intervene in the tension on the Korean Peninsula too little. This would do no good for preventing a crisis and is not in China’s national interest.

China has two policy options for North Korea: the ‘carrot’, and the ‘stick’. Both are interwoven with economic, diplomatic and security issues.

When it comes to the ‘carrot’ approach in the economic sense, China can further encourage North Korea to implement reform. But for the economic ‘carrots’ to work, the only option is to significantly increase the rewards. China could incorporate North Korea into the Belt and Road Initiative on the condition that North Korea demonstrates a more consistent political commitment to attract larger-scale foreign investment. But this strategy depends on the extent to which Kim Jong-un can maintain legitimacy while accepting the market economy.

In terms of economic ‘sticks’, China can impose economic sanctions. Despite a range of UN and US sanctions already in place, North Korea does not seem threatened. But China’s economic sanctions can be tougher. For example, the Chinese Ministry of Commerce’s 17 February announcement that China would no longer import North Korean coal until the end of this year has drawn widespread attention and increased pressure on the DPRK.

And for the first time, China’s state-run Global Times released an editorial discussing cutting off the oil supply to North Korea. Whether it is cutting off food sources or discontinuing oil supply, such measures should only be a last resort. The former could trigger a large-scale famine; the latter would be at the expense of oil pipelines and related infrastructure, making future restoration of supply extremely difficult. Meanwhile, the economic sanctions may be taking effect at such a slow rate that they cannot nip North Korea’s long-range missile development in the bud.

China’s security ‘carrot’ is to guarantee absolute security for North Korea. Pyongyang’s adherence to nuclear weapons is out of its deep-rooted safety concerns, not for the sake of attack. But the deadlock is hard to break — North Korea aims to use nuclear weapons as bargaining chips in negotiations with the United States, whereas the United States will not bargain with North Korea as long as it is nuclear-armed. Since North Korea wants a promise of security that the United States will not give, the alternative is to ‘activate’ an alliance treaty between China and North Korea. But this will only raise tensions.

A more neutral strategy is to convene China, the United States, South Korea and North Korea to sign a peace treaty. Though not in the existing options menu, the United States can consider recognising North Korea’s nuclear status and manage the crisis within the framework of nuclear non-proliferation.

North Korea with nuclear weapons is undoubtedly more threatening to the security of Northeast Asia than without, but all parties, particularly the United States, should be more focused on what circumstances would prompt North Korea to use nuclear weapons and what the ripple effect will be if North Korea’s nuclear status is accepted. The United States’ worry is that a nuke-embracing North Korea could destroy its alliance network in Northeast Asia, or will at least undermine South Korea and Japan’s belief that the United States will risk being attacked by North Korea just to protect its allies.

The security ‘stick’ is to proactively prevent the deterioration of the situation. The crisis on the Korean Peninsula poses a major threat to China’s security. First, the nuclear test site is less than 100 kilometres from the Chinese border. This is a challenge in and of itself, but there is also the risk of earthquakes and subsequent nuclear contamination. Second, an influx of North Korean refugees due to military escalation could act as a drag on the Chinese economy, and armed soldiers fleeing over the border into China would also lead to serious security risks. From a crisis management point of view, China must deploy more military forces in the border area.

Fortunately, the recent summit meeting between China and the United States has defused US–China tensions, providing China with more freedom in deterring North Korea.

Given the existing situation on the Korean peninsula, conventional efforts are doomed to failure. But without agreement between the key stakeholders, these ‘carrot’ and ‘stick’ options also cannot fundamentally solve the North Korea issue. All parties should break away from old conventions and put forward countermeasures that were once deemed ‘unthinkable’.

The United States should seriously assess the extent to which it could accept North Korea’s temporary nuclear status. China’s concern should be whether in the long run it should facilitate a nuclear-free, unified Korea that is free of US troops and on good terms with the United States and China.

He Fan is Professor of Economics at the HSBC Business School, Peking University and Executive Director of Research Institute of Maritime Silk Road (RIMS).

Xingjie Sun is Associate Professor at the School of International and Public Affairs, Jilin University.

A version of this article was originally posted here on Caixin.