China's Xi Jinping grapples with rising cost of supporting Kim Jong Un

Chinese President Xi Jinping speaks during a ceremony held to commemorate the 90th anniversary of the founding of the People's Liberation Army, on Aug 1, 2017.
Chinese President Xi Jinping speaks during a ceremony held to commemorate the 90th anniversary of the founding of the People's Liberation Army, on Aug 1, 2017. PHOTO: EPA

BEIJING (BLOOMBERG) - It's getting harder for Chinese President Xi Jinping to maintain support for wayward ally North Korea.

For weeks, Xi has been caught in the middle as leader Kim Jong Un lobbed intercontinental ballistic missiles into the Sea of Japan and US President Donald Trump vented his frustration with warnings of "fire and fury".

China has urged calm while backing tighter sanctions against North Korea to ward off U.S. threats of punitive tariffs and military strikes.

The prospect of nuclear war has sparked a debate in Beijing about maintaining support for the Kim dynasty, which dates back to the Korean War in the 1950s. The two countries have grown apart over the decades, with China opening up to become the world's second-biggest economy while North Korea has become more isolated and impoverished.

While China officially wants a nuclear-free Korean Peninsula, Beijing has long tolerated North Korea's weapons programme because it sees the collapse of Kim's regime as a greater strategic threat. That could lead to U.S. troops on its border aligned with a unified Korea, eliminating the buffer that North Korea now provides - along with its regular threats against common enemies.

Yet China's rise on the world stage has given it a bigger stake in maintaining global stability, not least to keep up economic growth rates that underpin the Chinese Communist Party's grip on power. That gives it an interest in ensuring that Kim doesn't do anything that could lead to war or economic trouble for China.

"I don't know where the breaking point for Beijing is yet, but my view is that China is gradually, but clearly, moving toward a tipping point," said Zhu Feng, dean of the Institute of International Studies at Nanjing University, without elaborating on what that would entail.

"Every provocative move by the Kim regime pushes China a little further from North Korea, and the distance between two countries has become great."

The Communist Party-affiliated Global Times has provided a glimpse into what a Chinese shift might look like. During heightened tensions in April, it said China should consider cutting off oil imports. An editorial on Friday said that China should stay neutral if North Korea starts a war with a missile attack, but intervene if the US and South Korea seek to topple Kim's regime.

"China opposes both nuclear proliferation and war in the Korean Peninsula," the editorial said.

"It will not encourage any side to stir up military conflict, and will firmly resist any side which wants to change the status quo of the areas where China's interests are concerned." The editorial was an exception in China's tightly controlled media, where the tensions had been buried under reports about an earthquake in Sichuan and a US Navy challenge to Chinese territorial claims.

North Korea didn't make the top 50 trending topics on the Twitter-like Weibo, even as the situation dragged down markets around the world.

Shortly after Trump tweeted that military solutions were "locked and loaded", Xi told him in a call that all sides should avoid inflammatory comments while agreeing the Korean Peninsula should be denuclearised.

The White House said that Trump looked forward to visiting China this year, and called his relationship with Xi "extremely close".

China and Russia both backed harsher United Nations sanctions earlier this month that cut North Korea's roughly US$3 billion (S$4.08 billion) in exports by about one-third. The deal excluded oil imports - the biggest economic lifeline for Kim's regime - and it stopped the US from levelling penalties on Chinese banks that handle North Korean cash, at least for now.

"US China frictions will rise again when UN sanctions fail to change North Korean behaviour," said Andrew Gilholm, director of North Asia analysis at Control Risks Group.

"Kim seems determined to get to the point where it's impossible for the US to deny it's a nuclear state. He may be in a hurry to get there before tighter sanctions kicks in, and he wants to force US acceptance of his regime."

China, which fought alongside its neighbour in the Korean War, provides most of the isolated country's food and fuel imports. North Korea has increasingly rebelled against its longtime benefactor, criticising its cooperation with the US and rebuffing diplomatic overtures from Beijing. Xi hasn't held a summit with Kim since taking power in late 2012.

Chinese Foreign Minister Wang Yi has argued that the sanctions would help get North Korea to the negotiating table. For months, China has pushed a "suspension-for-suspension" proposal, in which North Korea would halt further nuclear and missile tests in return for the US and South Korea stopping joint military exercises in the region.

North Korea has expressed an openness to talks only if the U.S. first gives up its "hostile" policies. The US wants Kim to be prepared to give up his nuclear weapons - a prospect that many analysts view as unlikely since Kim sees them as essential to his survival.

China is frustrated because it sees its freeze proposal as the best way forward, according to Yang Xiyu, a former negotiator for China in the six-party talks on North Korea's nuclear program that collapsed in 2009.

"It's relatively easy to carry out because it only needs both sides to make a political decision," he said.

"If the Americans & Co. don't accept it, they can come up with a better proposal and we will be all ears. But do they have one?

" For China, North Korea is just one of several strategic concerns in its relationship with the U.S., in addition to arms sales to Taiwan and territorial disputes in the South China Sea. Even if Beijing has grown weary of Kim's brinkmanship, it hasn't shown that it's ready to surrender the larger geopolitical game to the U.S.

"North Korea is a burden to China, but it doesn't mean China would go against Kim Jong Un," said Song Guoyou, director of Center for American Studies at Fudan University in Shanghai.

"The two parties and nations have a deep and intertwined relationship and that can't be changed overnight."