China has clearly come to see North Korea as a liability rather than a close ally over the last few years, threatening peace in the region and thus threatening China's profit margins for trade in the area.

Over the last year or two, a number of 'academic' discussions have taken place in the Chinese media over the worth of the North Korean alliance, what China gets out of it and so on. Given that little happens in the Chinese media without the nod of Beijing, it's probable that these discussions are a warning shot directed at North Korea: "Don't rock the boat automatically assuming we'll be there to bail you out." Unfortunately, this may be a little too subtle for Pyongyang to take on board.

Certainly if North Korea blatantly provokes a war, I can't see China taking their side militarily. Likely what will happen is something similar to how Russia rolled into Kosovo. The war breaks out, lots of fighting along the DMZ, and Chinese 'peacekeepers' cross the border, occupy Pyongyang (or what's left of it after the American, South Korean and Japanese air strikes have finished) and stop the North Koreans from fighting. Lots of hardline negotiations eventually result in Korea being reunified under the southern leadership (with a ton of favourable trading concessions with China) and American troops pulling out. The problem of a democratic, unified Korea on China's doorstep is then outweighed by the many trillions of dollars South Korea has to spend to rebuild both itself and the North and hopefully the fact that any humanitarian crisis can be solved by the South and the UN, not China.

The problem is that this outcome still involves tens to hundreds of thousands of South Korean civilian deaths, probably many more in the North, something the South and the USA seem keen to avoid as much as possible. The issue for the South and the USA is that avoiding conflict may increase the likelihood of North Korea collapsing by itself, but it equally means that a later confrontation may take place at a time when North Korea has many more and more powerful nuclear weapons, and is thus far more dangerous.