How to resolve the Korean crisis

China is "communist" in name rather than fact. It does not want any violence on the Korean peninsula. Such violence might scare off potential foreign investors on the Chinese mainland. Besides, violence might lead to an influx of North Koreans fleeing over the Yalu River into China. China does not welcome refugees.

China's immediate reaction to the shelling of Yeonpyeong has been to call for an examination of the facts. It was not an automatic rush to the defence of North Korea.

Having come so close (again) to the brink of conflict, perhaps North Korea - under Chinese pressure - might be more amenable to the Six-Party negotiations that could offer some hope for peace. The six states are the two Koreas, China, US, Russia and Japan - all of which have a lot to lose and nothing to gain from a resumed Korean conflict.

Ironically - as a symbol of the new 21st century power architecture - the US is now looking to China to set the lead on North Korea. Now that China is becoming more engaged in global economic and political affairs, this will be one of its first major tests in diplomacy.

The Americans have failed - let's see if the Chinese can do any better.