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They found a nice tool to strangle N. Korea and pull China and S. Korea away from it. I think that China will still try to fight U.S. move overall while accommodating some of it. However, that will lead to more Chinese financial institutions getting slapped with financial sanctions. Furthermore, many overseas accounts into which corrupt Chinese officials put their ill-gotten money will be also at great risk. Their own "personal" fund would be in grave danger. Lastly, further obstruction may touch off boycott of 2008 Beijing Olympic Games. As for S. Korea, it is more vulnerable and far less card to play against U.S. if U.S. could get really serious. S. Korean corporations which set up ventures in N. Korea could be slapped with financial sanctions for dealing with a known criminal regime. So are its banks. It will easily mess up its economy without firing a shot. When China and S. Korea get detached from N. Korea, N. Korea is a toast.

China may have been trying to frame the N. Korean nuclear crisis as the choice between Taiwan and N. Korea for U.S.. Now U.S. could be framing it in a different way: the choice between siding with N. Korea or keeping ill-gotten personal stashes and Beijing Olympics while warding off sanctions on Chinese financial sector.

Bush seems to go about it off the radar screen in a real quiet way.

At the minimum, China would want to come out vastly increasing its hold on N. Korea economically. While accommodating Kim Jong-il's intransigence, it is exacting a price from it. China is now taking steps to integrate N. Korean economy into it. According to some reports, it took over economic control of Shinuiju, one-time set aside for N. Korean special economic zone. China basically killed it at the time. Now it took over the place. China also wants the exclusive right to develop oil-reserve suspected to be in a N. Korean shore adjoining China's Bohai Bay oil field. Chinese would probably go for the sea-access to the East Sea thought N.E. corner of N. Korea. That way, E. Manchuria does not need to depend on Yellow sea ports thousands miles away for its trade. Second, PLAN can now has a strategic presence in the East Sea, which would allow them to better counter U.S. and Japanese naval presence.

Everyone's eye is on Iran at the moment and North Korea seems to have dropped from the public consciousness. They aren't a separate problem to China. Iran presents a potential threat that the Chinese haven't faced since the 1930's - outside pressure that can hurt their economy. Should the Straits of Hormuz be closed there will be factories that come to a halt in China. Not good to be that vulnerable.

North Korea might help them in that regard. Its troublemaking potential through its nuclear programs is being eclipsed by Iran and it really doesn't have much else to offer. But any oil found off Korea will take years to exploit, and Iran is pounding the drum now.

So when does the publicity-starved Kim get impatient and pop off a nuke of his own, if he even really has one? And what happens when he does? This could get interesting very fast.

Macau is one dark world sitting next to Hong Kong. It may have the appearance of a modern city but its people lack the characters of a modern civic society. Ever since the Cultural Revolution in 1966 when the Communist Chinese Red Guards overran the territory (12.3 incident) it has been politically tightly controlled by Beijing.

Pao-hwa Lin, an expert on the Chinese Communist regime, (and himself a PhD graduate in Chinese Communist Party history from the Eastern China Normal University just preceding the Communist years), wrote that "North Korea used Macau as a staging post to traffic drugs, launder money, kidnap, use counterfeit US currency, and even planning terrorist sabotages...". All of that is impossible because Macau has effectively been a "semi-liberated zone" from 1966 up until its formal transfer of sovereignty in 1999. North Korea has "a trading company, several enterprises, and a restaurant" in Macau.

For more details about North Korea's activities through Macau and how China has discreetly allowed this to happen in a city it controls, have a look at this article in Chinese:

http://www.chengmingmag.com/t245/select/245sel04.html

China may not have much choice about NK soon given its sale of nukes to Iran. The Chinese can either watch us destroy the NK state and force its reunification with the South, complete with millions of refugees surging into China and the South, or they can take it over themselves.

We won't need nukes to do it. Precision-guided munitions and pressure-activated sea mines can in a week irretrievably wreck what little transportation infrastructure NK has left. The place just has too many mountains and rivers.