North Korea is China's problem. By Anne Applebaum - Slate Magazine:

"For not only is China the country with the most influence over North Korea, China also is, along with South Korea and Japan, one of the countries most under threat from North Korean nukes. After all, it is China, not the United States, that will be at the center of the new Asian arms race if Japan and South Korea feel compelled to get the bomb. It is China, not the United States, that would feel the effects of fallout if North Korea actually used its weapons. "

The model to consider is the Soviet Union and the possible empty shell that is North Korea. She's right, if the U.S. were willing to pay for space in China to house 500,000 north Koreans right now, you'd probably end the crisis right now. The army is getting smaller, literally, and other than those conventional forces, North Korea could fall to pieces with a small incursion. I'm certainly not saying that we go rto war, but I do think the refugee bomb is an elegant solution. S. Korea and Japan would chip in some money. They do have the most to lose.

China though has some other issues that it must deal with. The refugee problem isonly the first one. The other thing is what to do with a collapsed North Korea? They would have to outlay the money and troops to keep order. If the Chinese played their cards right they could come out graduating from regional power to world leader status by defusing this crisis. This would put them ahead of New Delhi in Tokyo, Seoul and Washington. The Russians should start to worry. Those Siberian oil wells are much closer to Beijing than Moscow.