In late March an explosion sunk a South Korean warship in the Yellow Sea. After his government downplayed the likelihood of North Korean involvement, the South’s defense minister now says a mine or torpedo might have been involved. A torpedo would mean a North Korean submarine actively targeted Seoul’s aging corvette.

The Republic of Korea’s president, Lee Myung-bak, has attempted to dampen speculation by announcing his intention to “look into the case in a calm manner.” But the possibility that Pyongyang committed a flagrant and bloody act of war has sent tremors through the ROK. Seoul could ill afford not to react strongly, both to protect its international reputation and prevent a domestic political upheaval.

All economic aid to and investment in the North would end. Diplomatic talks would be halted. Prospects for reconvening the Six-Party Talks would disappear.

Moreover, Seoul might feel the need to respond with force. Even if justified, such action would risk a retaliatory spiral. Where it would end no one could say. No one wants to play out that scenario to its ugly conclusion.

The Yellow Sea incident reemphasizes the fact that North Korean irresponsibility could lead to war. Tensions on the Korean peninsula have risen after President Lee ended the ROK’s “Sunshine Policy” — which essentially provided bountiful subsidies irrespective of Pyongyang’s behavior.

Nevertheless, the threat of war seemingly remained low. Thankfully, the prospect of conflict had dramatically diminished over the last couple of decades. After intermittently engaging in bloody terrorist and military provocations, the Democratic People’s Republic of Korea seemed to have largely abandoned direct attacks on South Korea and the United States.

Now we are no longer sure.

Even if the DPRK was not involved in the sinking, only prudence, not principle, prevents the North from engaging in armed instances of brinkmanship. And with Pyongyang in the midst of a leadership transition of undetermined length, where the factions are unclear, different family members could reach for power, and the military might become the final arbiter, the possibility of violence occurring in the North and spilling outward seems real.

Such an outcome would be in no one’s interest, including that of China. So far the People’s Republic of China has taken a largely hands-off attitude towards the North. Beijing has pushed the DPRK to negotiate and backed limited United Nations sanctions. But the PRC has refused to support a potentially economy-wrecking embargo or end its own food and energy subsidies to North Korea.

There are several reasons for China’s stance. At base, Beijing is happier with the status quo than with risking North Korea’s economic stability or the two nations’ political relationship. Washington doesn’t like that judgment. However, changing the PRC’s policy requires convincing Beijing to assess its interest differently. The Yellow Sea incident could help.

Apparently North Korean leader Kim Jong-il is planning to visit China. Speculation is rife about the reason: to request more food aid, promote investment in the North, respond to Beijing’s insistence that the DPRK rejoin the Six-Party Talks or something else?

South Korea should propose its own high level visit to the PRC. The foreign ministers of both nations met in Beijing in mid-March and issued a standard call for resumption of the Six-Party Talks. But the ROK should press further, backed by the United States. Despite China’s preference for avoiding controversy, the status quo is inherently unstable. Doing nothing is worse than attempting to force a change in the North’s nuclear policies or ruling elites.

Even under the best of circumstances there is no certainty about what is likely to occur in North Korea. Politics in Pyongyang resembles succession in the Ottoman court, involving not only varying factions but different family members. A weaker Kim Jong-il is less able to impose his will on the military or hand over power to his youngest son, as he apparently desires.

Although the DPRK’s governing structures so far have proven surprisingly resilient, it’s impossible to ignore the possibility of an implosion, military coup or messy succession fight. If North Korea continues to develop nuclear weapons, its actions could trigger two equally explosive responses: a military attack by the United States or decisions by South Korea and Japan to build nuclear weapons in response.

And the Yellow Sea incident highlights other dangers: it may have been an act of brinkmanship too violent by half or an act of military disobedience designed to sink any prospect of negotiations. Either of these could lead the worst of all outcomes on the peninsula — full-scale war. Then the PRC would face the worst case in virtually every dimension: the end of North Korea, a united ROK allied with Washington on China’s border, mass refugee flows over the Yalu, and conflict, including possibly radiation, spilling over Chinese territory.

None of these is necessarily likely. But all are possible and must be compared by Beijing to the price of confronting the Kim regime. Doing something starts to look like a much better option than standing behind the DPRK, hoping that everything works out.

Admittedly, now might not seem to be the best time to engage China, given the strains in the U.S.-PRC relationship. However, Beijing is unlikely to reconsider its policy unless it believes doing so is in its interest. Irrespective of the state of bilateral U.S.-China relations, the PRC will have to be persuaded to change course.

The South also has a critical role to play in engaging China. The two nations’ economic ties continue to expand. But Beijing also desires to expand its political role while diminishing U.S. influence: that is unlikely to happen so long as South Korea feels threatened by the North and uncertain about China’s willingness to develop a more equal relationship between the two Koreas. Pressing Pyongyang more strongly would provide evidence of the PRC’s commitment to play a more constructive regional role.

Japan, too, should challenge China over the issue. The new government in Tokyo is committed to improving Japan’s relationship with Beijing. As part of that dialogue, Tokyo should point to the dangers posed by North Korean misbehavior to surrounding nations.

Moreover, the potential of military conflict on the peninsula and attacks on Japan have caused greater interest in Japan for adopting a more aggressive foreign policy backed by a larger military. The PRC opposes this new course; resolving the multiple problems of North Korea would be the most effective way to quiet Japanese geopolitical fears.

We must hope that the Yellow Sea sinking was a tragedy rather than a provocation. But even if the former, the incident should remind everyone that the Korean peninsula remains a military tinderbox. It would only take one accident or mistake to trigger full-scale war.

The country that could do the most to reduce the chance of conflict is China. Beijing increasingly expects political influence commensurate with its growing economic strength. Dealing with North Korea provides the PRC with an opportunity to demonstrate the strength of its commitment to peace and stability.