North Korea's declaration that it has nuclear weapons is bad news not just for the United States, but for China. Already sharing borders with nuclear-armed Russia, India, and Pakistan, the last thing China wants is an expansion of Asia's nuclear neighborhood.
China's leaders must now decide how far they are willing to go to put the nuclear genie back in the bottle in North Korea. China has significant leverage, because it supplies much of the fuel and food that North Korea needs to survive and is the North's major trading partner and closest ally.
China's policy toward North Korea's nuclear program has long been based on two principles: that the Korean peninsula must be free of nuclear weapons, and that the dispute over the North's nuclear policies must be resolved peacefully.
The six-party talks involving China, the US, North and South Korea, Japan, and Russia hold the only hope of achieving both aims.
But if North Korea's withdrawal from the talks stands, or if a resumption of the talks ultimately fails to persuade the North to give up nuclear weapons, China will be forced to make a tough choice about which of its two principles is more important.
Each path is fraught with peril.
For Beijing, the strategic stakes involved with North Korea going nuclear are extremely high. A nuclear-armed North could produce a cascade effect, leading South Korea, Japan, and even Taiwan to consider developing nuclear weapons programs in response. More nuclear powers would make East Asia less stable. With Japan's bloody invasion of China during World War II an ever-present memory for many Chinese, a nuclear Japan would be a particularly threatening outcome for China.
Moreover, the Chinese know that if North and South Korea eventually reunited, the resulting country would eventually become a powerful force in the region that would decide its own geopolitical destiny. China would like to prevent that future country from having nuclear weapons.
China also wants to stand shoulder to shoulder with the US when it can.
China's strategy for growing its own economy is heavily dependent on a strong American relationship, both economically and politically. Leaders of China's Communist Party know that a strong domestic economy is what allows them to retain power.
For all these reasons, China may decide to align with those in the US and Japan who insist that the only way to solve the nuclear weapons crisis is to put the economic squeeze on Kim Jong Il's North Korean regime.
But if China were to cut off food and fuel shipments, the North's economy would be crippled and its government might even collapse. The resulting situation could be very destabilizing for China.
For example, a Chinese economic cutoff of North Korea could create a flood of refugees, perhaps numbering in the millions, streaming across the 880-mile North Korean-Chinese border.
If China lets the refugees in, they would pour into an area of Northeast China already very poor and the site of frequent worker protests.
If Chinese security forces used violence to stop the Korean refugees from entering, it would deal a serious blow to the image Beijing is carefully crafting as a peaceful and cooperative member of the world community - and the host of the 2008 Olympics.
But there are also grave dangers for China if it refuses to apply economic pressure and pushes instead for gradual change in the North.
Economic sanctions against North Korea can have a major effect only with Chinese participation. So if America advocates sanctions and China refuses to join in, US-Chinese relations would suffer.
In virtually every discussion of the US-China relationship, American and Chinese officials and analysts hold up the close cooperation on North Korea's nuclear program as proof China and the US can work cooperatively as partners in an area of mutual security concern.
China's choice could spell the end of that cooperation and could have a ripple effect in the relationship - empowering those, for example, who advocate economic measures against China to rectify the trade imbalance.
China would like to avoid such tensions in the relationship with its second-largest trading partner - and the country that has more say than any other about many aspects of its security.
Though they have been on different sides in the past, the US and China have a mutual interest in a nonnuclear and stable Korean Peninsula.
It is this mutual interest that could prompt the two nations to work closely together to get North Korea to return to the negotiating table and eventually give up nuclear weapons. China and the US would both be winners with that outcome.
• Nina Hachigian is director of the Center for Asia Pacific Policy at the nonprofit RAND Corporation, which seeks solutions to world problems.