Leading article: A landscape of limited options

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The warning yesterday by the US Secretary of State, Hillary Clinton, about the "highly precarious" situation on and around the Korean peninsula is, if anything, an understatement. However strident the outrage in Pyongyang, last week's report by international investigators must banish all reasonable doubt that it was indeed a North Korean torpedo that sank a South Korean warship last March, killing 46 South Korean sailors.

As usual, the North's motives may only be guessed at. Perhaps the attack was calculated revenge for an earlier skirmish between patrol boats from the two countries close to the disputed maritime border between them, in which the North came off distinctly second best. It could have been intended to demonstrate that the ailing Kim Jong-il is still in firm control. Or it may simply be another example of Pyongyang's desire to show that whatever its economic and political weakness, it cannot be ignored.

But two things are certain. First, the options of South Korea and its key ally the US are extremely limited. Military retaliation might well lead to full-scale war on the peninsula, now involving a nuclear-armed North Korea. As for action at the United Nations, even if new sanctions could be agreed, they would probably have little effect. Meanwhile, Seoul's decision to halt inter-Korean trade, restrict North Korea's use of its sea lanes and resume "psychological warfare" against its northern neighbour, are probably the sternest response it could have taken, short of war. But these measures too will not force the North to change its ways.

And this leads to the second certainty – that in this crisis, as in previous ones over Pyongyang's nuclear and missile programmes, the only country with genuine leverage is China, North Korea's largest trading partner and most important diplomatic protector. In the past, Beijing has balked at tough action to punish North Korea, and this time will probably be no different, despite the intense international pressure to do so, and the risks to China's relationship with the US.

It was telling that Mrs Clinton was speaking in Beijing, during the most extensive high level economic and security talks between the two countries in years. Vital issues are at stake, from currency and trade policies to the problem of Iran. But on North Korea, China's calculation cannot have changed. From Beijing's viewpoint, better the highly precarious status quo than an even more unstable North Korea on its border, or – worse still – a democratic reunited Korea, allied to the US.

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