The Chinese government has issued a statement strongly condemning North Korea's nuclear test. Pyongyang, said China, "ignored universal opposition of the international community and flagrantly conducted the nuclear test Oct. 9. The Chinese government is resolutely opposed to it." China has made its dissatisfaction with the test very clear. Beijing was one of the first governments to issue its condemnation, having been given a 20-minute warning before the test, and therefore having been prepared to make a statement. Notably, the Chinese statement did not refrain from offending North Korean sensibilities. Though Beijing has several times goaded North Korea into carrying out "provocative" acts or making threatening statements, China finds North Korea's test far from acceptable. Beijing likes having North Korea as a dog on a leash, allowing it to bark and throwing it a bone if it barks a bit too much. But this time, the dog has apparently broken its chain. For China, the benefits of serving as the only viable arbiter of U.S.-North Korean negotiations have been swept away. There is no longer a negotiation. North Korea has crossed the line, and tested a nuclear device. Now, preliminary indications are that the test was very small. Initial Chinese unofficial estimates put the size of the explosion at around the equivalent of 300 or so tons of TNT. This is not far from later international estimates of around 550 tons. Neither suggests a spectacular success — unless Pyongyang has surpassed everyone's expectations and created a highly advanced and very small tactical nuclear device, which is highly unlikely. China has been somewhat reassured at the small size of the test, as it may indicate North Korea is far from being an imminent threat, and therefore Beijing could assist in efforts to constrain the international response. For China, a military conflagration in North Korea is a nightmare scenario. Beijing already has moved additional forces to the Chinese-North Korean border to help seal off any potential North Korean refugee flow if hostilities break out. China's officials, though, have many other issues to deal with, not the least of which is the economic friction inside China. (The top leadership was meeting to deal with internal Party corruption and social stability even as North Korea was carrying out its nuclear test.) With the economic problems at home, Beijing has tried its hardest to play nice with the United States to keep U.S. pressure to a minimum. This has led Beijing to make comments and take actions North Korea sees as inimical to its own interests. Pyongyang has grown steadily distrustful of Beijing, and Beijing has steadily lost influence — and patience — with Pyongyang. North Korea's nuclear test now brings Beijing's failure to restrain its neighbor clearly into the spotlight. Beijing's limited capabilities to influence Pyongyang are exposed, and China loses some of the leverage it had with the United States. It also has the potential for a collapsing regime on its doorstep, or even a war. The Chinese response to Pyongyang's test presents challenges to Beijing as well. A military strike is untenable — as it would create a U.S. war on the Chinese border. Even if it only causes the collapse of the regime (an unlikely scenario), it triggers a flood of refugees across the Chinese border. And then there is the question of North Korea's conventional and unconventional arsenal. A fragmenting North Korea becomes an illicit arms bazaar to the highest bidder — and the flow of weapons and ammunition into China could trigger even more problems for Beijing. Sanctions also risk causing a collapse scenario. China wants to tighten its grip on North Korea, but doing so by cutting off food and fuel is counterproductive. North Korea is used to privations; the international community's isolation of the North Korean regime is proof enough in the closed society that leader Kim Jong Il was right to test a nuke, and the North Koreans will rally together to weather the hardships brought on by sanctions. But the northern North Korean regions are where Pyongyang already sends its undesirable and untrustworthy citizens. They will not rally around Pyongyang, nor will they accept the economic hardships. Instead, they will move to China. China, however, is not prepared to deal with this refugee flow. For China, then, there are few good options. It has lost the North Korea lever with the United States. Military action is out of the question. Increased sanctions could trigger the flow of refugees and potentially even arms across the border (there are anecdotal reports already that North Korean officials try to sell paintings and antiquities in China; shifting to guns is not a great stretch if there are no other sources of revenue). And China has not yet established the relations to trigger a coup or government change in North Korea — and is not willing to risk it at this time. China's main concern is its own internal troubles, and it really did not want to have to deal with a significant escalation in the North Korean situation. That, however, is just what it got. Beijing will condemn North Korea, and could even temporarily cut off fuel or food, but it will focus on calls for international restraint and urge North Korea to come and talk. And Pyongyang will respond that it will talk only if it is recognized as a nuclear power. North Korea is prepared for isolation for the next two years, and China has little leverage to alter that view. China is now stuck between North Korea and the United States, and in fact lacks the levers to significantly alter either side's position. North Korea will demand recognition as a nuclear power. The United States will demand North Korea dismantle its nuclear capability. For now there is no middle ground.