Audio Transcript:

The US and South Korea will begin joint naval exercises this weekend to send a message to North Korea that further aggression will have serious consequences. The claim refers to the March sinking of a South Korean warship by North Korea. China is not happy about the war games, saying it will increase tension in the area. Anchor Marco Werman speaks with Orville Schell of the Center on US-China Relations at the Asia Society, about China's reaction.

MARCO WERMAN: Orville Schell directs the Center on US-China Relations at the Asia Society. He says this weekend's joint US-South Korea military exercises rattle China because Beijing thinks they challenge Chinese sovereignty.

ORVILLE SCHELL: More and more now they're imagining that they're sphere of kind of legitimate national security interest extends farther and farther out from China itself. And this is partially because China is so dependent on sources of energy from all around the world. So suddenly not only their territorial waters, but their special economic sphere waters which extend out 200 miles, are now viewed by them as being essentially theirs.

WERMAN: You once said about North Korea that for China it's like having a crazy uncle who lives up in the attic. Why does Beijing walk such a fine line when it comes to North Korea?

SCHELL: When you take to people in China, diplomats included, about North Korea you almost invariably get a sense of only thinly disguised contempt. They don't particularly like North Korea, but North Korea is there right across the border from them and China is, despite all its revolutionary pretensions in the past, is a deeply conservative society that really depends heavily on the status quo. And they don't want to have North Korea destabilize so that refugees pour across the border or that perhaps even worse that South Korea, as in when Germany reunified, suddenly is up on the Yalu river one mile or so from Manchuria.

WERMAN: Do you think it's possible that maybe Beijing has very little sway over North Korea and its leader Kim Jong-Il at the end of the day?

SCHELL: I think they have far less sway than we imagine. On the other hand, I think China does not want to see Korea acquire nuclear weapons. But their constant question is what's the trade-off between benefit and risk in more pressure? What would pressure actually accomplish?

WERMAN: Is there a proverbial tipping point to all of this? I mean at what point does North Korea's bad behavior start to cross the line with China and get them to do something about it?

SCHELL: Well, you would have thought that the sinking of the Cheonan, the ship that the North Korean's evidently, although we're not quite sure, torpedoed, would have been such a line. But evidently not. They're still trying to walk that very delicate line between pushing North Korea too hard and seeming to be too much in the appeasement mode.

WERMAN: Will there be blowback, do you think, for the United States and China because of these exercises?

SCHELL: China seems to be quite resistant to the idea of these new naval exercises with South Korea. But, on the other hand, China's very realistic and I think they will accommodate, they do understand why this is so. We just have to sort of slowly feel our way and I think both sides have done a pretty good job lately, US and China, in sort of accommodating in ways that don't completely derail the relationship or create a new crisis.

WERMAN: Orville Schell, director of the Center on US-China Relations at the Asia Society. Great to have you on the show again. Thank you.

SCHELL: Pleasure.