China seethes on sidelines amid latest North Korea crisis

BEIJING (Reuters) - Angered as the United States and its allies ignore Chinese calls to calm tensions over North Korea, and distracted by domestic concerns, China is largely sitting out the latest crisis with nuclear-armed Pyongyang.

While a conflict on the Korean peninsula would affect China, and in worst-case scenarios unleash a radioactive cloud or waves of refugees into its northeast, Beijing has kept a low profile as tension has escalated in recent days.

North Korea dismissed on Thursday warnings by U.S. President Donald Trump that it would face "fire and fury" if it threatened the United States as a "load of nonsense", and outlined plans for a missile strike near the Pacific territory of Guam.

China, whose regular daily foreign ministry press briefings are suspended for a two week summer holiday, has said little in public about the situation this week, reiterating its usual calls for calm and restraint.

President Xi Jinping has been out of the public eye for more than a week, likely because he is at a secretive Communist Party conclave in the seaside resort of Beidaihe preparing for a key party congress in the autumn, diplomats say.

One Beijing-based Asian diplomat said China was also distracted by a protracted border dispute with India.

"China has different priorities and it's clear what they are," said the diplomat, speaking on condition of anonymity.

State media has as usual called for dialogue to end the crisis, but has also lambasted the United States and its allies for doing little to damp down the flames.

The official Xinhua news agency on Thursday accused Japan of "fishing in troubled waters", using North Korea as an excuse for its own remilitarization. Japan issued a defense white paper this week that warned it was possible that North Korea had already developed nuclear warheads.

Also Thursday, the influential Chinese tabloid Global Times said Washington "only wants to heighten the sanctions and military threats against Pyongyang".

MAD OVER THAAD

Seoul has fared little better, with China directing anger its way over South Korea's deployment of the Terminal High Altitude Area Defense (THAAD) anti-missile system. Beijing says THAAD threatens its own security, fearing that its powerful radar will see far into China, and will do nothing to bring North Korea back to talks.

"China is not too worried that the United States might suddenly attack North Korea. It is worried about THAAD," said Sun Zhe, co-director of the China Initiative of Columbia University's School of International and Public Affairs.

China remains North Korea's most important ally and trading partner, despite Beijing's anger at Pyongyang's missile and nuclear programs.

China has signed up for tough United Nations sanctions that were agreed on Saturday and says it is committed to enforcing them.

Yet Beijing has been upset by complaints from Washington and Tokyo it is not doing enough to rein in North Korea. The foreign ministry last month called for an end to what it termed the "China responsibility theory".

China also believes its influence over North Korea, whose relationship China used to describe as "close as lips and teeth," is limited.

"China has never 'owned' North Korea, and North Korea has never listened to China's suggestions," said Zhang Liangui, a North Korea expert at China's Central Party School, which trains rising officials.

"Neither North Korea nor the United States listens to China. They're too busy heading down the path to a military clash. There's not much China can do. China can't stop North Korea and it can't stop the United States."

China's recent relationship with North Korea soured around 2013 as Pyongyang stepped up its missile and nuclear programs, rejecting Chinese efforts to engage the country economically and encourage it to open up.

Chinese officials have for years doubted the efficacy of sanctions, although Foreign Minister Wang Yi said this week that they were needed. However, he said the final aim should be to resolve the issue via talks as only that would ensure lasting peace and stability.

Wang Dong, associate professor of international studies at the elite Peking University, said China had tried hard to prevent the situation from getting out of control. He also said Trump's domestic problems could play into the current crisis, referring to the U.S. investigation into possible Russian meddling in last year's presidential election.

"When facing increasingly difficult domestic problems, Trump might have an increasing incentive to do something. Maybe he initially would want a limited military conflict," Wang said. "So people are certainly worried about that."

(Editing by Philip McClellan)