North Korea’s shelling of Yeonpyeong Island in the Yellow Sea is the third such incident since last November. Then, the North Koreans exchanged gunfire with South Korean naval forces resulting in two North Korean deaths. The second was North Korea’s sinking of the South Korean destroyer Cheonan in March.

As you read this, the USS George Washington and its battle group are conducting exercises with South Korean forces in the southern Yellow Sea, not too far from Yeonpyeong Island. Both North Korea and China have condemned the exercises. China is pushing for a high-level meeting of the parties to the “Six-Party Talks” — the U.S., Japan, both Koreas, and Russia — to ease tensions in the area. But those talks are aimed at North Korea’s nuclear program and have nothing to do with their attacks in the southern Yellow Sea.

The Yellow Sea is China’s Caribbean: it claims a 200-mile exclusive economic zone that almost reaches Yeonpyeong Island, very near the area in which the naval exercises are taking place. China is North Korea’s biggest ally and trading partner. We often say that North Korea is under China’s control, and that its aggressive acts couldn’t be undertaken without Chinese acquiescence or agreement. But it’s not at all clear that China — which clearly has enormous leverage over the impoverished North Koreans — has that level of day-to-day control of North Korea’s acts.

Calling North Korea impoverished is both a great understatement and a misstatement. My favorite picture of the Korean Peninsula was taken by a U.S. spy satellite on one night in early 2006. It shows South Korea ablaze with lights in every city and town. In the North, only the capital of Pyongyang is lit. The rest of the country is pitch black. Most North Koreans live cold, hungry, and in the dark, but their government lives well.

So far, China is apparently trying to calm the situation. While North Korea’s press blares more threats, China’s Xinhua News Agency is publishing rather bland stories about the incident and the U.S.-South Korea military exercises.

If North Korea wanted war, it could restart the Korean War in a matter of minutes by attacking with missiles or other forces across the demilitarized zone. If it sought only to provoke South Korea and America, it could mount a smaller attack off its east coast.

But the fact that the three incidents in the last year all took place in the Yellow Sea means that the three attacks are meant to draw China in as well. If the Chinese knew of the incidents before they took place and approved North Korea’s actions, the Chinese would be extending their protective military umbrella over North Korea’s provocations.

So what does North Korea want? And how should we and South Korea respond to its latest act of murderous aggression?

North Korea has accomplished much of what it wanted. It waited eight months after sinking the Cheonan for a response from South Korea, and didn’t see one. By the latest attack, North Korea has already brought about the resignation of South Korea’s defense minister and may have destabilized the South Korean government. Massive protests in Seoul by South Korean military veterans have demanded a forceful response, and at least one South Korean general has vowed revenge.

South Korea has already had one prime minister fall this year, and the new P.M., Lee Myung-bak, is perched precariously on his seat. And the effects of the latest attack are being felt in Tokyo. Japanese Prime Minister Naoto Kan has ordered his cabinet to remain in Tokyo for the next several days, anticipating a greater crisis.

What to do?

First, the United States should restore North Korea to its proper place as a nation designated as a state sponsor of terrorism. This would effectively interfere with — and probably interdict — most financial transactions with North Korea. Given North Korea’s proliferation activities — including construction of the Syrian nuclear plant that Israeli jets destroyed three years ago — there’s more than enough justification for that action.

The Bush administration lifted the designation as an incentive to North Korea in the Six-Party Talks. But those talks — like the negotiations we’ve had with North Korea off and on for about fifteen years — are an abject failure. There is no agreement we’ve made — or will ever make — with North Korea that they will abide by. Every time we receive their blood oaths to stop nuclear development and proliferation, the North Koreans proceed at full speed doing their best to conceal their actions.

Second, we should reject China’s call for urgent consultations of the Six Party Talks participants, instead convening a meeting of a core group of the nations that are a party to the Proliferation Security Initiative. The PSI, begun in 2003, is aimed at enforcement of proliferation bans on nuclear and other weapons of mass destruction. It proved its worth several times, intercepting — in one case — the shipment of nuclear materials to Libya, which precipitated Libya’s surrender of its nuclear program to the United States. The PSI began with sixteen nations and has grown to ninety, an impossibly unproductive number. Let’s start with a small group of six or seven and call it “PSI-Korea.”

The PSI-Korea group should be called together to create and implement a plan of action designed for the sole purpose of preventing any further shipment of nuclear or missile materials from North Korea to any nation or group.

Third, and not last in importance, we should urge a regional alliance with Japan and South Korea to help them defend themselves — and each other — against further North Korean aggression. This would be a big step for Japan, but a necessary one because a re-armed Japan — capable of ballistic missile defense and other measures — would be a necessary predicate to any such agreement. Were Japan to grow in military strength, North Korea would be more effectively contained.

Will the Obama administration do any of this? Almost certainly not. Which will leave North Korea undeterred. It is probably the most dangerously unpredictable country in the world. And its next act of aggression — and there will be one — may result in a South Korean response that will kick off the Second Korean War.