It's all smoke and mirrors. I bet in five years UN inspectors will go in and find a bunch of medium range missiles marked filled with sawdust and bailing twine.
But, yeah, Beijing'll smack this down if it gets too out of hand. They're willing to let Kim do his song and dance as long as it doesn't really affect them too much. But if he does something to piss them off they retaliate. Remember that special economic zone ol Kimmy wanted to set up to give market capitalism a 'trial run'? The PRCers slammed Yang Bin away faster than a Falun Gong Usenet poster.
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"Look, I'm pretty relaxed for a guy who just lost money on a rave. And who's currently speeding down the highway drunk off my tits. And I'm being chased by someone in a blue Corolla. Woohoo! I just ran a red light!"
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