Now that North Korea has conducted a nuclear test, and now that China and North Korea are actually upset about it, what is the appropriate policy response?

First, let's acknowledge that a military strategy is not terribly viable. I suspect that North Korea's military, as in other communist societies, is not quite as fearsome as defense analysts assert. This suspicion includes whether their nuclear test was really as successful as they claimed. That said, I have every confidence that the DPRK could rain a hellfire of conventional missiles and artillery shells upon Seoul -- so there's no point going there.

When it comes to sanctions, the Guardian's Ewen MacAskill suggests that the UN Security Council will be reluctant to go all-out because it's haunted by the Iraq sanctions:

Negotiations between the council members will centre on a draft resolution prepared by the US that sets out punitive measures including a trade ban on military and luxury items, authorising the inspection of all cargo entering or leaving the country, and freezing assets connected with its weapons programmes. Mr Bolton last night distributed the document listing a broad range of sanctions.

The measures, some of the most restrictive in years, also included the banning of trade in any materials that could be used to make or deliver weapons of mass destruction. The document says the US wants the resolution to fall under chapter seven of the UN charter, which deals explicitly with threats to international peace and security.

But it will be difficult for the security council to find effective sanctions that will put pressure on the North Korean leadership while avoiding further punishing a population already close to the breadline in many regions. And if North Korea's leader, Kim Jong-il, has decided that possession of a nuclear weapon is more important than ties with the outside world, that may be a fact the world will have to live with.

Perhaps too powerful -- a point that Aditya Tiwathia raises ove at Passport:

So what can be done? Deepening its isolation, as Ian Bremmer points out in his book, The J-Curve, only shores up the regime. Even if sanctions succeed in regime collapse, that's the last thing that neighbors China and South Korea want. As Ivo H. Daalder points out, this would flood them with millions of destitute refugees and destabilize the region. That explains their minimal enthusiasm for Washington's hardline approach in the six-party talks.

....US policy needs to start reflecting this North Korean calculus and the fact that regime collapse is not necessarily the best outcome.

So, how to get China and South Korea to favor regime colapse? Ralph Cossa makes some good suggestions in the International Herald-Tribune:

Beijing should also note that economic sanctions imposed as a result of a nuclear test will be accompanied by an "open border" policy and the establishment of UN-sponsored refugee camps on the Chinese side of the Yalu River. China, at North Korea's insistence, presently forces most refugees to return, where they meet a most unpleasant fate. This policy must change.

Neighboring Russia and Mongolia can also provide safe havens and South Korea (along with the United States, Japan, and others) should be prepared to support refugee relocation.