This article elaborates on China’s position and policy toward the North Korean nuclear issues, especially Beijing’s perception and role of solving the nuclear crisis in Korean peninsula since the October 2002. Although changing the traditional “lips-to-teeth” relationship between China and North Korea, China is the world’s last remaining major country which still has the influence over North Korea. To solve the second nuclear crisis in Korean peninsula, Chinese government emphasizes following three principles: first, maintenance of peace and stability in the Korean peninsula; second, realization of denuclearization of the Korean peninsula; third, peaceful settlement of the North Korean nuclear crisis through the dialogue between the related nations. China has played a decisive role in persuading Pyongyang to participate in the six party talks last August and again in convincing North Korea to consider Washington’s offer of multilateral security assurances. The U.S. and China share the objective of eliminating North Korea’s nuclear weapons program but Beijing remains unwilling to cooperate with the United States to achieve this objective through reliance on coercive measures that would destabilized North Korea. In dealing with Pyongyang, China is uniquely positioned to exert its influence. Bejing’s willingness to assume an active diplomatic role has been welcomed by United States and has provided a substantial boost to Sino-American ties.