Chinese Premier Wen Jiabao told South Korea’s President Lee Myung-bak on Friday he condemned acts threatening stability on the Korean Peninsula and understood South Korean grief over the sinking of a naval ship, which Seoul has blamed on the North.

The Chinese leader is on a three-day visit to South Korea, whose deepening standoff with North Korea is straining China’s efforts to stay friendly with both sides of the divided peninsula and keep out of the fray over the sinking of the corvette Cheonan in late March.

Seoul is convinced North Korea torpedoed the Cheonan and, with the United States and Japan, has urged Beijing to join denunciation of the sinking, which killed 46 sailors.

Wen held to China’s position of avoiding blaming its partner North Korea. But he also told South Korea’s Lee Beijing would not “harbour” anyone responsible once China had made its own “fair and objective judgment on who’s at fault”, South Korean official Lee Dong-kwan told reporters.

“China always opposes and condemns any acts detrimental to peace and stability on the peninsula,” Wen told Lee, according to China’s official Xinhua news agency.

“Wen said that as a responsible country, China takes serious note of the results of a joint investigation by South Korea and other countries, as well as the reactions of all parties,” reported Xinhua.

“I understand the grief of the Korean people, especially the family members of those who died,” said Wen.

ON THE BACK FOOT

Wen’s comments reflected China’s efforts to avoid entanglement in the crisis while seeking to dispel regional worries that Beijing is dismissing South Korea’s complaints and protecting Pyongyang.

“China feels it’s on the back foot and has to find a more active posture on the Cheonan incident,” said Zhang Liangui, an expert on North Korea at the Central Party School, a training school for officials in Beijing.

“It’s difficult even for China to influence North Korea’s behaviour. But China will also hope that South Korea steps back so that confrontation can cool down,” he said.

North Korea has said it will rip up military agreements with the South guaranteeing safety of cross-border exchanges, and has reportedly put its military on combat readiness, after Seoul said it would ban trade with the North and stop its commercial ships using South Korean waters following the sinking.

The mounting antagonism between the two Koreas has unnerved investors, worried the confrontation could erupt into conflict. Many analysts say that neither side is ready to go to war but warn there could be more skirmishes, especially along their disputed sea border off the west coast.

Beijing has resisted turning on North Korea publicly, whose leader Kim Jong-il visited China early this month in a show of friendship between the two communist neighbours.

U.S. officials have said Wen may use his visit to South Korea, including a weekend three-nation summit with Japan’s Prime Minister Yukio Hatoyama, to spell out how China wants to deal with the confrontation at its northeastern doorstep.

Japan will toughen sanctions against North Korea, the top government spokesman, Chief Cabinet Secretary Hirofumi Hirano, said on Friday.

Wen told South Korea’s Lee that “all concerned parties should take a long-term perspective,” said Xinhua.

CHINA UNLIKELY TO CHANGE STANCE

U.S. officials said this week there were signs China, the North’s main benefactor and ally, is reviewing ties with the isolated state.

But South Korean officials doubted Beijing would side with them when Seoul takes the North to the United Nations Security Council over the sinking.

A senior South Korean official said that ultimately Beijing was likely to abstain from a vote on the ship sinking, rather than an outright veto of any statement or resolution directed at North Korea. Wei Zhijiang, a Chinese expert on Korea, agreed.

“I personally do not think that Wen’s visit (to South Korea) will mark a fundamental change in China’s position on the Cheonan incident,” said Wei, a professor at Zhongshan University in southern China who is now a visiting scholar in Tokyo.

“China has its own strategic stake in the Korean Peninsula, and if North Korea is further isolated or sanctioned that would escalate tensions and risk serious instability,” he said.

North Korea has escalated blistering rhetoric since the release of the South Korean investigations’ findings into the warship sinking, threatening to sever all ties with the South.

On Thursday, the North said it was taking the first steps in severing the border link which provides access for South Korean workers to the Kaesong factory park project — the last major commercial link that had been a symbol of reconciliation.

(Additional reporting by Jonathan Thatcher in SEOUL and Huang Yan in BEIJING; Editing by Paul Tait)