The United States and South Korea are facing new and increasingly dangerous dynamics on the Korean Peninsula. The situation in North Korea underwent an enormous qualitative change over the past three months that heightens the urgency of a potential crisis for the North and could even signal the regime’s eventual undoing.

North Korean Supreme Leader Kim Jung-un’s decision to purge and execute his uncle and quasi-regent Jang Song-thaek and, more significantly, the manner in which he chose to do so have driven dangerous cracks throughout the edifice of North Korean power. The power structure is now more dangerous to its occupants than before, and their behavior is likely to be more threatening to outsiders than in the past. This is because the supreme leader has chosen to demonstrate to his own people the shortcomings of his rule and its system, diminishing his and his regime’s prestige and authority in the vain pursuit of consolidated power.

Douglas H. Paal Paal previously served as vice chairman of JPMorgan Chase International and as unofficial U.S. representative to Taiwan as director of the American Institute in Taiwan. More >

This is occurring in an already-volatile political atmosphere among the three principal players: Japan, China, and South Korea. Meanwhile, the Obama administration is signaling, perhaps unwittingly, that it does not take current trends as seriously as it should. The administration’s attention is elsewhere—and it needs to be brought back to Northeast Asia soon.

Reverberations in North Korea

To look at the internal risks first, it is difficult to overestimate the shock value of the revelations and allegations made concerning Jang Song-thaek and his aides. The list of transgressions is long: factionalism, military-coup planning, sexual misadventures, “blame and shame” offenses such as selling national assets for private gain to an unnamed country that is undoubtedly China. As a trusted intimate of the leading family, how could Jang and his cohort’s crimes have gone unnoticed for so much time? What happened to the Kim family’s brilliance, insight, and infallibility, the virtues of the men of Mount Paektu? Were they duped or excessively indulgent?

It is one thing for the supreme leader to demonstrate his command and desire to have his own close advisers by having Jang quietly slip from view, as when Vice Marshal Ri Yong-ho was purged in 2012 (possibly to have been secretly executed). It is quite another to fill the media with accounts of misbehavior and betrayal at the court of the ruling family, followed by a dramatic execution. As Niccolò Machiavelli explained in The Prince, it is better to be feared than to be loved, but it is necessary never to be hated.

This episode’s diminishment of the Kim family’s claim to enlightened foresight and racial purity may not produce immediate signs of popular or intra-regime disaffection, but it must certainly have eroded the prestige of the young leader. At the very least, it underscored his evident impulsiveness and potential for instability, reminding observers of the price the North Korean people may have to pay to suffer his rule.

China’s Diminished Influence

Turning to the external implications of the affair, Jang’s departure will reduce constraints on Kim Jung-un’s already-unruly management of military and diplomatic activity. Jang’s evident role as the most welcome intermediary with Beijing reportedly also made him the frequent bearer of Beijing’s hard-to-hear admonitions to avoid nuclear-weapon tests, missile and satellite launches, and provocations toward the South.

After Kim indulged in extraordinary public displays of martial bravado in the spring of 2013, even threatening nuclear strikes on the United States, Chinese officials sought to gain credit with Washington for having intervened to calm the situation. Jang appeared to be the preferred messenger for Beijing as the sole senior North Korean official with access to Chinese counterparts.

When North Korean Vice Marshal Choe Ryong-hae, who is known to have grown closer to Kim Jung-un after Jang’s execution, was received by Chinese leader Xi Jinping last year, Choe did not return with the hoped-for invitation from Xi for Kim to visit China and be blessed as the successor. He more likely returned with additional and unwelcome Chinese warnings about the improvements necessary to Kim’s conduct if he is to receive Beijing’s blessing.

Admittedly, these observations stem from the combination of two highly interpretive and inferential art forms—what might be called Pyongyang-ology and Beijing-ology—to draw some conclusions. This can be unreliable. But based on private conversations, I know Beijing was deeply upset that Kim allowed himself to be viewed in 2013 in a mock-up of a control room displaying a screen portraying a missile sending a nuclear weapon to the United States. There was a quality about it that reminded me of the Marx Brothers’ movie Duck Soup, in which the comic actors pretend to be military commanders.

In the near future, similar, less restrained behavior by Kim may not be so funny. This spring, South Korea and the United States will enter into their 2014 round of military exercises. In all likelihood, the exercises will coincide with a fourth North Korean nuclear-weapon test, more long-range missile launches, and tough posturing toward South Korea, with a heightened potential for retaliation by the South. But this time, who will deliver the cautious warnings from China?

I suspect Chinese officials are carefully, even desperately trying to find which doors in Pyongyang are still open to them. Since Jang’s fall, Beijing has been quite visibly nervous in its public pronouncements, urging stability and calm reactions all around even as it privately interprets Kim as threatening the North’s stability. China seems to be struggling to retain its posture of propping up the North’s regime economically and politically while it is implicitly denounced in Pyongyang’s official statements for links to Jang’s misbehavior. Another potential interlocutor, Pyongyang’s ambassador in Beijing, had ties to Jang and may be in an awkward position to help at this point.

Unprepared Regional Actors

What does the increased likelihood of provocations and instability from the North mean in practical policy terms? If Beijing’s influence is at least temporarily diminished, and the internal and external restraints on Kim Jung-un’s behavior are accordingly reduced, then South Korea, the United States, Japan, China, and Russia need to prepare for the rising probability of increased tensions. But looking at the current Northeast Asian political situation offers anything but reassurance.

The region’s leaders from the top down to the working-policy-level officials are shunning each other just as the risk of trouble is increasing. Japanese Prime Minister Shinzo Abe’s visit to the Yasukuni Shrine in December 2013, a nod to Japan’s militaristic past that rankled neighbors and the United States, is but the most recent example of a regional leadership that is ill-prepared to concert its efforts for common security objectives. China’s awkward announcement of an air defense identification zone (ADIZ) over the East China Sea in November was another example.

Initiatives to reduce or deflect tendencies toward conflict are lacking. Japan will not admit it is engaged in a territorial dispute with China over islands in the East China Sea, and China will not relent until Japan at least admits the dispute. Both sides claim they will proceed with caution, but the mechanisms to produce a calm outcome are not up to the task. Even the most basic communication is severely circumscribed.

Both Beijing and Seoul sent cautious signals to Tokyo in December of a desire to find a less contentious path forward, but their efforts were rebuffed by Abe’s visit to the shrine. This has added emotion to their subsequent reactions.

The U.S. government made some efforts to encourage a reduction of regional tensions in Northeast Asia during visits by the secretaries of state and defense and then by Vice President Joe Biden late in 2013. Biden also made a special private appeal to South Korea’s President Park Geun-hye to construct a positive diplomatic path toward Japan. But these efforts were unsuccessful.

Moreover, as stresses are building in North Korea and the means to manage them are decreasing, the Obama administration is more focused on its own domestic politics than a potential regional crisis. It is otherwise hard to explain the transparent lack of diplomatic credentials of the recent ambassadorial appointments to Tokyo and Beijing. In other words, the administration is paying lip service to the need for crisis management rather than fully engaging in diplomacy to match the American and allied interests that are at stake.

Washington’s evident loss of focus on Asia is disappointing given the exceptional start of Obama’s second term, when he invited Xi to attend an unprecedented bilateral summit in California. North Korea was a substantial agenda item at that meeting. But neither the United States nor China is all that interested in direct diplomatic initiatives with Pyongyang. The failure of the 2012 U.S.-North Korean leap day agreement, in which Pyongyang agreed to suspend work at its Yongbyon uranium-enrichment plant and to suspend nuclear and missile tests, and China’s premature efforts to restart the Six-Party Talks in 2013 have depleted energies in both Washington and Beijing.

But diplomatic drift cannot be an option at this stage in North Korea’s succession process, given the heightened risks of provocation and instability. If Kim decides to fly a missile over Japan again, will Tokyo and Seoul be able to coordinate their responses and countermeasures?

If there is a fourth nuclear test, will Washington, Seoul, and Tokyo be able to overcome their recent diplomatic chills to present a united front to Pyongyang and to entice Beijing to take stronger actions in the United Nations Security Council and bilaterally?

If Kim’s elimination of Jang Song-thaek proves not to be a major step in consolidating his power but the beginning of his undoing, will there be competition for influence over a divided North or cooperation?

If constructive answers are to be provided for these scenarios, meticulous groundwork will need to be laid. China, for example, has been reluctant to alienate the North by discussing contingencies for the peninsula with outsiders. Last year, there seemed to be greater willingness to be frank about the challenges, at least in academic circles in China. Now, when the Chinese sense instinctively that Kim is raising the risks to himself and substantially damaging ties with Beijing, it is all the more pressing for responsible officials to have serious discussions about contingencies. China in particular needs to be encouraged not to try to sweeten the bilateral atmosphere with North Korea with more aid and trade but to consider more punitive sanctions targeted at the leadership (not the North Korean people).

Improve Communication

An active agenda of consultations needs to begin now, and freezing these potentially vital talks for nongermane reasons of nationalism and politics should not be acceptable.

The key will be the patient reconstruction of channels of communication among Tokyo, Seoul, Beijing, and Washington. A senior, experienced diplomat might be appointed special envoy to travel among the capitals in a listening-and-sharing mode to counsel restraint but not to negotiate among them, at least not at the outset.

At the highest level, the White House is contemplating a visit by Obama to Japan in April, but plainly the prospects for this being a complete success have been placed in doubt by Abe’s visit to Yasukuni. Whether or not terms can be reached for a fully successful visit to Japan, Obama should definitely find time for a stop in the Republic of Korea. The imperative for such a visit was always present, but now it has been magnified by the qualitative change in the North and the renewed political tensions between Japan and its neighbors. Skipping over the South will be viewed in Korea as a disastrous disregard for the long-standing alliance.

As another early step, the government of Japan needs to be asked to consider how it will compensate for Abe’s recent provocative behavior and work to improve the atmosphere for dialogue. Japan needs to contemplate and plan for initiatives to redress the concerns of its neighbors. And the U.S. president needs help to determine how to address the contradictions in Japan’s policies, discerning the many positive steps, such as increased defense spending, attention to alliance issues, and economic revival, from the negative step of revising history. The United States and South Korea should also offer constructive ideas about how to settle the atmosphere around sensitive historical issues, such as that of “comfort women.”

Japan should reevaluate its diplomatic approach to the territorial dispute over the Senkaku Islands (which China calls the Diaoyu), seeking to preserve its legitimate claims while demonstrating reasonableness in its management. A number of ideas have been floated, such as Kishore Mahbubani’s recommendation that Japan transfer the islands’ ownership to a nature conservancy. Another is to acknowledge that China asserts the territory is disputed, while asserting nonetheless that Japan’s claims and actual administration give it legitimate rights to the islands. Insisting that there is no dispute at all, when even the United States is formally agnostic, is counterproductively rigid.

Japan also needs to tone down its confrontation with South Korea over the Takeshima/Dokdo islets they both claim but that Seoul administers. Tokyo is unnecessarily adding to its difficulties with a key neighbor, economic partner, and fellow democracy.

While waiting for Japan to repair its reputation in the region, it is time for a direct proposal for three-way official talks among Seoul, Washington, and Beijing about how to handle North Korean contingencies, perhaps with Washington offering to catalyze the talks so the other parties will not be forced to make the first move. This should be managed by politically accountable officials and not just trusted intelligence officers, although the latter have a role to play as well.

In these talks, topics related to diplomacy and ultimate cooperation should be kept separate from more sensitive historical issues. This will give freedom to the officials to begin to exchange assurances about their behavior and performance that can be trusted. Issues involving humanitarian relief and disaster assistance will need to stand on their own merits and to be insulated from political emotions. Necessary bilateral and trilateral military exercises will need to be separated from high-profile political agendas, so as to immunize them from start-and-stop impulses. For instance, Japan’s legitimate needs to upgrade its limited military capabilities and their legal authorities in the face of the recent power shift toward China should not be mixed in with allegations of renewed militarism, which ignore the realities of modern Japan.

Restraint will be required with respect to provocative issues such as territorial claims and historical sensitivities. Abe’s visit to the Yasukuni Shrine may have been the result of a calculation that things are already so bad he cannot make them worse. If that was the case, then it could prove to be a terrible miscalculation in light of North Korean developments. History is replete with examples of leaders failing to see how things could get much worse; in the hundredth-anniversary year of the outbreak of World War I, that things might get worse should be obvious.

The leaders of all three regional capitals seem to have a higher tolerance for risk than has been seen in some time. The Chinese leader seems to believe that the cost of not responding toughly to perceived Japanese offenses will be greater than keeping pressure on Tokyo through patrolling its ADIZ and the waters around the Senkaku/Diaoyu Islands. Shinzo Abe seems to believe that the political costs of admitting a dispute exists over the islands would be greater than the wear and tear on Japan’s coast guard and other enforcement arms, and moreover that tension with China serves his broader objectives of constitutional revision and defense modernization. Park Geun-hye appears to believe that any warming of diplomacy with Japan will undermine her support in South Korea.

These considerations may all pale before potential North Korean contingencies that put at risk much greater interests in regional security and stability.

A Focus on China

The overarching imperative is to move to solidify the region’s capacity to respond effectively to North Korean behavior before it is too late. The agenda needs to be both long-term and short-term.

Part of this is avoiding a wasting strategic competition between China and the United States and its allies—the central challenge of the decade. This will entail considerable summitry and self-restraint, as well as bedrock alliance solidarity.

Over the long term, China’s steady modernization of its military and expansion of its capabilities are reshaping the security landscape of the region. Korean and Japanese national defense forces are responding individually, if not symmetrically, to these developments, and their alliances with the United States will be reconfigured to meet new challenges, even as Washington remains committed to its “rebalance” to Asia and modernizes its own capabilities.

China and the United States have reinvigorated military diplomacy since the end of 2012, but there is still a great gap in understanding to fill between the two armed forces. Rules of the road, international norms of behavior, crisis communications, and interpersonal trust mechanisms among the three parties’ armed forces have not really begun to function yet.

More near-term, China will host the Asia-Pacific Economic Cooperation leadership forum in October or November 2014. It is absurd to imagine that in a period of increasing friction over territorial claims and historical animosities, the leaders of China and Japan—Asia’s two largest economies—will not meet and discuss managing their differences. Yet that is the current course.

Time to Take the Initiative

Responsible officials must begin to rebuild normal channels of communication, develop mutual reassurance mechanisms, and find ways to climb down from sensitive territorial disputes in the months ahead. Redlines need to be established and made clear to Pyongyang. Goalposts need to be identified, such as the absolute requirement for the North to take the “pre-steps” necessary to resuming multiparty nuclear talks: ceasing nuclear activities including reprocessing, returning to its 2005 commitments, readmitting International Atomic Energy Administration inspectors, and imposing a moratorium on rocket and nuclear tests. Responsible officials should be deputized and timetables established to stabilize and ultimately normalize the region’s diplomacy.

Four-party cooperation on North Korea among Japan, China, the United States, and the Republic of Korea may not be presently possible, and trilateral talks including China, the United States, and South Korea may take time to get off the ground. In those cases, Seoul and Washington should not hesitate to begin bilateral diplomatic and military planning for possible contingencies.