DANDONG, China (Reuters) - It is at China’s main border post with North Korea where Beijing’s fraught dilemma over how to keep its unpredictable neighbor in check is best encapsulated.

North Korean soldiers walks on a bund from the North Korean side of the Yalu River, as a Chinese boat sails by with tourists, near Sinuiju in North Korea and Dandong in China's Liaoning Province, April 13, 2017. REUTERS/Aly Song

The diplomatically isolated North is almost entirely dependent on trade with China to prop up its impoverished economy, and about three quarters of that trade flows across the winding Yalu River to Dandong, a sleepy port city in China’s north-eastern Liaoning province.

At Lazigou, a small village less than an hour’s drive from Dandong, the Yalu’s tributaries narrow to just dozens of meters (yards), making the area conducive to casual interaction and even informal commercial transactions.

During a visit to Lazigou on Friday, Reuters journalists saw a Chinese restaurant owner paddling over the river in a small fishing boat, reaching the other side in a matter of seconds. He purchased a goat from a waiting North Korean soldier before returning swiftly.

Meanwhile, another North Korean, a civilian, had waded halfway across, collecting mussels along the river’s floor.

“If war does break out, North Koreans could just swim straight across here,” said the restaurant owner, who only gave his last name, Wang.

Despite widespread poverty, relatively few North Koreans defect across the Chinese border during times of relative stability due to the difficulty of bypassing surveillance and armed border guards, the repercussions for family members left behind, as well as the risk of being returned by Chinese authorities.

“It all depends on the political situation there,” said another local resident. “If I was them, I’d be the first one to run if North Korea falls.”

This is the worry for China. It opposes Pyongyang’s pursuit of nuclear weapons and ballistic missiles and has signed up to tough United Nations sanctions slapped on North Korea.

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But it has long been wary of pushing too hard, for fear it could trigger a regime collapse, sending millions of North Koreans surging across the border seeking refuge, while potentially removing a geographic buffer between China and South Korea, a U.S. ally.

Tensions over North Korea have heightened this week. The North may conduct a sixth nuclear test to mark Saturday’s 105th anniversary of the birth of state founder Kim Il Sung, the grandfather of the current leader.

U.S. President Donald Trump has sent an aircraft carrier group to the region as a show of force and threatened unilateral action in response, drawing furious threats of retaliation from Pyongyang.

“IRREVERSIBLE AND UNMANAGEABLE”

China said on Friday tension over North Korea had to be stopped from reaching an “irreversible and unmanageable stage” while Japanese media have said the government in Tokyo is also discussing how to cope with a possible flood of North Korean refugees.

China is much closer to the insular state, with which it shares a long land border.

Speedboat tours carrying small groups of Chinese tourists regularly set off from Lazigou’s small jetty into North Korean waters, with tour operators promising an up-close view of North Korean border guards and villages.

Tour operators offer small bags of bread and biscuits for sale, which tourists can throw onto the shore for border guards and children to eat.

“Some tourists treat it like going to the zoo,” one tour guide said.

Despite the tension, the mood in Dandong has remained relaxed, with no obvious signs of increased Chinese security or military presence along the border, which is fortified by vast stretches of wire fences.

The region typically has a lighter security presence than the more porous border along the Tumen River, further north in Jilin province, where most of China’s border military presence is concentrated.

On Friday, celebrations to mark Kim Il Sung’s birth anniversary were held at a cultural center in Dandong, attended by the city’s senior Communist Party officials and North Korean envoys from Pyongyang, as well as from its diplomatic missions in Beijing and other Chinese cities.

“China and North Korea are brothers through thick and thin,” said one Chinese attendee. “You can say there are tensions now but it’s like fish and water, it’s an inseparable relationship.”