This article analyzes the situation in Korean peninsula, it’s historical background and possible solutions. Sheds light on the true effects of economic sanctions, being repeatedly imposed by U.N. Security Council. Brings into focus the the related issues of balance of power, global interests and concerns. Balances the equation between U.S., China, North Korea and Japan. Evaluates, in detail, the role of China and it’s causes. Part played by ideological conficts and post Korean war tensions, is discussed, too.