Chinese envoys at the UN in New York are preparing to face an emergency session of the Security Council amid rising international condemnation after its ally unleashed a fatal barrage on the South Korean island of Yongpyeong that left Beijing suffering collateral damage. Two marines were killed and 20 others injured, including three civilians, after 200 North Korean shells landed near a military base on the island. South Korea fired 80 rounds into North Korea in return but it is not known if anyone was killed. It was one of the heaviest exchanges of fire since the Korean armistice was signed 57 years ago. While the Foreign Ministry expressed concern and urged fresh six-nation talks on North Korea, the US and Russia - China's peers on the council - issued blunter statements. The White House 'strongly condemned' what it described as 'belligerent action' from Pyongyang and Russia's Foreign Minister warned of a 'colossal danger' of tensions degenerating into military conflict. China played a key role in limiting Security Council action following Pyongyang's fatal torpedoing of a South Korean warship in March, but regional diplomats insist any such push will be harder this time. 'The stakes are even higher now,' one South Korean official warned in Seoul. 'We are urging China to act this time and not simply hide behind its ally. We know they must share our outrage and frustration.' Stock markets fell in Hong Kong and across the region amid fears of an escalation - a factor now alarming strategists in South Korea as they plot a further response. While initial international attention is focused on Seoul's reactions, the questions also loom large for Beijing, Pyongyang's sole fraternal and strategic ally. The attack highlights the dangerous game China finds itself in the middle of, in an increasingly dangerous region. Beijing's subdued reaction to the North's torpedoing of the Cheonan in March may have angered many in the region but it confirmed Beijing's determination to keep the status quo - propping up North Korea as a buffer state. It is a status quo built upon the world's most unpredictable state - a Stalinist hermit state closed to the outside world led by a recalcitrant elite that has repeatedly shown it is willing to let its population suffer to keep its grip on power. And when it comes to foreign and security policy, Pyongyang is stubbornly contrarian. The fact that it appears, according to a range of mainland analysts, that Beijing was surprised by the attack shows just how prickly Pyongyang can be, even to its friend. It is, as one US diplomat famously described it, like having a snarling guard dog that, while successful at keeping outsiders from the gate, is prone to biting its owner as well. That status quo will get harder to manage as the tensions rise. If South Korea is stuck in a deadly catch-22 where North Korea will potentially react with escalation no matter what course Seoul selects, then China faces a similar plight. If Beijing's leaders don't condemn its ally hard enough, Pyongyang may keep on the same course of attempting to provoke the South. But if Beijing pushes Pyongyang too hard, it is not difficult to imagine North Korea taking further action against South Korea to annoy Beijing. And neither Beijing or Seoul want to see prolonged fears of imminent escalation or retaliation poison regional and international financial markets. Then there is the rest of the region. Yesterday's attack also comes after a bruising year for China in East Asia as much of the region tilts back towards the US security umbrella as a hedge against the uncertainties underpinning China's rise. Its relationship with North Korea, and the lack of transparency that surrounds it, only serves to deepen those suspicions. 'China's relationship with North Korea is one of the factors pushing Japan, the US and South Korea even closer together,' said Professor Hideshi Takesada, executive director of Japan's National Institute for Defence Studies. 'I expect this trend to continue ... the whole atmosphere is changing and we need to strengthen our discussions.' Even during periods of relative co-operation, such as spells when the six-nation talks on North Korea's nuclear programme were continuing, Beijing would share no intelligence on what they thought of Pyongyang's capabilities or intentions. 'Even when things were humming along, Beijing was a closed shop on that score,' one senior US diplomat said. 'They would organise meetings and push for dialogue and co-operation but as for their relationship with North Korea, that was utterly inviolate. The old cold war shutters would come right down.' The fall-out from the Cheonan sparked extensive South Korean-US naval exercises in the Yellow Sea, causing deep concern in Beijing. Even though Washington insisted it had the right to conduct drills with a treaty ally in international waters, Beijing repeatedly warned against the presence of US aircraft carriers in the Yellow Sea. Former Hong Kong chief executive Tung Chee-hwa was among the state leaders who told Washington to keep aircraft carriers away from the Chinese coast, warning US Pacific Commander Admiral Robert Willard during a private dinner in Hong Kong. While a variety of exercises took place, the Japanese-based carrier USS George Washington was never deployed to the Yellow Sea. Washington, Seoul and Japan can be expected to plot a further array of military exercises in the wake of yesterday's attack, both as a show of force and to ensure contingencies and preparations are kept as fresh as possible. And, given rising tensions, aircraft carriers may well be involved - causing further troubles for Beijing. For all its unpredictability, Kim Jong-il's regime has shown an unerring eye for weaknesses in its neighbours. Its decision in October 2006 to test its first nuclear weapon may have flouted international norms yet it possessed a cold political logic. For all the talk that Pyongyang must not be rewarded for its bad behaviour, the six-party talks appeared to be close to doing just that, offering the prospect of aid, economic engagement and normalisation in return for a scrapping of its weapons and programme. Yet yesterday's events are a jarring reminder that Pyongyang doesn't need nuclear weapons to spook its neighbours. The artillery pieces fired are part of a vast network of an estimated 30,000 amassed along its border with the South. Hidden in bunkers and manoeuvred along underground tracks, they could do a great deal of damage to Seoul, just 70 kilometres away, before being successfully silenced in any conflict.