By breaching an agreement to abandon nuclear weapons, North Korea has greatly undermined its moral standing in the international community.

In this context, its leadership should prepare for long-term international sanctions and continued isolation. Although North Korea is accustomed to these conditions, this nonetheless signals bad news for a country so desperate for development.

Economic focus

It is difficult for the outside world to understand the real economic conditions of North Korea. According to UN statistics, 8.7 million people there are suffering from hunger and malnutrition. Such statistics are underscored by negative reports from the foreign media.

Is North Korea's economy really so terrible? Actually, while people hope the country abandons its nuclear weapons program and opens up to the outside world, its economy is evolving in secret.

Thriving restaurants and shops in the streets of Pyongyang, and television advertisements for beer and restaurants are all signals that economic vitality is increasing in the country.

Nevertheless, neither the statistics nor the street sights offer a complete picture. A diversified economic structure is likely forming in North Korea. But regardless of increases in economic flexibility, North Korea cannot develop in a closed way.

Prohibited weapons Pyongyang delivered to Iran, for example, were confiscated by customs agents at the United Arab Emirates in August—proof that North Korea's relations with the outside world exist, albeit ones the West does not want to see.

North Korea's efforts to expand economic ties with the outside world, however, will be severely restricted by its own nuclear weapons strategy. On August 11, for instance, the United States declared its intent to impose sanctions on North Korea's Kwangson Banking Corp., as a consequence of this strategy.

Moreover, whatever route North Korea takes, it must ease tensions in its foreign relations—especially relations with the United States and South Korea.

Perhaps this is why North Korea recently moved back from a hard-line policy to engaging in dialogue. But we can conclude from its recent diplomatic moves that its focus has been shifted from whether to abandon nuclear weapons to safeguarding economic interests.

North Korea's diplomacy with the United States, such as the release of detained U.S. reporters, was conducted under the general objective of seeking bilateral dialogue.

Its diplomatic moves with Seoul, such as restoring the disrupted traffic in Kaesong and reopening the tourist destination Mount Kumgang, reinvigorated important foreign exchange earnings.

Talks still relevant

While meeting with visiting Chinese Premier Wen Jiabao on October 5, North Korean leader Kim Jong Il said North Korea is willing to attend multilateral talks, including the six-party talks, depending on the progress in the North Korea-U.S. dialogue.

The international community, however, remained prudent about Kim's statement, since North Korea had declared its withdrawal from the six-party talks in an attempt to resolve the Korean Peninsula nuclear issue through bilateral talks with the United States.

Looking back at history, it was the failure of the Agreed Framework signed between the Clinton administration and Pyongyang in 1994 that led to the emergence of the six-party talks, which involved the United States, North Korea, China, South Korea, Russia and Japan.

The mechanism has proven to be a proper framework with which to maintain peace and stability on the Korean Peninsula. It has at least three major functions: resolving the security issues on the Korean Peninsula in a comprehensive way; binding both the United States and North Korea to mitigate the risks in implementing agreements; and serving as a possible mechanism to help maintain lasting peace and stability on the Korean Peninsula.

Given the changes in the international community, including the policy adjustments of the Obama administration, the election victory by the Democratic Party of Japan and China's resurgence, it is probable that Northeastern Asia will undergo a major strategic adjustment.

It is clear that North Korea wants to take this opportunity to improve its relations with the United States. But to promote the peace process on the Korean Peninsula, its bilateral dialogue with the United States should be conducted within the framework of the six-party talks. Attempts to abandon the six-party talks are conducive neither to the improvement of North Korea-U.S. relations, nor to the positive evolution of the regional security structure.

The author is an associate research fellow with the China Institute of International Studies