North Korea and Iran appear to exchanged ballistic missile technology in defiance of United Nations sanctions, according to a confidential report of the organization’s obtained by the Reuters news agency this weekend. The illicit technology transfers had enjoyed “trans-shipment through a neighboring third country,” according to the study. That country was China, said diplomats.

The report was submitted to the Security Council by a panel of experts that was assigned to monitor North Korea’s compliance with sanctions imposed on the seclusive East Asian dictatorship after it conducted two nuclear weapons tests in 2006 and 2009. The sanctions, which remain in place, explicitly ban trade in nuclear and missile technology with North Korea and called for a general arms embargo.

While it is not especially shocking that two “rogue” nations as Iran and Korea would exchange military technology — if only because they have very few partners to trade with — China’s suspected role in the matter is more damaging because it likes to expand its influence as the predominant power in East Asia. The United States are unlikely to accept an increased Chinese security presence in the region as long as it either refuses or is unable to control its North Korean ally.

Chinese civilian leaders have expressed growing puzzlement and anger about the North’s behavior. Last year, the regime sunk a South Korean corvette and threatened “all out war” if Seoul responded militarily. In November, it shelled an island along the maritime border with the South and promised “merciless” strikes if the violence continued.

As China won’t rein in Pyongyang’s erratic posturing, the United States, according to defense secretary Robert Gates, will have to maintain their military presence in the West Pacific. “Without such a presence,” he warned earlier this year, “North Korea military provocations could be more outrageous or worse.”

The news of the missile exchange follows a Sino-American economic and security dialogue in Washington DC last week where it was agreed that the two superpowers would hold regular military summits to ease existing tension. Because of mounting Chinese assertiveness in the region and continued American arms sales to Taiwan, mistrust on both sides remains.