U.S. embassy cables have shown that China would accept the unification of the two Koreas under South Korea’s leadership.

The British daily, the Guardian, quoted embassy cables revealed by Wikileaks as saying Tuesday that South Korea's vice foreign minister was told by two Chinese officials that they believed the two Koreas should be reunified under Seoul's control.

The daily said that the embassy cables revealed that North Korea had lost its strategic value to China as a buffer state between their forces and the U.S.

The report said that Pyongyang could be about to lose its only insurer and that long before last week's shelling of a South Korean island, senior Chinese officials believed that their strategic asset had turned into a major liability.

The paper added that a Chinese ambassador called North Korea's nuclear activity a threat to the whole world and that Beijing has already calculated how many refugees it could take in from North Korea before closing its borders, should the regime in Pyongyang come to an end.