When it comes to China’s policy toward the Korean Peninsula after the Sino-American rapprochement, deep studies remain absent from the historiography. Although discussed in some articles, it is not done so in detail. This article utilizes archival research in primarily American archives, supplemented by Chinese historical sources, to draw the following conclusions. During the Sino-American rapprochement in the 1970s, China and America reached a certain consensus on the Korean Peninsula issue. The outcome led China to a dilemma, as it had to balance cooperation with America to ensure peace and stability in Northeast Asia while maintaining its alliance with North Korea to prevent Soviet infiltration. While the Sino-North Korean alliance continued, China’s influence over North Korea significantly diminished.