Dear 100 Hour Board,
Is it in China's interest to allow a Korean peninsula unification?
-Lazy Bone - My Best Friend
Ha ha, NO. China would be the biggest loser in a reunification situation. They are well aware of this. Korean unification would occur with the collapse of the North Korean government, so North Korea would economically, culturally, and crucially, POLITICALLY be subsumed into South Korea (not without hiccups, it would be a humanitarian, cultural, and economic crisis on a massive scale for a while). South Korea is allied with America. China does not want to border a strong American ally. That idea makes them very uncomfortable. Of course the situation is more complex than this, but China's desire to not have American troops, military bases, and ICBMs next door goes a long way towards them propping up the North Korean state.
Let's also remember that North Korea's nuclear program exists to prevent exactly this from happening. Their rhetoric makes sense, if you understand their perspective - they couldn't care less about destroying the US, they just want to make it extremely clear to the rest of the world that any attempt to topple them would end in mutual nuclear devastation. Most realistic reunification scenarios include nuclear war as one of their major plot points, and nuclear war right at China's border is not something China would welcome.