A failing regime attepting to externalise discontent by courting war is nothing new. Argentina went to war with the UK in 1982 because the military regime was on the brink of collapse. It needed the military sucess to quieten the discontent. Iraq went to war with Kuwait in 1990 for similar reasons - Saddam needed to distract both the civilian and military discontent which was rising after the end of the Iran-Iraq war which proved be a costly, bloody draw.
N. Korea knows that in a war with the south, it can not win without outside aid. It's political elite may seem insane, but it's military won't be. 2+2 must equal 4 when it comes to war. Most of it's kit is of 60's/70's Soviet vintage and most of their army comprises of conscripts. S. Korea is hardly a superpower, but it's army is modern and apparently well trained. If N. Korea breaks the cease-fire, it will almost definatly face US forces, with the possibility of Japanese intervention. In that situation, the best she could hope for was a 'rolling retreat', inflicting enough casulties to make the US/UN/S. Korea's will to fight to flag enough for an cease-fire, so the regime survives.
It will only win if China gets involved. It won't. She is not ready to directly challenge the US militarily...yet. Give it a decade or two.
China was never communist. Nor was any of the old Soviet bloc. It was Stalinist - a hybrid of Fascism and Socialism. It failed because the classic problems of closed societies. A closed society can't adapt with the times. It can't innovate. Anything new is seen as a threat first, and a possibility a distant second. The leadership will become more and more elderly and out of touch as the decades pass. Large military/secret police budgets sap the economy. It will constantly need to externalise threats of spies/rebels/enemy nations to justify it's existance. The beaucracy will leech more and more from the economy, as it enjoys the trappings of power.
What China has done is open up economically, but still retain all power. It has loosened freedom of speech just enough to encorage innovation in science and technology, but not giving an inch on poltical, religious or social affairs. By reducing the direct involvemnt of the state in the economy, it has made it much more efficiant, so it can compete with the rest of the world. By co-opting the CEO's of chinese firms (or failing that, threaten) the state has the benefits of capitalism with the control of communism. The teeth of the military, party and secret police are still there, sharper than ever due to all the cash capitalism has given to the Chinese.
You have to remember, they are Chinese. The oldest continious civilization on the planet. She has been powerful, rich and advanced for most of the last 3000 years. To the Chinese, it is not 'the rise of China', more of the restoration of China to her rightful place in the world - at the top.