I really don't know what the US can do at this point. We have strong economic ties to China, which would ruin a lot of companies that are US based but are out sourcing in China (whether you think that is good or not is also a factor).
Personally, we need China to at least be neutral while the war on Terror exists. We don't want this to turn into a situation where "the enemy of my enemy is my friend". At the same time, we can't run around the world claiming to be liberators while ignoring an issue like this.
Personally, I'd like to see China take a more active role against N. Korea. If we can divert their attention away from Taiwan, and toward Kim Jong Il, perhaps they can ties themselves up in that particular fiasco while Taiwan moves towards independence.