The 17-year-leadership of Kim Jong Il, started from his election as Chairman of the North Korean National Defense Committee, could be divided into four periods, namely, the leadership under the guide of the will period; the pre-administration period; the mid-administration period; and the late-administration period. This paper aims to analyze the “Byungjin” foreign policy and China-DPRK relations pursued by North Korea in the late Kim Jong-il’s administration from the perspective of the assumptions of North Korea’s implementation of the nuclear-holding strategy and effectuation of the nuclear issue as the main theme of great power game. The late Kim Jong Il administration was in the transition period of the regime of successor system. Although DPRK achieved the staged goal of the nuclear ownership strategy with the success of two nuclear tests, the national security situation was still grim. In order to successfully complete the transition of the regime and implement the “powerful and prosperous” national strategy, North Korea adopted “Byungjin approach” in both interior and foreign affairs. Concerning the interior affairs, on the basis of adhering to “military-first politics”, more attention was paid to economic development and the improvement of people’s livelihood. As to the foreign affairs, focuses were on both the “nuclear diplomacy” and “economy diplomacy”, that is, the “Byungjin approach”. On the one hand, the nuclear diplomacy strategy was continuously advanced, and the “Brinkmanship” strategy and the off “Six-Party Talks” mechanism were carried on to defend the results of nuclear tests against such countries as the United States, South Korea, Japan and others with regard to the North Korean nuclear issue. On the other hand, the economic factors in foreign activities were paid due attention to. The economy-promoting-governance policy was taken to promote the economic-diplomatic relations between the friendly countries such as China and Russia; and to improve the relations with the United States, Japan, and South Korea, aiming at the economic benefits. In the process of implementing the “Byungjin” foreign policy, Kim Jong Il personally promoted the development of DPRK-China relations, actively sought a foreign policy with the political support and economic cooperation as the core with China, so as to elevate Sino-DPRK relations to a strategic height and a long-term prospect. To strengthen the political support and economic cooperation and assistance from China, Kim Jong Il administration maintained close communication by way of high-level exchanges on the matters of DPRK nuclear issue and others, and promoted mutual trust and reciprocal cooperation continuously. Taking the event of “PRC-DPRK Friendship Year” as an opportunity, the economic and trade cooperation were enhanced, and the cultural exchanges were enlivened. After the trial of North Korean nuclear tests, the new type of neighborly, friendly and cooperative state-to-state relations have been further developed.