The theory is inconsistent with some points. In order this theory to be true, then some points would have to be false.
China has been a long supporter of North Korea. And North Korea's nuclear development program has been in existence for a very long time, since the 1990s and China has never raised a harsh voice against DPRK for all this time. After a lot of diplomatic playing around and development of plutonium processing, the first nuclear test was carried out in 2006. The second in 2009. ALl this time, the US has always been in opposition to DPRK doing the whole diplomatic work and such. I can't find any evidence of China giving DPRK a strong voice of criticism or any kind of meaningful degree of sanctions. Third test in 2013, and then, the fourth and fifth test in 2015. So finally, this year, China seems to have applied some real level of penalty. And I think it is because it is the first time that the US made the threat to use military force against North Korea. Before that, it was all that diplomatic, 6 party talk, and all it did was given DPRK time to develop its program. If China really did not want to see a nuclear capable DPRK, then why hasn't China done anything about it in the past 3 decades? It was not China that tried to denuclearize the peninsula in the past 3 decades.. it has always been the US.
Furthermore, there seems to be a Chinese firm, Dandong Hongxiang Industrial Development Co, that has helped with DPRK nuclear technology development.
On the point about DPRK will direct nukes against China is like saying the UK will point their nukes against the US to pressure the US to give whatever the UK wants. No.. just as the US and the UK are aligned, China and the DPRK are also aligned, made evident in the past 3 decades, well.. past 7 decades really. Although it seems to be that it might be the first time this year that DPRK is trying to show displeasure to China. But still certainly more aligned with China than the US.
To sum up, you raise two point.
1.) If China really did not want to see a nuclear capable DPRK, then why hasn't China done anything about it in the past 3 decades?
2.) Would NK point the nuke on China?
For question 1.
Do bear in mind China only has been in the international political arena for the past decade, which started to make decision that impact the regional security, prior to that, it's nominally about security within Chinese own border.
The problem for China is that, North Korea is a double edged sword, on one hand, had the state of NK gone nuclear, the Chinese have to risk going to thermonuclear war on behalf of North Korea, in case they have used it on South Korea, Japan or the USA. On the other hand, they hold a trump card with North Korea, that is in the form of Kim Jong-nam, which is the key to NK political circle, because politics 101 will tell you, you cannot have a coup without a proper and groomed leadership, Jong-nam is that man. That is why he was protected by the Chinese and stayed in Macau
But now, he's dead, it basically forced Chinese hand to have another approach, up to that point, China can easily (well, not exactly easy, but doable) to have force a regime change and alter the course of North Korea, but now this is not going to be the case, if Kim's gone, there will be an "Iraq" for China to deal with, only this time, they are armed with nuclear weapon.
Kim Jong-UN knows that, that is why he ordered the purge and the assassination of his brother. And that is the ultimatum Kim Jong have with China, this is something You won't be able to imagine the North would do in the past 3 decades, and certainly will not happen had Kim Il-sung is in charge, that tell us something.
A.) Kim Jong does not trust the Chinese, am not going to say he hated them, but he have some sort of mistrust with the Chinese
B.) Kim Jong sees his land no longer being a vassal state to China.
Both of which is Alarming for China.
China does not want to see a nuclear capable North Korea, but one way or another, they could not do anything about it, nor would they have any card to play to begin with. China in early 2000 is still weak and needed North Korea as buffer. But now, things are different, the need for a nuclear power as a buffer does not outweigh the cost Chinese is playing, which is to support the North no matter what and losing the South to the American.
2.) Politics is a strange game, today's friends may be tomorrow enemies, and yesterday's enemies may be today's friends, especially so if you are in a dictator regime. If you want me to name example how easy relationship can change and do a 180, I can name a lot. From Egypt switching side from Soviet after Yom Kippur War, to Iran switching to Russia after Islamic revolution, Vietnam from China to Russia after WW2, Uganda from Israel to Libya and Soviet Union and so on.
Will we see Kim pointing nuke at China? Maybe, or maybe not, but is it possible? Yes, couple with the fact that Kim is not rational or at least does not appear rational. We cannot say for sure, but I will know just this, it would be naïve to think North Korea will still be under Chinese leash if and when they have a full Nuclear Weapon arsenal. Once they have achieve that, North Korea will be more assertive, and China will be more submissive. Unless you honestly think Chinese leadership will still put 100% faith on North Korean leader, because if the Chinese do, there are no way they would provide safe haven to Kim's Brother.
Old Man you saying China begging US not to launch an attack after sending some fleet? Unfortunately nobody is buying that Hollywood script. US was trying to scare off Kim but it didn't do much so US decided well lets give more warnings instead not because China is afraid of war it's the US who does not wish to have a war with us. Freedom of Navigation is just same old excuse, don't you get tired of overusing that phrase? Next time just tell Trump to pick up the phone and issue more sanctions instead of performing a costly theatrical sensationalism just to achieve the same thing.
Since you follow up PLA's rapid development you probably can guess the answer yourself.
