Kim's previous trips to China, North Korea's biggest benefactor, have led to steps that have reduced security concerns between the rival Koreas.
In 2000, Kim's trip was soon followed by a summit in Pyongyang with South Korea's leader and the start of two major joint development projects in North Korea.
South Korea is expected to seek economic and political punishment against Pyongyang for the attack on the ship but avoid a revenge strike that might spark an escalating conflict between the rivals and devastate its own recovering economy.
China, fearful of a collapse of the Kim family regime that could bring chaos to its border, has supported the Kim and his father for decades.
Analysts say Beijing wants to prevent an escalation of military tension but is unlikely to punish its neighbour if it were to blame for the attack on the warship.
Analysts also say Kim may be heading to China to seek financial aid in exchange for a return to international nuclear disarmament-for-aid talks hosted by Beijing that Pyongyang has boycotted for over a year.
The North has come under pressure to return to six-country nuclear talks due to UN sanctions imposed after a May 2009 atomic test that have dealt another blow to its already shaky economy.
|A South Korean naval ship sinking killed 46 sailors last month [EPA]
A 2004 trip to China led to a push for talks on the North's nuclear programmes and in his last trip in 2006, Kim toured China's industrial centres for a look at the engine of its neighbour's rapidly growing economy.
Dalian, a thriving city that has attracted major foreign investment, is a symbol of development that Beijing's leaders have advocated for years to Kim and his father and state founder Kim Il-sung, to revive the North's moribund economy.
Kim is even more reliant on China's help after a botched currency reform at the end of last year worsened inflation and sparked rare civil unrest that raised questions about Kim's grip on power in the state his family has run for more than 60 years.
There has been no official confirmation of the trip, and reporters, camping out along the railway line that Kim's special armoured train would have to use to enter China, were chased out of the area by Chinese security agents just before the suspected crossing.
Yonhap said the train thought to have carried Kim crossed in the pre dawn hours of Monday with several hundred Chinese security agents sealing off the area around the train station.
Witnesses at the border said the security clampdown ended a few hours later.