US President Donald Trump has warned that "all options are on the table"
Tensions on the Korean peninsula are at "tipping point," following the North's latest ballistic missile launch, China says.
North Korea on Tuesday fired a midrange ballistic missile that flew over Japan. The move prompted Donald Trump to say that "all options are on the table."
The test - one of the most provocative ever from the reclusive state - came as US and South Korean forces conduct annual military exercises on the peninsula.
Chinese foreign ministry spokeswoman Hua Chunying reiterated Beijing's call for peace talks, saying "pressure and sanctions" against North Korea "cannot fundamentally solve the issue," and said the country needed to exercise restraint.
"The UN Security Council has put through several resolutions and sanctions have all along been put in place but everyone can see whether they've had actual results," she added.
"On the one hand, sanctions have continued to be put in place via resolutions and on the other hand North Korea's nuclear and missile launch process is still continuing."
Mr Trump said: "The world has received North Korea's latest message loud and clear: this regime has signalled its contempt for its neighbours, for all members of the United Nations, and for minimum standards of acceptable international behaviour.
"Threatening and destabilising actions only increase the North Korean regime's isolation in the region and among all nations of the world.
"All options are on the table," he said.
The US President and Japanese Prime Minister Shinzo Abe agreed in a phone call that "North Korea poses a grave and growing direct threat to the United States, Japan, and the Republic of Korea, as well as to countries around the world."
The White House said the two leaders "committed to increasing pressure on North Korea and doing their utmost to convince the international community to do the same."
South Korea's military said the missile travelled 1,678 miles and was fired from North Korea's Sunan region, near the capital Pyongyang, just before 6am local time.
The Japanese government's warning system urged people in an area in the north of the country to take precautions after the missile launch early on Tuesday morning.
Sirens were sounded and text messages were sent to residents warning those in the missile's flight path to take cover.
One resident, Joe Narsico, told Sky News he received a text alert: "The first alarm was with my smartphone ... saying that a missile is passing through and we have to take cover and be careful."
Japan's military did not attempt to shoot down the missile, which broke into three pieces and fell into the sea east of Hokkaido, despite previous promises to shoot down North Korean missiles or rockets that threaten to hit its territory.
Earlier this month, North Korea reportedly made a miniaturised nuclear warhead that could fit inside one of its intercontinental ballistic missiles.
It prompted Mr Trump to issue a warning of "fire and fury" on the North, while Pyongyang threatened to fire missiles towards the US territory of Guam.
Any missile fired towards Guam would have to fly over Japan and analysts said Tuesday's test presents a major challenge to both Tokyo and Washington.
"Pyongyang has demonstrated that its threats to the U.S. base on Guam are not a bluff," said Konstantin Kosachev on Tuesday, chairman of Russia's upper house of parliament's international affairs committee.