The surprise development was confirmed by US President Donald Trump's national security adviser HR McMaster, who said that there was international consensus to act.
He said: "We are working together with our allies and partners and with the Chinese leadership to develop a range of options.”
Mr McMaster added: "This latest missile test just fits into a pattern of provocative and destabilising and threatening behaviour on the part of the North Korean regime.
Donald Trump (R) and Chinese leader Xi Jinping
“There is an international consensus now, including the Chinese leadership, that this is a situation that just cannot continue.”
The move marks a dramatic change in China’s foreign policy in the region as it had previously remained a steadfast ally of North Korea for decades, effectively acting as a buffer between the rogue state and the possibility of intervention from the rest of the world, namely the US.
As recently as Thursday, China once again attempted to play peacemaker between the US and North Korean leader Kim Jong-un, calling on both sides to avoid a military conflict while asking the latter to curb a nuclear program that’s long been outlawed by the United Nations.
North Korea May Be Preparing a Nuclear Test for Kim Il-Sung’s Birthday
Fri, April 14, 2017
North Korea has begun preparing festivities for the 'Day of the Sun,' a holiday celebrating communist leader Kim Il-Sung
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Military officers visit the birthplace of North Korean founder Kim Il Sung, a day before the 105th anniversary of his birth, in Mangyongdae, just outside Pyongyang
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The test launch of North Korea’s missile reportedly ended in utter failure with it blowing up almost immediately after it was fired, so claimed the US Pacific Command.
But the actions of Kim Jong-un appear to have alienated China.
An editorial in the Global Times – effectively the unofficial mouthpiece of China’s ruling party – said there would be “unprecedented ferocity” if the government of Kim Jong-un goes ahead with a test of either an intercontinental ballistic missile or a nuclear device.
After the test firing it seems that China now will limit its oil shipments to the reclusive country.
Kim Jong-un during the state parade
Earlier, China banned imports of North Korean coal on February 26, cutting off its most important export.
China's customs department issued an order on April 7 telling traders to return North Korean coal cargoes, said trading sources with knowledge of the order.
The developments come amid US Vice President Mike Pence’s visit to South Korea for talks on the North's increasingly defiant arms programme.
His visit comes a day after North Korea held a grand military parade in its capital city of Pyongyang, marking the birth anniversary of the state founder.
US President Donald Trump (L) with Chinese leader Xi Jinping
What appeared to be new long-range ballistic missiles were on display in the parade.
Tensions have been steadily rising throughout the region as Mr Trump has held a hard line with North Korean leader Kim Jong-un, who ignored the message coming out of China.
A US foreign policy adviser who was travelling on the Air Force One with Mr Pence to South Korea, said that the North Korean missile test was not a surprise.
Speaking on the guarantee of anonymity, he said: "We had good intelligence before the launch and good intelligence after the launch.
"It's a failed test. It follows another failed test. So really no need to reinforce their failure. We don't need to expend any resources against that."
One of the North Korea rockets on display during the parade
The adviser said the missile's flight lasted four or five seconds.
North Korea has warned of a nuclear strike against the United States if provoked. It has said it has developed and would launch a missile that can strike the mainland United States but officials and experts believe it is some time away from mastering the necessary technology, including miniaturising a nuclear warhead.
North Korea launched a ballistic missile from the same region this month, ahead of a summit between the United States and China in Florida to discuss the North's arms programme.
But that missile, which US officials said appeared to be a liquid-fuelled, extended-range Scud, only flew about 40 miles, a fraction of its range, before spinning out of control.
North Korean leader Kim Jong-un
China's top diplomat, Yang Jiechi, and US Secretary of State Rex Tillerson exchanged views on the "situation on the Korean peninsula" by phone on Sunday, China's official Xinhua News Agency said.
Mr Yang said the two sides should maintain dialogue.
Foreign Secretary Boris Johnson previously said that the UK stood alongside the US.
He said: "We stand alongside our international partners in making clear that North Korea must adhere to UN resolutions designed to secure peace and stability in the region and stop its pursuit of nuclear weapons.”