Chinese State Councilor Yang Jiechi co-chairs the dialogue with U.S. Secretary of State Rex Tillerson and Secretary of Defense James Mattis.

Susan Thornton, the US acting assistant secretary of state for East Asia, said the US will raise the issue as part of the US-China Diplomatic and Security Dialogue in Washington.

The diplomatic and security dialogue is one of four high-level mechanisms established during the Mar-a-Lago meeting between Chinese President Xi Jinping and U.S. President Donald Trump in Florida in April.

"We're going to be focusing, as I said, on particularly on the urgent threat posed by North Korea, and we expect that that will take some time", Thornton said.

Tillerson says the US and China agree that their companies should not do business with any North Korean companies that are subject to United Nations sanctions.

Trade and investment are also due to take a high profile following President Donald Trump's repeated complaints about the US trade deficit with China, which hit $310 billion a year ago, by far the largest imbalance with any country. "At least I know China tried!"

North Korean threats, trade tensions and global terrorism are expected to be among the issues discussed at the inaugural U.S.

Tillerson told a news conference after security talks with China on Wednesday that North Korea is using money laundering, extortion and malicious cyber activity to help fund its weapons programs.

Noting that up to now, Chinese have taken a fairly limited profile in counter-terrorism efforts undertaken by the global community, Thornton said, adding that the U.S. would like to see them step up and take more responsibility.

"The military dimension today is in support of the diplomatic and economic effort led by the State Department and at the same time we have an effective posture in the region to deter KJU (Kim) and also to respond in the event that deterrence fails". North Korea hasn't conducted a nuclear test explosion as feared earlier this year but has kept up its rapid pace of missile launches.

On Wednesday, China called on relevant parties to consider and adopt these proposals, in a bid to pull the Korean Peninsula nuclear issue back on the right track of peaceful resolution through dialogue and consultation.

"Chinese leaders have no love for Kim Jong-un's regime or its nuclear weapons, but [they dislike] even more the prospect of North Korea's collapse and the unification of the Korean Peninsula with Seoul as the capital", writes Richard N Haass, president of the Council on Foreign Relations.

Mattis said Warmbier's death goes "beyond any understanding".

He says the student, Otto Warmbier, had gone there a healthy man and ended up dead after "a minor act of mischief". "There is no way that we can look at a situation like this with any kind of understanding", Mattis said.

Defense Secretary Jim Mattis says the American people are growing increasingly frustrated over the government in North Korea that "provokes, provokes and provokes".