China has rejected a proposed UN resolution which condemns North Korea over last week's missile tests and allows for possible sanctions.
North Korea test-launched seven missiles last week, including the long-range Taepodong-2 missile.
Amid fading hopes for quick action over Pyongyang's missile tests, China said the draft UN Security Council resolution was an 'overreaction'.
China holds the veto power to block any resolution and said the legally-binding council resolution would 'undermine the progress' on North Korean disarmament talks.
President Hu Jintao said China opposed any action that may worsen the situation on the Korean peninsula.
South Korea, China and the US have all held separate talks with North Korea, a day after a vote on the draft resolution was postponed by the UNSC.
China has since circulated a non-binding draft UN statement as an alternative to the draft resolution. The statement contains many of the key elements of the resolution that has the backing of all Western members of the UNSC.
However, the Chinese text omits a description of the tests as a 'threat to international peace and security' as well as omitting reference to Chapter Seven of the UN Charter.
Chapter Seven, invoked in cases of threats to international peace and security, can authorise sanctions or even military action.
The US envoy on North Korea, Christopher Hill, has returned to Beijing for the second time in a week, as he tries to muster diplomatic consensus on the issue.
