Prime Minister Bill English says it is good to see the China and United States communicating about how to deal with North Korea.
US vice president Mike Pence has warned the communist state not to test America's resolve by continuing to pursue its nuclear programme after a failed a failed ballistic missile at the weekend.
He said his country's "era of strategic patience" with North Korea was over.
There have been escalating tensions between North Korea and the US in the past week, with heated rhetoric from both countries.
On the weekend, North Korea put on a grand military parade commemorating the 105th anniversary of the birth of the nation's founding president, Kim Il-sung.
Mr English told Morning Report the actions of the US and China showed their seriousness of intent.
"It is good to see the Chinese and the US leadership communicating about how to deal with North Korea and put pressure on them."
He said hoped conflict could be avoided, and that diplomatic pressure and sanctions would be employed.
China has the opportunity to put economic pressure on North Korea and seemed to be taking advantage of that, he said.
But it was not known how North Korea would respond, Mr English said.