Malcolm Turnbull wants China to do whatever it takes to bring North Korea back into line, or at least stop threatening its neighbours.
The prime minister's warning to the country with the biggest influence over North Korea comes as Foreign Minister Julie Bishop says the United States will find "new and creative" ways to deal with the rogue nation and a tough-talking Donald Trump warned Kim Jong Un has "gotta behave".
North Korea has accused the US of pushing the Korean Peninsula to the brink of war, but Ms Bishop says Pyongyang has only itself to blame.
"North Korea has vastly increased the threat that it poses to regional and global peace so any rise in tensions is entirely due to the provocative behaviour of North Korea," she said on Tuesday.
The prime minister raised the issue of North Korea's agitation during a recent meeting with Chinese Premier Li Keqiang as well as President Xi Jinping.
"It is a fact that China has the greatest influence over North Korea and the time has come for the Chinese government to exercise it," Mr Turnbull said in Canberra.
"China should do whatever it takes. It has the ability ... to pull North Korea back into at least the position where it is not threatening to rain down devastation on its neighbours."
Australia had neither China's leverage nor the military might of the US but would still do what it could in international forums.
The Turnbull government believes North Korea is on a path to achieving nuclear weapons capability and has ambitions to develop missiles that could reach the US, which would also put Australia within range.
Opposition Leader Bill Shorten said "you'd have to be a fool" not to be worried about what was happening in North Korea, saying nobody could take a backward step in dealing with the rogue nation.
"They are a nation who operate outside the norms of what other countries do and they have nuclear arms, and they keep trying to expand the reach of their nuclear weaponry," he said in Melbourne.
Both the US president and his deputy Mike Pence have issued stern warnings to North Korea as tensions between the countries continue to simmer.
Mr Trump insists all options, including military action, are on the table to prevent North Korea from achieving nuclear weapons capability.
Meanwhile, Mr Pence advised Pyongyang not to test America's resolve, warning "the era of strategic patience is over" as he inspected the demilitarised zone between North and South Korea.
That statement should concentrate the minds of all involved, Mr Turnbull said.
"I believe now the conversations, the engagement between China and the United States, are such that I am optimistic, but not unduly so ... that a resolution can be found," he said.
North Korea's latest missile test fizzled over the weekend, but it conducted two nuclear test explosions and 24 ballistic missile tests last year.
Experts predict it could have a nuclear-tipped missile capable of reaching the US mainland within a few years.
