On Tuesday, North Korean leader Kim Jong-un supervised a ground test of a new rocket engine for launching satellites, the North’s official KCNA news agency reported.

During the meeting between Li and Obama on the sidelines of the annual UN General Assembly session in New York on Tuesday, “both leaders condemned North Korea’s September 9 nuclear test and resolved to strengthen coordination in achieving the denuclearisation of the Korean peninsula”, a White House statement said.

Li also reiterated during his talk with Obama his government’s opposition to the deployment of a US-developed missile shield in South Korea, and called on all parties to refrain from any activities that might escalate tensions in the region.

“China is committed to the denuclearisation of the peninsula, to maintaining peace and stability there and to settling the issue through dialogue,” Xinhua quoted Li as telling Obama.

Sun Xingjie, a Korean affairs analyst from Jilin University, said that Beijing was hoping to restore international collaboration among the different parties, especially with Washington and Seoul after the Park Geun-hye administration agreed to deploy the US Terminal High-Altitude Area ­Defence (THAAD) system to counter the North’s missile threat.

“The reality is that North Korea is gaining deterrence force against China and the US, and this could be the major reason for the US and China to seek closer cooperation,” Sun said.

To reach an agreement, Sun said Beijing and Washington could each take a step back, especially over the deployment of THAAD, which Beijing fears could expose its military operations via its radar system.

However, China-based military observer Zhou Chenming said concessions on THAAD were unlikely.

“The US will not give any concession in terms of the THAAD ­deployment, because it is one of the most important parts for Washington in strengthening its air defences in the western Pacific region,” he said.

The meeting between Obama and Li came after talks between top diplomats from the US, Japan and South Korea in New York.

Li is expected to give a speech in the US today to present China’s stance on global governance and peace and development, before leaving for Canada and Cuba as part of a three-nation trip.

Meanwhile, the Liaoning public security bureau announced last week that it had placed Dandong Hongxiang Industrial Development Company, on the border with North Korea, under investigation for “serious economic crimes in trade activities”. The company’s boss, Ma Xiaohong, was one of the Liaoning lawmakers who were dismissed over vote-buying fraud at the provincial legislature.

The statement did not give details of the suspected illegal activities. But a report jointly released by think tanks in South Korea and the US on Tuesday said the company conducted US$530 million in two-way trade with North Korea between January 2011 and September 2015.

Dandong Hongxiang entered into a joint venture in 2009 with the Korea National Insurance Corporation. It was a government entity named by the European Commission as generating foreign-exchange revenue that could contribute to Pyongyang’s nuclear or missile programmes, the report by the Asan Institute for Policy Studies in Seoul and C4ADS in Washington said.

Additional reporting by Minnie Chan