The US has tabled a UN resolution for sanctions that would target North Korea's diplomats and cash transfers.
Washington's UN ambassador Susan Rice said they would be "some of the toughest sanctions" the UN had imposed.
Li Baodong, China's UN envoy, said a "strong signal" had to be sent following North Korea's third and most powerful nuclear test last month.
Earlier, Pyongyang warned it would scrap a 60-year Korean ceasefire.
North Korea's military command said it would end the truce with South Korea on 11 March because of the threat of sanctions and the current military exercises taking place in South Korea.
"We aim to launch surgical strikes at any time and any target without being bounded by the armistice（停战） accord（符合，一致） and advance our long-cherished wish for national unification," the statement said.
The Korean War ended with an armistice in 1953 - not a peace treaty - meaning the peninsula is still technically at war.