"I think to the extent that we can identify some of the problem players with regard to North Korea, we ought to identify who they are and Chinese entities ought to be sanctioned and we ought to figure out ways to going after them. We need creativity and I think that will be something that would be helpful," he said.

Secondary sanctions, also known as "secondary boycott," are considered one of the last-remaining sanctions tools against the North, and call for penalizing companies doing business with Pyongyang. Chinese firms are expected to be subject to the measure as most of the North's dealings with the outside world are with China.

Former US President Barack Obama was reluctant to impose secondary sanctions out of fear of souring relations with China.

But his successor, Donald Trump, is widely expected to pursue those measures as he has been strongly critical of Beijing for not helping resolve the North Korea problem.

China is North Korea's last-remaining major ally and a key provider of food and fuel supplies. But it has been reluctant to use its influence over Pyongyang for fears that pushing the regime too hard could result in instability in the North and hurt Chinese national interests.

Beijing has often increased pressure on the North in the past, especially when Pyongyang defied international appeals and carried out nuclear and missile tests and other provocative acts, but it never went as far as to cause real pain to the North.

Lee Jung-hoon, Seoul's ambassador for North Korean human rights issues, said that China's retaliation against South Korea for hosting the US THAAD missile defense system served as a "wakeup call" for South Koreans' perceptions about the neighboring nation.

"This THAAD issue and the Chinese response to this is allowing us to see China for what it really is, just as in the case of North Korea. It is certainly not well becoming of a country that wants to be a global leader," Lee said during the AEI discussion.

"We have to deal with this kind of China. It's sort of a wakeup call. Let's not have a fantasy to think that somehow we can gain Chinese cooperation to rein in on North Korean situation," he said.

South Korea decided last year to host a THAAD battery to boost defenses against North Korea.

China has taken a number of economic retaliatory measures, including restrictions on South Korean imports and a ban on Chinese tourists from visiting the neighboring nation, as Seoul refused to give in Chinese pressure to scrap the decision to host THAAD. (Yonhap)