The situation was at a “crossroads”, but must not be allowed to develop into a conflict, he said after meeting Secretary of State Rex Tillerson.
Rex Tillerson spoke of “dangerous levels” of tension, a day after suggesting the US might launch a pre-emptive strike against North Korea.
North Korea is working to develop nuclear missiles that can reach the United States.
Rex Tillerson is in Beijing in the final leg of his East Asia tour, which has been dominated by anxieties over North Korea.
Last week, North Korea launched four ballistic missiles – defying UN resolutions.
In South Korea on March 17, Rex Tillerson said a US military response would be on the table if North Korea threatened South Korea or US forces.
And President Trump tweeted that North Korea was “behaving very badly”.
Donald Trump also said that China – North Korea’s main ally – had done “little to help”.
Wang Yi defended China’s position, saying all parties were duty-bound to implement UN sanctions against North Korea, but also to seek dialogue and diplomatic solutions.
He said: “We hope that all parties, including our friends from the United States, could size up the situation in a cool-headed and comprehensive fashion and arrive at a wise decision.”
Secretary Rex Tillerson did not repeat his threat in Beijing, but stressed that the US and China shared “a common view that tensions on the peninsula are quite high right now – and that things have reached a rather dangerous level”.
However, he added that they had both committed “to do whatever we can to prevent any kind of conflict breaking out”.
The US has deployed its Terminal High-Altitude Area Defense system (THAAD) in South Korea in a move it says is designed to protect against threats from North Korea.
However, China has claimed the system goes “far beyond” the defense needs of the Korean peninsula.
Secretary Tillerson, a former oil executive with no prior diplomatic experience, will meet Chinese President Xi Jinping on March 19.
President Xi Jinping is scheduled to visit the US in April for his first meeting with President Donald Trump.
Some commentators expect Rex Tillerson to downplay any tensions between the two countries ahead of that encounter.
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