"Before the 19th (Party) Congress, China fears more of its border instability than a nuclear-armed (North Korea)".
China says the system affects its own security because of its powerful radar, and will do nothing to ease tension with North Korea.
Gen. Fan Changlong, a vice chairman of China's Central Military Commission, spoke with Dunford before the meeting with Xi.
"What is unimaginable is allowing [North Korean leader Kim Jong-Un] to develop ballistic missiles with a nuclear warhead that can threaten the United States and continue to threaten the region".
Chief White House strategist Steve Bannon said on Wednesday there could be no military solution to the stand-off.
Last week, President Donald Trump threatened to rain down "fire and fury" if challenged by North Korea.
Tuesday's signing of the Joint Strategic Dialogue Mechanism opens the door for building trust and understanding between the two militaries, "but it will only be useful if it results in meaningful dialogue that reduces the risk of miscalculation - which is especially critical now due to growing North Korea provocations", a senior USA defense official told VOA on Tuesday.More news: Senior officers removed from duty after Fitzgerald collision
On Tuesday, China, which has been accused by the USA of not doing enough to rein in Mr Kim's authoritarian regime, started implementing a ban on North Korean imports of iron, iron ore and seafood as part of a far-reaching UN Security Council resolution passed earlier this month.
"Until somebody solves the part of the equation that shows me that 10 million people in Seoul don't die in the first 30 minutes from conventional weapons, I don't know what you're talking about, there's no military solution here, they got us", he told The American Prospect.
The day before Fang met with Dunford, Chinese Foreign Minister Wang Yi held a telephone conversation with his Russian counterpart Sergey Lavrov. Kim said North Korea would conduct the launches if the "Yankees persist in their extremely risky reckless actions on the Korean Peninsula and its vicinity", and that the United States should "think reasonably and judge properly" to avoid shaming itself, the news agency said. "That is as forceful a declaration of the worldwide community's perspective on this issue as we've seen".
The chairman of the Joint Chiefs of Staff says he's aiming to further develop a working relationship with his counterpart in China in order to lessen the risk of miscalculation on the Korean Peninsula as tensions rise between the USA and North Korea.
"The alternative would have been both catastrophic and unacceptable!"
To that end, China has arranged a series of important meetings and visits to help Dunford "know more about our military, (boost) our cooperation and build up our friendship", Fang said. "We share a commitment to work through these hard issues". Next week's start of U.S.
In a phone call with Trump on Saturday, Chinese President Xi said all sides should avoid rhetoric or action that would worsen tensions on the Korean Peninsula.