North Korea and the USA are at loggerheads with both sides issuing menacing threats.
He told Xi the ultimate goal of sanctions was to persuade North Korea to engage in dialogue about abolishing its nuclear program.
The two leaders agreed to hold talks as soon as possible, with the sidelines of a summit of Group of 20 major economies in Germany in July being earmarked as a possible opportunity for this to happen.
While taking the oath of office Wednesday, Moon said he's open to visiting North Korea under the right conditions. A prompt resumption of talks is necessary given the slew of outstanding issues between the two countries - including North Korea's nuclear ambitions and the deployment of the US missile defense system THAAD to South Korea against that threat - which Beijing is deeply opposed to.
It is true that South Korea would not realistically pivot away from the United States the way the Philippines has, but a foreign policy more independent from the United States would win points for Moon with his own public, and with South Korea's largest trading partner.
China views THAAD as a threat and a destabilizing influence in the region, and has retaliated against South Korea with limits on tourism and imports.
Chinese President Xi Jinping made a telephone call to newly-elected South Korean President Moon Jae-in on Thursday and congratulated him on his victory state.
Moon also raised the issue of economic retaliation against South Korean firms in China, Yoon said.
The phone call went smoothly despite some conversation about THAAD, according to Yonhap.
But in a 25-minute conversation, Moon and Japanese Prime Minister Shinzo Abe said they hoped to meet at an early date and exchanged invitations to visit, according to both sides.
"We urge the relevant authorities to immediately detect and arrest and hand over to the DPRK the masterminds of the disgusting state-sponsored crime, accomplices and their followers", the office said, referring to the country by the initials of its official name, the Democratic People's Republic of Korea.
The Global Times goes on to compare Moon's foreign policy options to those of Philippines President Rodrigo Duterte, who has recently made a dramatic pivot from the U.S. to closer ties with China. She is now in prison awaiting trial on corruption charges.
"The new South Korean government will actively communicate with China on these issues and seek appropriate resolutions", the statement quoted Moon as saying.
North Korea on Thursday demanded the handover of "terror suspects" involved in the plot but it did not identify anyone.
He asked them to help in curbing North Korea's nuclear programme and both promised to.