Basically on this matter, the Chinese government has taken a similar approach as the previous US administration, which is to not take actions. On hindsight of course it is easy to say China (Obama) should have done this or that. But it was quite hard to justify actions against NK until pretty recently. And indeed actions were taken in the form of economic sanctions in light of recent events.
The US have an embargo against North Korea, whereas the chinese are selling them materials to build their missiles with.
They could start by putting political pressure on them, levying trade sanctions and publicly denouncing their nuclear program.
North Korea’s Hydrogen Bomb Claim Strains Ties With China
JAN. 6, 2016
https://www.nytimes.com/2016/01/07/world/asia/north-korea-ch...
China announces sanctions against North Korea
5 April 2016
http://www.independent.co.uk/news/world/asia/china-announces...
On the other hand, your point would apply pretty well to China's response to South Korea's defense systems. (It's not just that China's calling it espionage; the article mentions serious hacking attacks.)