China has given North Korean companies operating in China 120 days to close, including joint ventures with Chinese firms.

The decision is a significant toughening of Beijing's dealings with North Korea, which operates restaurants and even art galleries in Chinese cities to generate foreign currency that is sent back to Pyongyang.

North Korea has about 100 restaurants in China, staffed by North Korean waitresses, generating millions of dollars in revenue.

The announcement by China's commerce ministry that North Korean companies must be gone by January, comes ahead of US Secretary of State Rex Tillerson arrival in Beijing on Saturday, where he will hold talks with Chinese Foreign Minister Wang Yi.