Concern over a potential conflict with nuclear-armed North Korea is growing following a series of bellicose statements between Washington and Pyongyang.
Monday's test of the mid-range missile system "achieved its anticipated goal" according to a brief statement by the Chinese defence ministry.
"This test was defencive. It does not target any country," it added.
The US has deployed a missile defense system, known as THAAD, in South Korea to guard against threats from North Korea, despite objections from Beijing, which considers the installation a threat to its own security.
Secretary of State Rex Tillerson and Defense Secretary Jim Mattis have been pushing a diplomatic strategy to convince North Korean leader Kim Jong-Un to come to the table and negotiate away his nuclear weapons.
But other senior figures in the Trump Administration have reportedly endorsed the idea of a "bloody nose" strike to damage Kim's nuclear sector and show the US means business, hopefully without provoking a wider war.
Trump's pick for ambassador to South Korea, Victor Cha, was dropped after refusing to endorse the idea, according to a recent article in the Washington Post.
During last week's State of the Union address, Trump warned that Pyongyang's weapons program "could very soon threaten our homeland."