The aim was to prevent an exodus of refugees from the isolated state, the Hankyoreh quoted a resident as saying.
The fence was constructed on the outskirts of China's border city of Dandong, a gateway to North Korea, on Wednesday, two days after the North's announcement, the newspaper said.
It was the first time China has erected a barbed-wire fence along the border with its communist neighbour with whom it shares a long land border, the daily added.
The 2.5-meter-high (8.2 feet) fence stretches about 20 kilometers (12 miles) along the Yalu border river, Hankyoreh said.
The daily quoted an ethnic Korean resident in Dandong as saying that Chinese border guards were mobilised to build the fence, which he said was aimed at stopping North Korean defectors.
"I saw a platoon of Chinese soldiers building the fence on Wednesday," he was quoted as saying.
In a separate move a Chinese bank in Dandong stopped traders from remitting money to North Korea on Friday, the paper said, adding it was not clear whether the move was temporary or part of punitive action against the North.
China, North Korea's last major ally, supported the UN Security Council's vote on Saturday to impose sanctions on the North.
The resolution provides for inspection of cargo to and from North Korea, a travel ban on officials working on weapons programs, and a ban targeting missiles, tanks, large artillery systems, warships and combat aircraft.
But China expressed its unwillingness to carry out invasive inspections of cargo vessels.

Copyright AFP (Agence France-Presse), 2006