(Adds China comment, other reaction)
By Patricia Zengerle
WASHINGTON, Feb 5 (Reuters) - U.S. lawmakers introduced legislation on Thursday to broaden sanctions against North Korea by imposing stiffer punishments on foreign companies doing business with Pyongyang, a measure that could impact mostly on Chinese firms.
"In the wake of the state-sponsored cyber-attack on Sony Pictures, the bipartisan legislation targets North Korea's access to the hard currency and other goods that help keep the regime in power," said the bill's co-sponsor, U.S. Republican Representative Ed Royce.
"Additionally, it presses the Administration to use all available tools to impose sanctions against North Korea and on countries and companies that assist North Korea in bolstering its nuclear weapons program," Royce, the House Foreign Affairs Committee chairman, said in a statement.
The vast majority of North Korea's business dealings are with neighboring China, which bought 90 percent of the isolated country's exports in 2013, according to data compiled by South Korea's International Trade Association.
The bill responds to concern in Congress about last year's cyber attack on Sony Pictures, which was blamed on Pyongyang, as well as what lawmakers see as the international failure to rein in the reclusive state's nuclear weapons program.
The measure is co-sponsored by Republicans and Democrats, including the leaders of the House Foreign Affairs Committee, Royce, and Democrat Eliot Engel.
A similar bill is likely in the U.S. Senate. It is expected to enjoy strong bipartisan support in both chambers.
The bill would authorize U.S. officials to freeze assets held in the United States of those found to have direct ties to illicit North Korean activities like its nuclear program, as well as those that do business with North Korea, providing its government with hard currency.
It would also target banks that facilitate North Korean proliferation, smuggling, money laundering, and human rights abuses, and target people who helped in the cyber attacks against the United States, Royce said.
A Chinese Foreign Ministry spokesman, Hong Lei, said frequent sanctions would not help resolve the North Korean issue.
Gareth Johnson, owner of China-based Young Pioneer Tours, which takes tourists into North Korea, criticized the bill.
"While we personally do not hold any accounts in the U.S., this is obviously not a great move ... (This) will just create a siege mentality when those of us involved in the country are trying to open things further."
SANCTIONS NOT SO STRONG - LAWYER
North Korea is already heavily sanctioned by the United States and United Nations for its arms programs and nuclear tests. President Barack Obama imposed new sanctions last year aimed at cutting the country's remaining links to the international financial system.
"Contrary to a common misconception, current U.S. sanctions against North Korea are weaker than our sanctions against Belarus and Zimbabwe," said Joshua Stanton, a Washington D.C. attorney and blogger who assisted with the drafting of the legislation.
"Other than some pin-prick, whack-a-mole sanctions against low and mid-level arms dealers and just one major North Korean bank, their strength is mostly a figment of the academic imagination."
Critics view the flow of hard currency into North Korea as potentially funding North Korea's nuclear weapons program, but it was not clear to what extent companies engaged in legal businesses would be affected by the proposed measures.
Such connections are difficult to track in China, and separating legal business from illicit can be even harder.
Bank of China , China's fourth biggest bank, said in May 2013 that it had shut the account of North Korea's main foreign exchange bank, Foreign Trade Bank, in the wake of international pressure to punish Pyongyang over its nuclear and missile programs.
The bill is intended to push the Obama administration, which contends the president already has sufficient authority to punish Pyongyang.
Sony said on Thursday that Amy Pascal would step down as co-chairman of Sony Pictures Entertainment after the hackers, angry about a movie she championed mocking North Korea's leader, exposed a raft of embarrassing emails between her and other Hollywood figures. (Additional reporting by James Pearson and Ju-min Park in SEOUL and Michael Martina in SHANGHAI; Editing by Doina Chiacu, Sandra Maler, Grant McCool and Dean Yates)