China aims to smooth out Trump rows before U.S. summit

"It says that should a trade war break out between China and the United States, it would be foreign-invested companies, in particular USA firms, that would bear the brunt of it", he said.

"We don't want to use the exchange rate to boost exports", Mr Li said, adding that it would be detrimental to the government's efforts to bolster the competitiveness of Chinese companies.

"No mater what bumps the China-U.S. relationship may run into, we hope this relationship will continue to move forward in the positive direction", he said.

Complicating his mission to Beijing are China's strenuous objections to the initial deployment to South Korea of a US missile defense system that have strained relations between Seoul and Beijing and sparked a snowballing economic boycott against South Korea among some Chinese.

U.S. President Donald Trump has attacked China on issues ranging from trade to the South China Sea and what he perceives as China's lack of interest in reining in nuclear-armed North Korea.

But Li said the world's two largest economies should work together to "uphold strategic interests".

Li said China does not want to see a trade war between China and the United States because that will result in no benefits to bilateral trade.

"Almost every year I have heard a prediction of the Chinese economy having a hard landing", he said.

China has cut its economic growth target this year to around 6.5 percent from its 2016 goal of 6.5 to 7 percent, while vowing to push through reforms to tackle rising debt and guard against financial risks. He added that according to the evaluation on business environment in China made by the World Bank, China jumped 18 places previous year compared with 2013.

Figures released in recent weeks have shown that the economy got off to a strong start this year, though growth appears still heavily dependent on credit, infrastructure investment and the property market.

Dismissing claims from Trump and other senior USA administration officials that China was stealing American manufacturing jobs, he said trade with China created more than 1 million jobs in the United States past year alone. "We will take prompt and targeted measures to prevent them from further spreading", Li said.

"This policy constitutes the political foundation of China-U.S. relations, which has remained unshaken in spite of the changing circumstances, nor can this foundation be undermined", Li said. "We still have a good reserve of policy options and instruments at our disposal".

Globalization and world peace, development and cooperation are inseparable, Li said, adding that closing the door and adopting beggar-thy-neighbor policies would not solve any problems.

The government needs to exercise careful regulation in an open-minded and accommodating way to enable the healthy development of new business forms boosted by the initiative, he said.

"China's foreign exchange reserves are way above the global standard", said Li.

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