China's prime minister eases USA tensions ahead of expected Donald Trump summit

Speaking at an annual media conference, Mr Li said China "does not want to see any party compelled to take sides under the influence of a Cold War mentality" - a reference often reserved to describe USA foreign policy.

Li said it is China's consistent position to champion globalization and support free trade.

He was speaking at a press conference after the close of the annual session of the National People's Congress, China's Parliament, fielding a wide range of questions from domestic issues to foreign affairs.

"No matter what bumps this relationship may run into, we hope this relationship will continue to move forward in a positive direction".

Diplomats from the two countries are already engaged in discussing a face-to-face meeting between the Chinese and USA presidents.

If Trump fulfils his threat to call Beijing a currency manipulator it could lead to trade sanctions.

"We are committed to make China a highland of opening up and a popular destination of investment, and share the development opportunities with the world", Li said.

"But I believe our economic performance in the last few years... should suffice to put such hard landing prophecies to a stop".

While many analysts doubt the strength and consistency of Chinese official data, even some veteran China sceptics agree that economic activity did pick up previous year, buoyed by heavy government stimulus in the form of record bank lending and billions in government infrastructure spending, as well as a speculative housing boom.

Last year, yuan depreciated by about 6.6 per cent.

China targets about 6.5 percent economic growth this year, which is slower than the 6.7 percent expansion achieved in 2016.

He added that the depreciation of the Chinese yuan against the dollar was quite modest.

Beijing this month announced a lower-than-expected 7 per cent defence budget increase for this year, shortly after Trump promised a "historic" increase in United States military spending of more than 9 per cent, or US$54 billion.

Data in recent weeks have shown the economy started strongly in 2017, though growth appears to still be heavily dependent on credit, infrastructure investment and the property market. Many already believe that a massive bank bailout may be inevitable.

China is projected to see steady growth without the likelihood of a hard landing, Premier Li Keqiang said at a news conference on Wednesday, adding that the nation remains "an important growth engine" for the global economy.

Equally Premier Keqiang stressed the importance of taking seriously risks the country faces in the domestic front, and particularly in the worldwide sector.

Li said Americans stood to lose the most in a tug-of-war over between the world's top two economies, citing studies by overseas think tanks.

There will not be eruption of systematic financial crisis in China and it has many policy tools available to resolve financial risks.

Li also struck a confident tone in the country's financial stability, ruling out the possibility of systemic risks as "the country has plenty of policy options at its disposal".

  • Leroy Wright