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What would a trade war between China and the United States look like?

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The closing meeting of the Fifth Session of the 12th Chinese People's Political and Consultative Conference at the Great Hall of the People

That would increase the return on USA bonds and other financial assets, drawing more money out of China.

Though there are still differences between China and the United States over issues such as jobs, the exchange rate, and security, "it is important for both countries to uphold strategic interests, sit down to talk to each other, so as to enhance mutual understanding and trust", he said.

"China hopes that no matter what bumps this relationship may encounter it will continue to forge in the right direction", Li added.

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.

His comments came ahead of Chinese President Xi Jinping's key summit with Trump, who has labelled China a currency manipulator and threatened to slap hefty tariffs on its imports.

China still has the largest foreign exchange reserves in the world, sufficient to pay for imports and repay short-term external debts, Li said.

"We don't wish to see a trade war breaking out between the two countries".

The Government is hoping to expand GDP by about 6.5 per cent this year - a slowdown from 6.7 per cent growth last year.

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

Economists say that while Beijing suppressed the yuan's value in the previous decade, more recently market pressures are weakening the currency against the dollar and it would fall further without central bank intervention.

The economy ultimately grew 6.7 percent previous year.

Private investment also rebounded over the first two months, which authorities attributed to policy support and a better economic environment compared to a year ago.

Globalization is inseparable to peace, development and cooperation, he said, adding that closing the door and adopting beggar-thy-neighbor policies will solve no problems.

China will open its markets wider despite "frictions in trade and investment", Mr Li said.

"China is willing to work with other countries to improve the global governance system", he said.

Chinese Premier Li Keqiang gives a press conference at the Great Hall of the People in Beijing, capital of China, March 15, 2017.

But Li made no mention of the Communist Party's national congress to be held later this year, which he said earlier would be his government's top priority.

"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.

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