Chinese Premier says no intention of devaluing yuan to boost exports

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

But Li added: "China has no intention to devalue its currency to boost exports".

Mr 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.

He said the presidents of the two countries have talked to each other over the phone, and they have agreed to push forward China-U.S. ties, adding that President Trump and senior officials from the U.S. administration have explicitly stated that Washington will continue to follow the one-China policy.

While it was true that China and the U.S. had differences, "it is important for both countries to uphold strategic interests to enhance mutual understanding", he said.

Last year, the worldwide foreign exchange market experienced some volatility, and major currencies depreciated against the United States dollar, Li said at the annual press conference here, without directly referring to Trump's charge that China manipulated currency to boost its export revenues.

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

He argued that the renminbi's 7 per cent decline against the USA dollar past year was "quite modest" compared with that of other currencies.

"Almost every year I have heard a prediction of the Chinese economy having a hard landing", he said. He added that according to the evaluation on business environment in China made by the World Bank, China jumped 18 places past year compared with 2013.

Data in recent weeks has shown the economy got off to a strong start to 2017, though growth appears to still be heavily dependent on credit, infrastructure investment and the property market.

Premier Li said China's trade and investment ties with the United States created up to one million American jobs a year ago. "The closed door and beggar-thy-neighbour policies can not resolve problems". "We will take prompt and targeted measures to prevent them from further spreading", Li said.

The RMB has solid presence in the global currency system and the RMB exchange rate will remain generally stable, according to Li.

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. "We still have a good reserve of policy options and instruments at our disposal".

He had said the world must "remain committed to promoting free trade and investment through opening up".

"With that foundation in place, we believe there are bright prospects for China-U.S. cooperation", he said.

"As for the projected target of GDP growth this year at about 6.5 percent, I have read some foreign media describing it as a move by the Chinese government for moderate downward adjustment of GDP growth", Li said.

  • Elsie Buchanan