China's Premier talks up free trade, vows cooperation

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Chinese premier Li Keqiang warned the United States on Wednesday that American companies would be the first to be hit in the case of a trade war between the two nations.

Mr Li, China's second most senior leader, is in charge of economic issues and was speaking at a news conference following the close of the annual legislative meeting.

Foreign companies stood to lose the most from any such battle between the world's two largest economies, Li warned.

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

The outspoken Republican president reserved some of his harshest campaign rhetoric for Beijing on his way to the White House, accusing China of being a currency manipulator and threatening to slap huge tariffs on Chinese imports to the US.

China does not hope to be involved in any trade war either, because that is not good for the stability of the global trade and currency systems, Li added.

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

Li noted that China-U.S. ties have been going forward despite various twists and turns, but said he feels optimistic about future China-U.S. relations, because "after several decades of growth of bilateral relations, the two countries now share a wide range of common interests". 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.

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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.

"I should point out that 6.5 percent growth is not low speed and will not be easy for us to meet".

Li said China will look to cut taxes and fees on companies by 1 trillion yuan ($144.67 billion) this year, while adding that the government has enough policy tools to handle any risks.

Premier Li said China's trade and investment ties with the United States created up to one million American jobs a year ago. "We will take prompt and targeted measures to prevent them from further spreading", Li said.

"China will continue to open to the outside world", the premier 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.

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

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