Chinese Premier Li Keqiang today warned the US against any trade war, saying American firms would be the first to "bear the brunt" if such a war breaks out.
His comments came ahead of Chinese President Xi Jinping's key summit with his US counterpart Donald Trump, who has labelled China a currency manipulator and threatened to slap hefty tariffs on its imports.
"We do not want to see any trade war breaking out between the two countries. That would not make our trade fairer," Li said at his annual news conference at the end of the annual meeting of China's parliament.
Last year, the United States' deficit in trade in goods with China reached USD 347 million and Trump has promised to close that gap, which he has also attributed to what he calls China's rigged currency exchange policies.
Li said that a trade war of tit-for-tat protectionist measures would ultimately damage the American economy.
"If there were a trade war, it would be foreign-funded companies, particularly US firms, that would first bear the brunt," he said, citing an article written by an international think-tank.
Li's comments came as officials of both the countries said the first meeting between Xi and Trump may take place next month in Florida. Trump plans to host Xi for a summit at his Mar-a-Lago estate.
Li said the diplomats of both the countries are preparing for the face-to-face meeting between the two leaders.
"No matter what bumps the China-US relationship may run into, we hope this relationship will continue to move forward in the positive direction," Li said.
He said China believes the people of both countries have the wisdom to properly manage their differences, adding that "there is a need and there are also conditions for us to continue to expand our common interests."
About differences between the two countries, he said. "Whatever differences we may have we can sit-down and talk to each other to find solution. For those differences which cannot be resolved for the time being and anytime soon we can shelve them to continue to focus on expanding our common interests which I believe is the right choice".
In the process, the percentage of differences overall China US relations will continue to come down, he said.
Chinese Premier also spoke about the Taiwan issue.
Li, the second ranking official of the ruling Communist
Party of China (CPC), said both Trump and Xi have spoken to each other over phone during which the US President had "explicitly" said that US will continue to follow the 'One China' policy.
"This policy constitutes the political foundation of the China-US relations which has remained unshaken in-spite of the changing circumstances and nor this foundation is undermined," he said.
"With that foundation in place, we believe there are bright prospects for China-US cooperation," he said.
Trump had earlier riled China by saying he would negotiate with Beijing on its 'One China' policy.
Xi spoke to Trump only after he agreed to abide by the policy followed by all the US administrations in recent years on Taiwan. China views Taiwan as a rebel province and wants reunification of the island with the mainland.