Chinese Premier Li Keqiang says "unilateralism" does not offer solutions, a day after US and China swapped tit-for-tat trade tariffs, adding further, Beijing will not use yuan depreciation to boost exports.

"It is essential that we uphold the basic principles of multilateralism and free trade," Li Keqiang says at the "summer Davos". (Reuters Archive)

Chinese Premier Li Keqiang railed against "unilateralism" on Wednesday in a veiled allusion to the trade fight with the United States, and threw his weight behind further opening of the world's second largest economy.

Speaking at the summer session of the World Economic Forum in the eastern city of Tianjin, Li said problems must be worked out through consultations, a day after China and the US swapped tit-for-tat tariffs.

"It is essential that we uphold the basic principles of multilateralism and free trade," Li said in his speech at the "summer Davos".

"For any existing problems they need to be worked out through consultation," Li said, adding that "unilateralism" does not offer solutions.

Trade war deepens

The trade war between the world's two biggest economies deepened on Monday when Donald Trump announced he would push ahead with tariffs on $200 billion in Chinese goods.

After Beijing decided to retaliate with duties on $60 billion in American products, Trump accused China of seeking to influence midterm congressional elections by taking aim at his political base.

The tariffs follow a recent invitation from Treasury Secretary Mnuchin to hold talks with his Chinese counterpart but Beijing warned Tuesday that the latest developments had led to "uncertainty".

China's yuan, also known as the renminbi, has steadily depreciated this year, causing Trump to accuse Beijing of deliberately manipulating the currency to offset the new tariffs.

Li denied the claim, saying "there is no evidence" of that happening.

"For China, depreciation holds more negatives than positives," he said. "China will not use renminbi depreciation to stimulate exports."

Opening up of economy 

The promised opening up of the economy also would pick up, with Li saying China will continue to reduce tariff rates and unreasonable fee burdens. 

"We will continue to deepen comprehensive reform," he said.

While Beijing has long proclaimed itself the pillar of globalisation and free trade, foreign companies operating in China say such lofty words are far from reality.

But Li said all firms enjoyed a level playing field, adding: "Chinese and foreign companies, as long as they are registered, they will be treated equally without discrimination."

Source: AFP