Speaking during a roundtable with EU chief Ursula von der Leyen on Thursday, Li insisted that "China is by no means doing what some call a subsidies policy or fiscal subsidies".

"China is not as rich as Europe, and we can't afford it," he said.

"We would not be stupid enough to use the fiscal funds accumulated through the government and the hard work of our people to sell our products to foreign consumers," Li added.

Von der Leyen and European Council President Antonio Costa were in Beijing on Thursday for a summit dominated by tensions between the EU and China over trade and Russia's war in Ukraine.

Chief among the bloc's concerns was its yawning trade deficit with China, which stood at around $360 billion last year.

The EU has also raised fears that Beijing's vast subsidies to its industry could help it undercut European competitors with a flood of cheap exports to the continent.

Li, China's number two official, rejected those claims in a roundtable with the EU's leadership.

"Some enterprises, especially manufacturing enterprises, feel more deeply that China's manufacturing capabilities are too strong, and Chinese people are too hardworking," the Chinese premier said.

"Factories run 24 hours a day," he said.

"Some people think this will cause some new problems in the balance of supply and demand in world production," the Chinese premier said, admitting: "We see this problem too."

Li also rejected claims the Chinese economy -- plagued by sluggish growth for years now -- was in dire straits.

"Of course, there are difficulties and challenges, but it is difficult for us to say that China's economy is in a downturn," he said.

"Our GDP growth rate is always above five percent," he insisted.