He said uncertainty was on the rise amid slower global growth and protectionism, but these “should not cause panic because there are still many positive factors in the global economy”.
China’s economy is closely watched in Australia because it is the largest customer of iron ore and coal, Australia’s two largest exports.
The Chinese government set its lowest economic growth target in three decades, of 6 to 6.5 per cent, at the National People’s Congress three weeks ago, where Mr Li had talked of “severe challenges”.
His remarks on Thursday came despite China’s statistics bureau releasing data this week showing Chinese industrial profits fell 14 per cent in January and February, the worst fall in a decade.
Chinese exports had fallen 20 per cent in February, attributed to punitive tariffs applied by the US amid the trade war.
But Mr Li said “the consumption of the Chinese people” was the major driver of the Chinese economy instead of external factors.
Beijing has unveiled 2 trillion yuan in company tax and fee cuts, which Mr Li said was a “major step” in countering a slowing economy and would benefit both private and state companies.
He repeated that China wouldn’t “repeat the old path of massive stimulus”.
The Premier also pitched China’s role in Asia, saying the Asian economic miracle had occurred because of security and stability in the region and said mutual trust must be deepened.
“China is a part of the world but more importantly a part of Asia.”
In his speech Mr Li made no mention of tense trade war negotiations taking place with US.
US trade representative Robert Lighthizer and Treasury Secretary Stephen Mnuchin began a two-day meeting in Beijing with Chinese vice premier Liu He on Thursday.
The talks are crucial to whether a meeting between US President Donald Trump and Chinese President Xi Jinping can be held – and a trade deal to end the tariff war signed.
Whether Washington will strike a deal will depend on whether Trump’s negotiators believe Chinese pledges to level playing field for foreign investors and improve intellectual property protection.
Mr Li said a tougher patent law that increases punishment for IP violations was being developed. Beijing would seek input from foreign investors on regulations surrounding a Foreign Investment Law that will start on January 1.
More details on which new sectors of the Chinese economy will be open to foreign investors will be released in June, he said.
There would be more opening up in telecommunications, medical services, education, transport, infrastructure, energy and resources and the financial services sector.
“Companies of different ownership and different origins will all be treated as equals,” he said.
Kirsty Needham is China Correspondent for The Sydney Morning Herald and The Age.