Vice-Premier He Lifeng held "candid, pragmatic and constructive" discussions with US Treasury Secretary Janet Yellen, the official news agency Xinhua reported on Saturday, as the pair wrapped up two days of talks in Guangzhou.

Xinhua said the two officials agreed that a working group would further discuss issues such as the balanced growth of the Chinese, US and world economies, as well as financial stability, sustainable finance, and cooperation in countering money-laundering.

“The Chinese side expressed grave concern over US economic and trade measures restricting China and responded fully to the issue of production capacity,” it added.

Yellen had said ahead of her visit that her top priority was addressing what she said was excessive Chinese production capacity in fields such as electric vehicles, solar panels and other clean energy technology. State media had described her comments as a pretext for protectionist US policies.

In a statement released after the talks, Yellen said the exchanges "will facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity, and I intend to use the opportunity to advocate for a level playing field for American workers and firms."

She characterised the discussions as productive and frank, and said capacity issues had been discussed for two hours.