President Xi Jinping on Tuesday told visiting German Chancellor Olaf Scholz that China and Germany should be vigilant against rising protectionism and view the issue of production capacity objectively.

Xi said the industrial and supply chains of the two countries are deeply intertwined and their markets highly interdependent, and that co-operation was not a "risk" but a guarantee for stable ties and an opportunity for the future.

"We must view and develop bilateral relations in an all-round way from a long-term and strategic perspective," the president said.

Scholz arrived in China on Sunday for a three-day visit, his first since his government launched a "de-risking" strategy last year to avoid relying excessively on Chinese suppliers.

His visit also coincided with European Union concerns about the threat to European businesses from Chinese goods, including electric vehicles and other green technologies, flooding its markets.

Speaking to students at Tongji University in Shanghai on Monday, Scholz called for fair competition in trade relations with China, while urging the EU not to act out of protectionist self-interest.

During his meeting with Xi, Scholz also touched on areas where he said the two countries could cooperate, including climate change.

The two leaders also discussed Ukraine, with Xi proposing four principles to prevent the crisis from spiralling out of control and to restore peace at an early date.

"First, we should prioritise the upholding of peace and stability and refrain from seeking selfish gains. Second, we should cool down the situation and not add fuel to the fire.

"Third, we need to create conditions for the restoration of peace and refrain from further exacerbating tensions. Fourth, we should reduce the negative impact on the world economy and refrain from undermining the stability of global industrial and supply chains," Xi said. (Agencies)