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"The business tax imposes a tax on tax, while the VAT levies only on the value added, which is fairer and more precise," said Li Wanfu, director of the Institute of Tax Science (ITS), a research arm of China's State Administration of Taxation.

On China-Germany ties, Li called on both sides to improve the alignment between the "Made in China 2025" and "German Industry 4.0" strategies, advance cooperation in third-party markets in high-speed rail and other fields, in order to promote their economic growth.

Xi explained that developing modern agriculture, increasing farmers' income and building a new socialist countryside are the three major tasks in rural development.

To accusations that China is "not abiding by international law" and "undermining the rule-based international system," Liu said that China made a clear declaration in accordance with the UN Convention on the Law of the Sea in 2006 to exclude compulsory arbitration on sovereign disputes and maritime delimitation.

The two sides also agreed to broaden people-to-people and cultural exchanges in various fields, develop understanding-building projects, deepen cooperation in education, tourism, local-level and sports, and increase the scale of exchange students, so as to consolidate the social foundation for the long-term and steady development of bilateral ties.