The comments by a Chinese Commerce Ministry spokesman came after US President Donald Trump tweeted that there has been "no folding" in the discussions.
Spokesman Gao Feng also told reporters that China hopes the US will take "concrete action" to resolve a case involving Chinese tech company ZTE, which Washington hit with a crippling ban on buying from US suppliers after it violated US sanctions, AP reported.
US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are leading talks in Washington on Thursday and Friday aimed at heading off a trade war between the world's two biggest economies.
"We do not want to see the escalation of the trade frictions between China and the US," Gao said at a weekly briefing. "Of course, we are also prepared for all possibilities."
The Trump administration has threatened to impose tariffs on up to $150 billion in Chinese imports to punish Beijing over trade practices requiring American companies to hand over technology in exchange for access to the Chinese market. China has counterpunched by targeting $50 billion in US products.
ZTE's seven-year US business ban, ordered last month, led the company to say it was ceasing operations because it cannot get the parts it needs for manufacturing telecommunications equipment and smartphones. Earlier this week, Trump surprised many by hinting in a tweet that he wanted to find a way to keep the company afloat.
The two countries are reportedly attempting a swap: Relief for ZTE in return for Beijing dropping plans to impose tariffs on US farm products.
"We will resolutely defend our own interests and will not trade our core interests," Gao said, when asked about the reports.
Trump tweeted on Wednesday, "Nothing has happened with ZTE except as it pertains to the larger trade deal."
He also said the US has not yet seen China's demands and added, "There has been no folding as the media would love people to believe."