China will reduce direct government intervention in its vast industrial sector, the industry minister said, as Beijing seeks to ease concerns about its industrial policy, core to Washington's complaints in the Sino-U.S. trade war.

"We will gradually reduce the government's micro-management and direct intervention, in order to allow the market to effectively decide resource allocation and support the development of the manufacturing industry", Miao Wei, minister of industry and informational technology, said.

But China will continue to encourage higher-value production, he said.