Angela Merkel China visit
German Chancellor Angela Merkel (L) chats with Chinese Premier Li Keqiang during the signing ceremony at the Great Hall of the People in Beijing on July 7, 2014. Reuters/Andy Wong

China’s growth in the second quarter of the year saw some improvement, but the world's second-largest economy will still need reforms to boost its growth rate, China’s Premier Li Keqiang said Monday as German and Chinese leaders signed helicopter and automobile deals.

Li spoke at a news conference with the German Chancellor Angela Merkel, who reached Beijing on Sunday for her seventh visit, and said that despite the improvement noticed in China's economic growth for the second quarter, the Chinese economy still faced tough challenges, according to Reuters. While economic analysts expect China’s second quarter to grow 7.4 percent, Li promised that his government will focus specific measures to increase that percentage.

"China's economic performance in the second quarter has improved from that in the first quarter. However, we cannot lower our guard against downward pressures," Li said, adding, "We will keep up our composure and not adopt strong stimulus. Instead, we will increase the strength of targeted measures.”

Beijing's 7.4 percent first-quarter of economic growth -- down from 7.7 percent in the year-earlier period -- was the lowest in 18 months and increased fears of slowing momentum. China had launched a mini-stimulus package to revive growth, which Li had targeted to stabilize at 7.5 percent growth for this year. So the Chinese authorities cut taxes, have asked regional governments to accelerate spending and requested banks to start circulating their reserves into the economy.

Chinese officials signed several deals with Germany, China’s third largest trade partner, on Monday, including ones to buy German helicopters and set up an automobile manufacturing base in China for Volkswagen AG (OTCMKTS:VLKAY), which already employs close to 7,300 people in the country, according to Xinhua.

Both countries, which are two of the world’s biggest exporters, did about $193 billion worth of business together last year. Merkel's visit to China follows Chinese President Xi Jinping’s visit to Berlin in March where deals to strengthen ties with Daimler AG (OTCMKTS:DDAIF) and BMW AG (ETR:BMW) were signed, the Associated Press reported.