China and the US are currently locked in an ongoing trade war as each country has introduced tariffs on goods traded between each other. Trump has promised to fix China's "longtime abuse of the broken international system and unfair practices".
Addressing a press conference at the White House on Wednesday, Trump said, "China would have superseded us in two years as an economic power; now they are not even close."
The US is currently the world's number one economy, while China has emerged as the second largest after replacing Japan.
The President claimed that after he expressed his concerns about the 'Made in China 2025' policy to the Chinese, they dropped the programme.
"China got rid of their China '25 because I found it very insulting. I said that to them. I said, 'China '25 is very insulting because China '25 means in 2025, they are going to take over, economically, the world," Trump said, adding, "I said, 'that's not happening."
'Made in China 2025' is a strategic plan of the communist giant under which it plans to increase the domestic content of core materials to 40 per cent by 2020 and 70 per cent by 2025.
According to observers, it as an attempt to move the country's manufacturing up the value chain and become a major manufacturing power in direct competition with the US.
Trump is expected to meet Chinese President Xi Jinping later this month at the G-20 meeting in Argentinian capital Buenos Aires where trade is expected to be among the main topics discussed.
Though negotiations between the US and China have reached a deadlock, Trump suggested that he expects a "good meeting" with his Chinese counterpart.
"We have gone it way up, they (China) have gone down. I don't want them to go down. We shall have a good meeting and we are going to see what we can do. We are going to try and make a deal with China because I want to have great relationships with President Xi, as I do, and also with China," he said.