China would "welcome" the creation of a free trade agreement with the European Union, its largest trading partner, but it could "take time" to be established, Premier Li Keqiang said on Friday.

As the two sides remain entangled in escalating trade frictions, led by the EU's probe into and punitive tariffs on China's solar panel goods, the premier called on both parties to consider establishing a regional trade arrangement.

"If China and the EU could set up a regional FTA, the impact on both sides and worldwide would be far-reaching and profound," said Li, during a meeting with delegates at the Third Global Think Tank Summit in Beijing.

But as China and the EU remain at different stages of their development, it could take a while for them to put such a FTA in place," said Li.

"We need both patience and willingness," he added.

His comments came as China and the EU remain at loggerheads over a raft of disputes covering a wide range of goods, from solar panels and telecom equipment, to wine and steel pipes.

Earlier this month, the European Commission, the EU's executive arm, imposed an average tariff of 11.8 percent on solar panel imported from China, and the tariff will rise to more than 47 percent in August if negotiations fail to resolve the dispute.

Li has consistently maintained that such investigations cannot benefit the EU, while at the same time they brought harm to China.

The EU is China's largest trading partner, and a major source of foreign direct investment into China.

China's outbound direct investment in the EU, particularly in recent years as the continent suffered ongoing debt problems, has also risen sharply.