Beijing also said the two countries share common interests in promoting globalisation and steering the world economy towards betterment.
While speaking at the annual summit of the World Economic Forum in Davos on Tuesday, PM Modi had compared protectionism to terrorism and indirectly attacked US President Donald Trump's "America First" policy.
PM Modi said many countries were becoming inward focused and globalisation was shrinking and such tendencies can't be considered lesser risk than terrorism or climate change.
"We have noticed Prime Minister Modi remarks against protectionism and his remarks showed that globalisation is a trend of the times. It serves the interest of all countries including developing countries," Chinese Foreign Ministry spokesperson Hua Chunying said.
"(In) fighting against protectionism and promoting globalisation, China and Indian share a lot of common interests," Mr Hua added.
Mr Hua recalled Chinese President Xi Jinping's last year speech at Davos in which he had spoken against protectionism.
"China would like to enhance the coordination and coordination with all countries including India to steer the economic globalisation towards benefitting world economic growth and the well-being of all countries," he said.
"Our position is clear. India is a big neighbour of China. As two largest developing countries and as two closed neighbours, we, of course, hope that we maintain sound and steady development of our bilateral relations. It serves the interest of two sides," he added.
"We look forward to working with India to enhance our communication, mutual trust and properly handle our differences and ensure the sound and steady development of our relations. I believe this is the aspiration of two people in our countries." Mr Hua also said.