China's top diplomat Wang Yi on Saturday blasted the US reaction to what Washington has called a Chinese spy balloon as "hysterical and absurd."

Addressing a gathering of world leaders at the Munich Security Conference, Wang considered that US President Joe Biden's administration has a "misguided" perception of Beijing, accusing Washington of trying to "smear" the Asian giant.

"There are many balloons from many countries in the sky. Do you want to down each and every one of them?" he asked, urging the US "not to do such preposterous things simply to divert attention from its own domestic problems."

Washington has been in a state of alarm since a huge white balloon from China was spotted in the US airspace, before being shot down just off the east coast on February 4.

Beijing denies it uses spy balloons and says the craft was for weather research. It accused Washington of sending its own espionage balloons over its territory -- which the US has denied.

The spat had led US Secretary of State Antony Blinken to postpone a rare visit to China.

With Blinken also in Munich for the conference, all eyes are on whether both sides succeed in setting up a meeting.

Asked if he was planning a meeting with the US delegation, Wang said Washington had the wrong view of China as a serious geopolitical challenge and a threat to the United States.

"This is a misguided perception of China and with this perception, the United States is using all of its means to smear and clamp down China, and is co-opting other countries to do the same," China's top diplomat said.

Citing the US Chips Act as an example, Wang said it was "100 percent protectionism, 100 percent selfishness, 100 percent unilateral action."

"We hope the US side would take a pragmatic and proactive attitude towards China and work together with China to return our bilateral ties to accept a track of sound development," he expressed.

After four years of tense relations with China under his predecessor Donald Trump, US President Joe Biden has made a priority of resetting relations with Beijing -- which he describes as Washington's biggest competitor.

But tensions flared last year after Nancy Pelosi, then leader of the US House of Representatives, made a provocative visit to Taiwan. According to a Financial Times report published on Friday, the situation may be tested again soon, with a high-level Pentagon official arriving in Taiwan for a visit.

Read more: US to take down any object posing threat: Biden

US troubled by deepened China-Russian relationship

In Munich, US Vice President Kamala Harris said the US was "troubled that Beijing has deepened its relationship with Moscow since the war began."

NATO Chief Jens Stoltenberg claimed that "Beijing is watching closely to see the price Russia pays, or the reward it receives for its aggression."

"What is happening in Europe today could happen in East Asia tomorrow," he added.

Beijing to continue pressing for Ukraine peace negotiations

However, Wang told German Chancellor Olaf Scholz earlier that Beijing believes that a ceasefire will be reached in Ukraine soon and that Berlin would contribute positively to the peace process.

"China has always been committed to peace, advocating for reconciliation, promotion of peace talks as well as an early ceasefire and an end to hostilities. We hope that Germany will play a constructive role and help ease tensions," he affirmed.

On the sidelines of the Munich Security Conference, the Chinese official promised Scholz that Beijing would continue to press for Ukraine peace negotiations "however tough the situation may get."

Wang warned that a prolonged crisis would raise the stakes for Europe and increase the likelihood of "incidents" like last September's blasts at the Nord Stream natural gas pipelines beneath the Baltic Sea.

Elsewhere in his remarks, China's top diplomat announced that Beijing will develop and present a document outlining its views on the Ukraine situation by the end of February.

Read more: China, France agree to contribute to Russia-Ukraine peace process