A Chinese court handed Ni Yulan, the disabled activist jailed earlier this year, a two-month reduction in her prison term on Friday, but upheld a conviction for "picking quarrels", her lawyer said.

The court cut Ni's sentence to 30 months in jail after overturning a fraud conviction, but rejected her appeal against the second charge, her lawyer Cheng Hai told AFP by telephone after a hearing in Beijing.

The court also rejected an appeal against Ni's husband Dong Jiqin's conviction and sentence to two years in jail on the same charge of "picking quarrels", Cheng said.

"At least Chinese law is improving. If we all persevere, there can be results. (But) this is basically a fake case," Cheng said, adding that he planned to appeal again.

Lawyers for Ni and her husband have said all along that the charges were trumped up to silence the 52-year-old rights defender, who is confined to a wheelchair due to injuries during an earlier stint in jail.

She and her husband were detained in April 2011 as China rounded up hundreds of activists amid calls for protests akin to the Arab Spring popular revolts that erupted across the Middle East.

The activist spent much of the trial in December lying on a bed in the courtroom due to her poor health and needed a respirator to breathe.

Her sentencing in April this year sparked an international outcry, and the United States and European Union have both called for her release. The US said Friday it was "deeply concerned" about the case and Ni's health.

Trained as a lawyer, Ni began providing legal aid to residents facing home demolitions after her own courtyard home in central Beijing was requisitioned in 2001.

The next year she was sentenced to one year in jail for "obstructing official business" and disbarred as a lawyer.

After her release she was confined to a wheelchair, which the rights group Amnesty International blamed on abuse while in prison.

In 2008, Ni and her husband began living on the street after their home was demolished, and Ni received another jail sentence of two years for "harming public property".

After a brief period of freedom in 2010, police relocated her and her husband to a hotel and later requested them to pay the 69,000 yuan ($11,000) bill, which they refused to do.

Ni attended Friday's hearing, as did her daughter Dong Xuan, 27, who was placed under effective house arrest after her parents' trial and remains under police surveillance.

There was a heavy police presence outside the court in Beijing. Dong told AFP by telephone security officials had driven her away from the area immediately after the hearing, possibly to prevent her from speaking to journalists.

"They wouldn't let me answer the phone," which had rung two dozen times, she said, speaking while she ducked away briefly from the officials minding her.

Dong said it had seemed unlikely during the hearing that the convictions of picking quarrels would be overturned because her parents' requests to see the evidence for those decisions had been refused.

The lawyer Cheng said Ni's condition remained poor but had improved since her last appearance in court, and she was able to sit up in her wheelchair during the hearing rather than having to lie down.

Before the appeal hearing, he said he had submitted witness statements from the alleged fraud victims to support the legal challenge.

"They have not only provided written testimonies that they donated the funds voluntarily and were not defrauded (but also) video recordings," he said.

Cheng said he had filed in May separate lawsuits against the Beijing district security bureau and court that had dealt with Ni, but had not heard any news about those cases.

Representatives from nearly a dozen Western embassies waited outside the courthouse on Friday waiting to hear the results.

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