The plea for help from EU companies comes during a high-level visit by EU foreign relations chief Catherine Ashton to China.

The European Union Chamber of Commerce in China in its annual survey out Wednesday (1 September) listed a series of technical barriers to EU investment in the airline reservation, automotive, construction, insurance, oil refinery, research and innovation and telecommunications sectors.

In one example, EU companies seeking a wholesale licence to sell petrol in China must first own a refinery and get an import licence. But another law forbids foreign firms from owning a majority stake in Chinese refineries, while in practice, Chinese bureaucracy has never issued an import licence to a foreign company.

In another example, Chinese state purchases of IT gives nakedly preferential treatment to products developed by native researchers.

As a result EU firms invested just €5.3 billion in the vast country last year, amounting to less than 3 percent of EU foreign investments, the study noted.

The paper took China's leaders to task for failing to live up to commitments in the World Trade Organisation. The business lobby's chief, Jacques de Boisseson, also gently criticised the authoritarian country's top economic official, Premier Wen Jiabao, who in April said foreign firms can compete on a level playing field with Chinese ones.

"I do believe the words of Premier Wen when he says that foreign investment is welcome," Mr de Boisseson told Reuters. "[But China] would probably be satisfied with a lower level of foreign investment and a higher share for Chinese companies."

The plea for help - which, among other things, called for "a more coherent approach" to China diplomacy from EU member states, whose policies it dubbed "fragmented and uncoordinated to the detriment of European business" - comes during a high-level visit by EU foreign relations chief Catherine Ashton to China.

Ms Ashton is not responsible for trade but did on Wednesday discuss a wide-ranging EU-China strategic partnership with the country's most senior foreign affairs official, Dai Bingguo, and will on Thursday meet Mr Wen.

"China expects the EU to treat it as an equal," Mr Dai told Ms Ashton, according to the Xinhua state news agency.

Ms Ashton so far on her trip has also visited EU pavilions, such as the Bulgaria and Romania stands, at the Shanghai "Expo 2010" fair and toured an ethnic Miao village in the country's Guizhou province. "I have seen the beauty of Beijing and the splendor of Shanghai, and I have the great opportunity to see this part of China," she told Xinhua.

The EU foreign affairs chief declined to go to the re-launch of Middle East peace talks taking place in Washington on Thursday in order to complete her China itinerary, attracting criticism from some quarters.

"If the EU wants to play an international role compatible with its political and economic weight, it must clearly understand its priorities!" Portuguese centre-right MEP Mario David said in a statement on Wednesday.

EU, China to hold their first high level 'partnership dialogue'

After a day spent visiting the EU pavilions at the World Expo in Shangai, Ms Ashton will co-chair the first EU-China high-level strategic dialogue with state councillor Dai Bingguo on Tuesday and Wednesday in the Guiyang region.

During the meeting they will "address issues of concern and mutual interest," Ms Ashton's office wrote in a statement. These include foreign and security matters such as the Korean Peninsula, Iran, Africa and piracy in the Gulf of Aden.

"Today, EU-China co-operation and exchanges form a rich tapestry of interwoven issues and interests. Inevitably, a relationship such as ours needs constant attention if we are to maintain and build confidence," Ms Ashton said in a written interview with a state-owned newspaper China Daily, published Sunday.

"We need to communicate – to speak frankly – to exchange ideas and to recognise there have been and will be some difficult moments as our relationship matures. That is why I am in China this week, to coordinate closely our policies and to develop further our cooperation on important international issues," she added.

She went on to highlight some of the areas of dispute including trade and the environment. The EU has upbraided China several times for not protecting intellectual property rights while EU business leaders have increasingly complained about the obstacles they face to doing business in the country. Meanwhile, Beijing has taken a tough line on environmental issues arguing that countries that are catching up on the industry front should not have to pay for the environmental sins of fully industrialised countries.

"Part of China's success comes from the open global economy with common rules. If this system is going to continue it needs active efforts by all the important countries – and of course China is now one of the most important ones. This is true in trade, but it is also true in the area of banking, security and the environment," Ms Ashton said.

With the EU-China summit on the agenda on 6 October, Ms Ashton will meet Prime Minister Wen Jiabao and foreign minister Yang Jiechi in Beijing during Thursday and Friday.

The WTO's decision will change the way EU deals with Chinese imports

The Reuters news agency says that in an interim report to be published next month, the WTO panel will say that the EU discriminated against Chinese exporters of screws and bolts compared to exporters from other countries when it applied a single anti-dumping duty based on the national principle.

Instead of imposing a blanket duty for the whole country, the EU will in future have to set individual duties for companies on case-by-case basis in order to comply with the WTO position.

The EU already uses the individual duty model in cases of countries it considers not to be market economies, such as Cuba, Albania or Vietnam.

"The amount of money at stake here is not huge in this case, but it will have repercussions on other anti-dumping cases," a person acquainted with the report told the Financial Times.

"It's a big victory for China as it takes out one of the pillars of EU anti-dumping activity against China," a similar contact told Reuters.

The WTO report will not backed China's claim that Brussels made unfair comparisons between high-end EU fasteners used in the car and aviation industries and low-grade Chinese screws and bolts sold in hardware shops, however.

China raised the case against the EU, its first since joining the organisation in 2001, in July 2009. Chinese imports in the disputed case, worth around €575 million a year, were slapped with duties of up to 85 percent when entering the EU market.

In May 2010 the WTO set up an expert panel in another case brought by China against the EU on Chinese-made footwear. The Chinese authorities said when filling the complaint that the EU measures "violated various obligations under the WTO, and consequently caused damage to the legitimate rights and interests of Chinese exporters.

The EU in June has opened another anti-dumping case over below-cost Chinese imports of ceramic tiles, which saw the Chinese ministry of commerce threaten to punish EU-made iron and steel fasteners in return.

Tobacco products topped the list of fake goods coming into the EU

In 2009, EU customs officials took action in 43,500 different cases where they suspected counterfeited goods were being brought into the EU, a fall on 49,000 cases in 2008, according to Thursday's report (22 July).

Officials were quick to attribute the decline, the first in a decade, to the general fall in world trade last year however, rather than reduced product piracy levels, with 64 percent of the IPR infringing articles originating from China.

Of the main categories of detained products, cigarettes accounted for 19 percent, other tobacco products 16 percent, labelled goods 13 and medicines 10 percent.

Despite the dominance of fake goods from China, a majority of counterfeit foods and beverages originated from Turkey, while a majority of fake medicine entering the EU could be traced back to the United Arab Emirates.

The report comes as the EU commissioner responsible for customs, Algirdas Semeta, prepares to discuss the issue at an international conference in Shanghai this September.

Brussels also intends to come forward with a legislative proposal by the end of the year to clarify and simplify the bloc's customs procedures, with the current legislation on IPR enforcement dating back to 2003.

De Gucht

In a separate but related event on Thursday, EU trade commissioner Karel de Gucht told journalists that European firms were becoming increasingly worried about doing business in China due to a lack of intellectual property protection.

Mr De Gucht told reporters at an EU trade event at the Shanghai World Expo that many of the concerns originated from Beijing's policy of 'indigenous innovation'.

By forcing foreign companies to register as Chinese companies before being allowed to participate in the country's public procurement market, the policy brought overseas intellectual property "into the open", explained the Belgian politician.

The comments come just days after two leading German industrialists voiced similar concerns directly to Chinese Premier Wen Jiabao at a roundtable discussion also attended by German Chancellor Angela Merkel.

Foreign firms have complained about investment restrictions, including in the automotive sector

Jurgen Hambrecht, chairman of giant chemical company BASF, and Peter Loscher, chief executive of industrial conglomerate Siemens, added their voices to a growing clamour of criticism against Chinese rules that are seen as disadvantaging foreign firms.

Mr Hambrecht said foreign companies are frequently forced to transfer business and technological "know-how" to Chinese companies in exchange for market access.

"That does not exactly correspond to our views of a partnership," he told Mr Wen at the roundtable discussion in the northwestern Chinese city of Xian, according to German journalists who attended the meeting.

The strong statements are particularly noteworthy due to their public nature and delivery during a meeting also attended by German Chancellor Angela Merkel, in China as part of a four-day state visit.

Mr Loscher voiced widespread complaints about draft Chinese public procurement rules which are intended to support "indigenous innovation," a policy foreign companies fear could shut them out of lucrative government contracts.

The Siemens boss also called on China to remove investment restrictions in certain sectors, reported German daily Handelsblatt. At present, foreign companies can be required to form joint ventures with Chinese companies when setting up shop in China, as exemplified by the Shanghai Volkswagen Automotive company.

Mr Wen reportedly responded to the criticism by telling Mr Hambrecht to calm down, insisting that China remained committed to opening its economy. "Currently there is an allegation that China's investment environment is worsening. I think it is untrue," Mr Wen said.

But the comments from two of Europe's leading industrialists come on top of a recent survey by the EU's chamber of commerce in China which showed that foreign executives hold an increasingly gloomy outlook regarding China's regulatory setup.

The increasing fears of discrimination led the EU chamber's president Jacques de Boisseson to suggest firms may even consider pulling out of China altogether.

"Nobody should take for granted that European companies will continue investing whatever the business environment," said Mr De Boisseson.

The move marks a dramatic u-turn for Germany in particular

The move, which marks a dramatic u-turn on previous positions, is vital to prevent Europe losing out in the race to develop low-carbon technologies, British energy minister Chris Huhne, German environment minister Norbert Roettgen and French ecology Minister Jean-Louis Borloo said in an opinion piece in the Financial Times on Thursday (15 July).

"If we stick to a 20 percent cut, Europe is likely to lose the race to compete in the low-carbon world to countries such as China, Japan or the US," wrote the three ministers.

While Europe currently enjoys a leading position in the low-carbon goods and services sector, recent research shows China has leapt ahead in green technology investment, attracting $40.3 billion of asset finance for clean energy in the past year, roughly $10 billion more than the EU.

The call for a unilateral jump to a 30 percent cut on 1990 levels is likely to anger European businesses however, with a European Commission paper in May on the subject attracting harsh criticism.

Brussels argued that the economic recession would make the greater cut significantly cheaper than previously thought, but fierce lobbying from businesses and certain EU states resulted in the document's language being watered down.

While making the case for the larger cut, EU climate commissioner Connie Hedegaard said present "conditions are not right" due to Europe's economic difficulties.

In their opinion piece on Thursday however, the three ministers say there is a compelling economic argument for the 30 percent cut, with failure to move now likely to lead to greater costs in the future.

"The current target of a 20 percent reduction now seems insufficient to drive the low-carbon transition," they said. "The recession by itself has cut emissions in the EU's traded sector by 11 per cent from pre-crisis levels."

The greater reduction "is a policy for jobs and growth, energy security and climate risk," they add.

Previously in UN climate talks, the EU has declared its willingness to make the jump to 30 percent only if other other countries around the world take similar steps, a development that did not materialise in Copenhagen last December.

Germany has been among the strongest opponents to a unilateral EU move, stressing that the jump should only be made in the context of a wider international agreement.

France has also shown resistance in the past, with the debate now likely to be thrown wide open again ahead of international talks on global warming in December in Cancun, Mexico.