EU trade chief says China business concern rising

European Union Trade Commissioner Karel De Gucht said yesterday European companies were increasingly worried about doing business in China, citing intellectual property protection as a major concern.

Mr De Gucht said procurement policies in particular must become more open and transparent, and that Beijing's "indigenous innovation" policy must not freeze European firms out of the information technology and clean energy sectors.

"European companies are increasingly worried," Mr De Gucht told reporters at a trade event at the European Union pavilion at Shanghai's World Expo.

"Most of it has to do with the protection of intellectual property because the core of our economy is of course intellectual property," he said.

The indigenous innovation policy forces European companies to register as Chinese companies to participate in the public procurement market and to bring their intellectual property "into the open", Mr De Gucht said.

The EU is in talks with Beijing to improve conditions for European businesses, but Mr De Gucht also said the bloc was working on measures to demand reciprocity in procurement markets. "The idea is we could respond to a closing of procurement markets, which are very important, not only in China, but all over. We are facing more and more problems with respect to this and that's why we are working on tools to defend ourselves," he said.

Foreign business leaders are becoming increasingly vocal about what they see as unfair conditions set by Beijing.

German business leaders expressed their concerns about restrictions directly to Chinese Premier Wen Jiabao at a meeting last week during a visit by German Chancellor Angela Merkel, Mr De Gucht confirmed.

The European Union was also looking at China's "Great Firewall" system of internet censorship and its impact on European services in China, he said, adding it would be on the agenda at an economic summit expected in November.