EU trade chief tells China 'more is needed'

European Union trade chief Peter Mandelson urged China Thursday to assume a greater leadership role in the global economy, saying much more was needed to open up the Asian giant's markets.

Mandelson, on a five-day trip to China, listed a litany of grievances in fields ranging from agricultural products to banking and the services sector, as he spoke to students at the People's University in Beijing.

"China's World Trade Organization membership has been another significant step -- provided the commitments are met. But more is needed," the trade commissioner said.

He said China, which entered the WTO in late 2001, was destined to play "a pivotal role" in the world economy for decades to come but that this status came with important duties as well as obligations.

"Economic leadership also brings with it responsibilities -- to respect and support open markets, to apply rather than circumvent the rules and, above all, to ensure that the benefits of open markets are shared by all," he said.

Issues raised by Mandelson included non-tariff barriers such as procedures for product certification and labeling approvals, as well as lengthy authorization periods.

He also mentioned health and safety barriers in agricultural trade, national standards in conflict with international norms and a failure to open up government procurement.

Mandelson further pointed to complex rules restricting foreign investment and to unequal access to banking finance.

"These practices complicate the lives of our businesses selling into China. We would like to work now with China to see them removed," he said.

He said Beijing particularly needed to live up to its commitments in service industries such as banking and telecoms, arguing that opening these sectors would be in China's interest.

"Opening up banking would allow enterprises to have better access to capital funding. Opening telecoms would contribute to a more dynamic telecom sector, more jobs and cheaper calls."

The value of Chinese exports to the European Union has almost doubled in the past four years from 81 billion euros to 157 billion euros (104 billion dollars to 201 billion dollars), Mandelson said.

He said this had boosted China's share of overall EU imports to more than 13 percent from eight percent over the same period.

But he warned that if China did not decide to open up its markets more and allow greater foreign competition, Europeans might lose some interest in engaging with the outside world.

"In Europe we must resist superficially attractive but self-defeating arguments for turning in on ourselves (but)... I am increasingly concerned that this will only be achieved if China shows greater urgency in playing her part."

Intellectual property rights have been a key focus of Mandelson's trip and in Thursday's speech he again emphasized the need for speedy improvement from Beijing and called for better protection of European innovation.

"This is an area where we need to work with China to deliver rapid progress," he said.

At a briefing in Beijing late in the day, Mandelson said he would return to China as often at necessary to iron out problems and secure agreements on market access and intellectual property right protection.

"Getting the economic relationship with China right really matters for every single European -- probably more in the long term than any other single issue I deal with," he said.

"Getting our relations with China right is a huge economic and political challenge, which we must tackle together by dialogue and negotiation."

Mandelson said China was improving its record in terms of obtaining market economy status, which, among other things is important for arbitration in dumping cases.

"I believe China is heading in the right direction. I believe it should be possible to record some progress in the autumn when this matter is next reviewed."