Brussels has accused China of "dumping" cheap leather shoes on the European market and has imposed temporary tariffs on imports. It is currently examining other cases of possible trade distortion involving items such as plastic bags, with a view to similar action. As a member of the World Trade Organization and a key player in the global economy, China must respect trade rules, Mr Mandelson said. This required it to give fair treatment to European firms doing business there and honouring intellectual property laws.

Failure to act by Beijing in this area would only fuel calls for greater protectionism in Europe, Mr Mandelson warned. "China sometimes talks as if it is at the edge of the WTO system looking in," he said. "But China now is the system." The EU is China's largest trading partner, while China is the EU's second largest trading partner after the United States. However, the relationship has become increasingly unequal with the EU's trade deficit with China growing to more than 100bn euros (£70bn).

In return for China accepting the responsibilities that come with being a global economic power, Mr Mandelson suggested that Europeans needed to turn down the rhetoric over cheap imports and unfair competition. He said many European firms now used China as a low-cost manufacturing base to export to the rest of Asia, while complaining about the threat to jobs in their own markets from Chinese goods. "Europe must accept the Chinese challenge to adapt and compete.What do we mean when we say that cheap Chinese exports are threatening European livelihoods?"


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