A European Union (EU) official yesterday pledged that the bloc would strengthen partnership with China and urged companies on the continent to face up to competition from their Chinese counterparts.

"Europe has benefited from China's rise, its economic strength and stability," Serge Abou, ambassador of the European Commission the EU's executive arm to China, said at a news conference in Beijing.

It is very important to develop the partnership between the two sides because it "has been a success for both," Abou said when expounding on a policy paper on China issued by the commission on Tuesday.

EU-China trade doubled between 2000 and 2005, making Europe China's largest export market. EU exports to China have also increased by more than 100 per cent in the same period, much faster than its exports to the rest of the world, according to the EU statistics.

Speaking in Europe after the document was approved, EU Trade Commissioner Peter Mandelson said "China is not a globalization scare story, it is a globalization success story.

"China means cheaper goods in European shops, cheaper inputs for business, more competitive European companies, growing markets for Europe's exporters and lower interest rates," he said.

EU figures show that two decades ago, it traded almost nothing with China, but last year, two-way trade totalled 210 billion euros (US$262 billion).

However, Abou said, China also stands for the central challenge of globalization competition.

"Europe has to accept the fierce competition while China has to ensure it is fair competition," he added.

The EU policy paper stressed closer ties with China, but it argued that China's growing trade brings with it new responsibilities to fulfil its World Trade Organization obligations, open its markets and trade fairly.

Accompanying the 10-page document entitled "EU-China: Closer Partners, Growing Responsibilities" is a separate policy paper "The Trade and Investment Strategy," highlighting the importance of economic and trade relations with China.

The Chinese Government has not officially responded to the policy paper, but observers expect some changes in the policies and measures that the EU would adopt towards China in the coming years.

"Obviously, the EU will engage China as the country's development has had a comprehensive influence on the world economy," said Chen Fengying, an economic professor at the China Institute of Contemporary International Relations.

"Bilateral ties will be even closer despite competitive pressure," said Chen, director of the Department of the World Economy at the Beijing-based institute.

However, she noted, the EU policy paper seems more concerned about China's "responsibility" in the world economy rather than the trade deficit with China as was previously.

"China will face greater pressure in market opening and intellectual property protection from Europe, particularly in high-end products, such as electrical appliances and automobiles," Chen said.

The EU and China became strategic partners in 2003 and since then, the two sides have been working together in many fields ranging from aviation and maritime transport to regional and macro-economic policy.

The EU-China summit in Helsinki last month agreed to launch negotiations on a comprehensive new Partnership and Co-operation Agreement, which would encompass the full scope of the EU-China relationship, including enhanced co-operation in political matters, according to Abou.

"This will be the key mechanism to take this partnership forward," Abou said.