EU says may have to change trade stance on China

By William Schomberg

BRUSSELS (Reuters) - The European Union may take a tougher stance towards China over its growing trade surplus with the bloc if Beijing continues to ignore calls to open up more to foreign exporters and investors, the EU executive said on Thursday.

The EU has taken a softer approach to dealing with China than the United States which has launched more litigation against the export powerhouse at the World Trade Organisation.

But EU trade chief Peter Mandelson has been ratcheting up his language, frustrated that talks have so far failed to produce clear results in terms of China's foreign investment limits and its enforcement of intellectual property laws.

European Commission President Jose Manuel Barroso added his voice to the chorus of calls for action from China on Thursday.

"We are very concerned with Europe's huge trade deficit with China," Barroso told reporters ahead of an EU summit in Lisbon.

"I myself have raised this issue with our Chinese partners very clearly. We have received some commitments of the Chinese side saying they will work with us to correct those imbalances. So far we have not seen enough results on this area, frankly."

Last week EU finance ministers singled out the Chinese yuan as the world's main problem currency and a delegation is due in Beijing later this year to discuss concerns that it is being kept weak to help fuel China's export boom.

China's trade surplus with the EU hit 86 billion euros (60 billion pounds) in the first seven months of 2007, up 25 percent from the same period of 2006, data showed on Thursday.