Although Europe's low-cost labour-intensive industries such as clothes and textiles were the first to feel the heat from Chinese competition, increasingly it is high-tech sectors that are coming under pressure.

"As China deepens its investment in research and development and moves into higher-cost production it will be cars and precision manufacturing" that face competition, EU Trade Commissioner Peter Mandelson said.

"And after that aircraft and marine engineering," he added, speaking at a conference on trade and investment with China on Friday.

Over the last year, Mandelson has struggled to ease trade tensions with Beijing over booming clothing and shoe imports and is eager to avoid further conflict as China becomes dominant in other industries.

Smooth relations have become a top priority for both the EU and China as trade between them has boomed in recent years, reaching an estimated 200 billion euros (256 billion dollars) last year.

The EU has become China's biggest trading partner while China is now the EU's second-largest trading partner after the United States, according to the European Commission.

Despite the booming trade relationship however, the general secretary of the ETUC federation of European unions, John Monks, warned that Europeans were often left with the impression that it was not taking place on a level playing field.

"There is undoubtedly a feeling around that we are not being played with fairly and that we are at risk, particularly in the trading sector of the economy," he said.

European business leaders are nonetheless eager to stress that China represents an opportunity, not just a challenge.

The chief China representative for German chemicals giant BASF, Joerg Wuttke, said China should not be seen as the world's factory, but increasingly as a vast global marketplace for goods and services.

"China is not going to be just a supply story, it's turning into a demand story," Wuttke said.

"By 2015 China will have about 600 to 700 million end-consumers and that's why business is establishing itself at this stage in order to be present for the years to come," he added.

However, the head of the EU chamber of commerce in China, Serge Janssens de Varebeke, warned that European business still faced considerable obstacles when doing business, making it difficult to compete with more savvy locals.

"Some regulations appear to be designed to be non-tariff barriers to trade limiting foreign access to Chinese markets," he said.

The head of the China network of the UNICE European employers lobby, Michel Bricout insisted that China stick to internationally agreed trade rules so foreign firms could compete fairly.

"What is crucial is that competition in China is fair and based on the full implementation of economic and trade rules," he said.

"European companies are committed to China, but the more that China is a key partner playing by the rules the more European businesses will commit to China," Bricout added.