The EU Is Ready To Challenge China'S Export Credit Preferences For Chinese Enterprises.

China's low cost and premium are controversial.

* EU energy, telecommunications and pportation businesses frustrated

* corporate lobbying groups say that EU companies are in poor condition in China and Africa.

European trade officials have been collecting industry data to enable the European Union to challenge China's low cost loans to Chinese companies, according to information provided by EU officials and Reuters.

The action, led by the European Commission and --BusinessEurope, Europe's largest corporate lobby group, highlights Europe's determination to solve unfair competition from China's business and government officials, which has made European businesses lose business globally.

In the January 6th BusinessEurope e-mail, Reuters said, "the EU authorities will need strong evidence that China's export credit and guarantee preferences have led to distortions in competition, and willing enterprises can provide evidence.

"The group asked EU businesses to respond before January 28th.

"BusinessEurope and EU authorities hope to get in touch with interested associations, especially those in China.

The divergence between exchange rate and human rights issues has already damaged Sino EU relations, and when China provides assistance to high indebted European countries such as Greece and Portugal, the challenge to China's financing problem may be even more detrimental to bilateral relations.

This may make it more difficult for European companies to do business in China.