THE European Union has accused the official China Daily newspaper of publishing an article that censored and twisted the words of its ambassador, amid a flare-up in trade disputes between the two.

In a news release, the European Union delegation in China alleged that the article on EU-China relations "contained factual inaccuracies," Reuters reported.

China Daily granted the EU ambassador a right to reply, but edited the article to change the meaning of his words, refusing to publish the piece unless the changes were accepted, the delegation said.

China Daily did not respond to telephone calls seeking comment. The EU delegation in China did not immediately respond to an e-mailed request for the China Daily-edited version of the ambassador's article.

The tension comes as the EU and China face off over several trade disputes, such as Chinese steel flooding the trading bloc at low prices and accusations of unfair market access for foreign companies in the world's second largest economy.

The European Union has been debating whether to grant China "market economy status", given the Chinese government's hand in guiding industry and markets.

China says the status is its right come December, which marks 15 years since it joined the WTO. Failure to do so could spark a trade war.

In the news release, the EU ambassador to China, Hans Dietmar Schweisgut, said: "We also need fair trade. Therefore, modernising the EU's trade defence instruments should not be seen as protectionism, but rather, as a mechanism to better promote free and, above all, fair, trade."

The EU has engaged with China on several projects, from the Beijing-led Asian Infrastructure Investment Bank to the new Silk Road initiative, and remains in favour of free trade, he wrote.

"The EU wants a China which is economically more open and stable, with significantly improved market access for foreign companies as well as a level playing field for fair competition and without discrimination against our commercial actors," Mr Schweisgut wrote.

"Otherwise EU businesses cannot but conclude that the business climate for them in China continues to deteriorate."

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