The European Commission has set out a 10-point plan for more balanced economic relations with China, urging EU leaders to back its ideas to curb Chinese state-owned enterprises and increase their guard against cyber-security threats.

The action plan marks a shift in the bloc's stance towards its top trading partner and will be put to EU leaders to discuss at their next regular summit meeting in Brussels on 21-22 March before an EU-China summit on 9 April.

The Commission, the EU's executive, said the EU should co-operate more with China in areas such as climate change and peace, but should also push for a more reciprocal economic relationship and take steps to protect its industry.

The EU shares many of the United States' concerns over Chinese market distortions, over capacity and technology transfer. However it has avoided taking sides in a multi-billion dollar trade war between Washington and Beijing.

Europe has also been increasingly frustrated by what it sees as the slowness of China's opening of its economy, a surge of Chinese takeovers in critical EU sectors and the US pressure to shun China, and notably Huawei, over espionage fears.

European Commission Vice President Jyrki Katainen said relations could be beneficial if competition were fair and trade and investment reciprocal, but that Europe needed to ensure a level playing field and protect its markets from distortions.

If backed by EU leaders, the bloc would urge China to agree to reforms of World Trade Organisation rules, notably regarding subsidies and forced technology transfer, and conclude a deal with the EU on investment rules by 2020.

The Commission urged EU nations to revive a stalled proposal known as the International Procurement Instrument that would require foreign countries to open up their public tenders in return for access to Europe.

The EU executive believes Chinese bidders for EU public contracts should meet high labour and environmental standards and wants to adapt EU law to limit the influence of state-owned enterprises and state subsidies in the EU market.

It also believes EU countries should find a common line on the security of planned high-speed 5G telecoms networks.

China is the EU's biggest source of imports and its second-biggest export market after the US, with trade between the two worth more than $1bn per day. China's trade surplus in goods with the European Union was €177.7bn in 2017.