UPDATE 3-In breakthrough, China promises EU companies equal treatment

Chinese Premier Li Keqiang promised his European Union hosts on Tuesday that Beijing will no longer force foreign companies to share sensitive know-how when operating in China and was ready to address industrial subsidies.

Marking a significant shift, Li's pledge at the annual EU-China leaders meeting follows similar offers to the United States and potentially signals an opening that European companies have long lobbied for. Summit chair Donald Tusk called it a breakthrough.

"European companies will enjoy equal treatment," Li told a news conference following the three-hour summit in Brussels, offering to set up a dispute mechanism to handle complaints by foreign companies in China. Western governments have long complained that their companies are pressured into handing over technological know-how to Chinese joint-venture partners, officials or regulators as a condition for doing business in China.

That technology is often subsequently used by Chinese competitors, undercutting Western companies, says the European Union, which fears Chinese dominance in strategic industries. Tusk said it was the first time China had agreed to engage in discussions on reform of WTO rules, "this key priority for Europe."

China also agreed to address EU concerns over state subsidies to industrial firms. "Both sides will intensify the discussions with the aim of strengthening international rules on industrial subsidies," the two global trading powers said in a final summit statement. (Reporting by Philip Blenkinsop and Robin Emmott; editing by Kevin Liffey and editing by John Stonestreet)

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