Peter Mandelson, the European Trade Commissioner, told China yesterday that it was risking its reputation by its failure to halt a tidal wave of counterfeit goods flooding into Europe’s markets.

Mr Mandelson’s demand that China take effective measures or face an end to European patience drew a chilly response from Beijing’s most senior minister on trade. The Commissioner had said that he would not mince his words and gave the Chinese as good as he got.

He told a meeting on food safety that a rash of recalls of toys, toothpaste and other consumer goods had shaken trust in China’s exports. Beijing had to clamp down on defective goods to restore confidence.

Mr Mandelson said: “While product safety is not a problem restricted to China, it will nevertheless be central to the global perception of China’s growing weight as a manufacturer. China’s long-term success depends on its reputation.”

Comments by officials that 99 per cent of China’s products were safe were not good enough, he said. “Europe imports half a billion euros’ worth of goods from China every day, so even 1 per cent is not acceptable.”

Wu Yi, China’s “Iron Lady” Vice-Premier, was not amused. She said: “I am extremely dissatisfied.”

Mr Mandelson said that Ms Wu had been upset by his comment that eight out of ten counterfeits discovered in Europe came from China — “but that’s a fact. We must seek truth from the facts,” he said, quoting Chairman Mao. He said that European confidence in China had fallen, with European Union manufacturers last year estimating that intellectual property theft had cost them one dollar in every five made in China.

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