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The bedeviled trade relations between China and the EU appear to be on the mend but the EU trade chief has warned Beijing to stop handing out "illegal" state subsidies.

"China is ready to work with the European Union to set out a comprehensive plan for the future of EU-China relations," China's vice-premier Ma Kai told a news conference alongside the EU's two most senior economics and trade officials, Reuters reported.

"China is ready to ensure that our cooperation can be elevated to a higher level," Mr Ma said after talks with the EU's economics chief Olli Rehn and EU Trade Commissioner Karel De Gucht in Brussels.

The EU has been looking for greater industrial opportunities in China and is eager to remove requirements that they must have a Chinese joint venture partner and surrender sensitive know-how.

Despite doubling trade with China since 2003, the European Union accuses Chinese companies of benefiting from unfair state aid allowing them to dump goods in Europe, selling them at below cost to put locals out of business.

"The whole system of subsidies is one of the major problems in our trade relationship," said Mr De Gucht, referring in particular to Chinese export credits.