LONDON, March 3, 2008 (AFP) - European Commission President Jose Manuel Barroso warned in an interview Monday that protectionist sentiment was rising in the 27-nation EU as countries perceived Chinese growth as a threat.

Speaking to the Financial Times from Brussels, Barroso said that new entrants to the EU from central and eastern Europe were doing a good job of pressuring older members on economic reform, and also ruled out a pan-European regulator for the financial markets.

Asked by the business daily whether protectionist sentiment was rising in the EU, he replied: 'Yes, and I fear this rise not only in Europe but all over. Political forces in Europe that were traditionally pro-market are today -- let's put it elegantly -- more prudent.'

'Some on the centre-right are now more conservative in that regard.'

He continued: 'I know very well that some people think of China's growth as a threat. We want to make it an opportunity. I have told the Chinese: 'You have to help us, you have to make the case that it's good for the global economy'.'

'The Commission doesn't want to, but it might be hard to resist the protectionist calls,' he said.

Barroso added, though, that it was the EU's new member states who have 'brought additional pressure for more competition in the older EU states. We are showing that enlargement can be a win-win process for the EU.'

On the prospect for a pan-European regulator, he told the FT: 'We certainly have no intention at all of having some kind of European super-regulator. But we want increased transparency and more co-operation among regulators.'

'We think innovation in financial markets is good. It's been good for financial institutions, business and consumers. But financial innovation and the incredibly sophisticated products on offer created regulatory gaps.

'Those gaps have to be addressed, and addressed pragmatically. A hasty response would do more harm than good.'

Barroso noted that the EU would likely suffer some from a slowdown in the United States because it 'cannot be completely immune to the situation in America, but we think there is no rational reason to fear a recession in Europe.'