China's Ministry of Commerce has issued a research report warning that a slowdown in the U.S economy could cause a sharp drop in Chinese exports and significantly affect China's growth. Exports account for more than a third of the country's economic growth and 10 percent of its overall gross domestic product.

The U.S. receives nearly 20 percent of all Chinese exports, making it the second-largest destination for Chinese products after the European Union.

But growth in exports to the U.S. has been decreasing this year, especially with the onset of the American sub-prime loan crisis.

The growth rate fell from nearly 20 and a half percent year-on-year in the first quarter of this year to 15 and half percent in the second quarter and less than 12 and half percent in the third quarter.

China's central bank estimates that every 1 percent drop in U.S. economic growth translates into a 6 percent decrease in Chinese exports.

But Zhang Yansheng, Director of the Foreign Economic Research Department at the National Development and Reform Commission, says the result may be not so bad, because growth in other markets has counteracted the negative factor on the U.S. market.

"According to statistics, our exports to the European market experienced the fastest growth in the first 10 months of the year. Demand from that market is growing rapidly, especially as the value of the euro appreciates."

He suggests Chinese exporters diversify their target markets to better manage export risks.

However things may not be easy considering that business rules vary from country to country, even in an integrated market like the EU.

CRI's Guan Juanjuan talked to Willem Leppink of Simmons & Simmons, for a further look at other issues related to competing on the EU market

(Q&A)

That was Willem Leppink, a lawyer with Dutch law firm Simmons & Simmons talking to Guan Juanjuan on the issues that Chinese firms need to be aware of when doing business in EU countries.