Mr Brinkley said: 'China is a growing economic force, but we cannot meet its challenge by becoming even more of a low regulation, low tax economy. Firms in other European countries have shown they can sell to China and take advantage of its new wealth.

'China, Europe and UK Manufacturing' says that companies in Germany, often cited by UK employer organisations as among the most heavily regulated in Europe, have won export markets in China, at a time when UK exports have struggled. German manufacturers have nearly doubled exports to China by value in the last five years, a growth rate of more than five times that of the UK. France and even Italy have been more successful than the UK, says the report.

According to the report, between 2000 and 2004, UK manufacturing lost over 720,000 jobs (18% of its workforce), with the biggest losses occurring in textiles, clothing and footwear (employment fell by 48%), electrical and optical equipment (29%), industrial machinery (21%), and mineral and metals (18%).

'Too few employers are doing enough to ensure manufacturing's long-term survival. We need to invest in the things that matter like skills, research and innovation. And while each firm has to make and sell its own products, it is right to ask how government and the sector can work together to make the changes needed.

That is why we need a special summit to help focus minds and enable everyone to work together.'

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