China’s second-largest telecoms company is setting up a London office to spearhead its expansion into the European market.

China Netcom (CNC) is not the first to set up shop in Europe ­ - China Telecom has been here since 2004. And CNC is already a key partner for Western operators providing managed network services to multinationals with a presence in China.

But the firm’s expansion ­ which is part of Beijing’s “go global” policy ­ suggests plans for a more central role and is emblematic of global competition in the communications sector.

“CNC wants to be more than just a local Chinese access partner ­ it wants a global capability of its own,” said Ovum principal analyst David Molony.

“Looking at making acquisitions, or forming partnerships that are more than just wholesale deals, is the next step for Chinese operators,” he said.

There is a significant potential market.

“Virtual private network access back into China would be very interesting for a lot of European and US companies,” said Molony.

And while CNC’s expansion might look like unwelcome competition for dominant players such as BT and Cable & Wireless, it is also an opportunity.

“The relationship might work as a partnership because CNC will need access to European networks and one way could be to sign up with a major EU provider,” said Molony.

Concerns about a Chinese business invasion are not entirely unfounded, but CNC is only pursuing a similar global strategy to its European rivals, he said.