MG Rover must not regard an investment by Shanghai Automotive as automatically solving all of its problems, says Sir Digby Jones, director-general of the Confederation of British Industry.

“I hope the Chinese confirm their investment which would give MG Rover an opportunity to compete against other car makers,” says Jones.

Speaking in Brussels before meeting new commissioners whose responsibilities embrace business and industry, he emphasises the need for open competition.

He wants them to appreciate that it is unfair if British firms are handicapped by onerous targets when rivals in other European countries do not make the same commitment.

Jones also underlines the threat from developing countries. “People must not think Chinese and Indian factories are third-world places,” he says. “I have seen them and they are not.”

Chancellor of the Exchequer Gordon Brown this week pressed the MG Rover case while meeting ministers in China.