China Netcom, China's second largest fixed-line telephone company, will today open a London office that will be its European headquarters.

China Netcom is looking to use its global telecoms network to serve the voice and data needs of Chinese companies with operations in Europe, said one person familiar with the situation. It also wants to serve the telecoms needs of European companies with operations in China.

The move by China Netcom is part of efforts by Chinese companies to expand overseas under the Beijing government's “go global” policy.

The government wants to ensure that Chinese companies can compete with US, Japanese and European companies.

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