The United States and Europe should be more open to Chinese investment as they seek help in resolving crippling sovereign debt crises, China's state Xinhua news agency said Tuesday.

With more than $3 trillion in foreign currency reserves China, the world's second-largest economy, has emerged as a major player as Western nations seek buyers for their sovereign debt.

On Tuesday, Xinhua said Beijing could "play a positive role in working out a solution to the current predicament" faced by the United States and some European countries in return for more openness to Chinese investment.

"This could only come with some fundamental changes to prevailing incorrect thinking about Chinese investments in the developed world," the agency said in a commentary.

"It would help the United States and the EU break away from their current financial woes should they ditch protectionist measures and sincerely open their arms to Chinese investments, allowing China to make the most of its rich foreign exchange reserves."

Xinhua said "discrimination" against Chinese investors due to "misplaced national security concerns" meant some developed nations were missing out on much-needed foreign investment.

Xinhua's comments, which reflect government thinking, came as Beijing said it was "very disappointed" not to be recognised as a market economy by the European Union but denied any explicit link with Chinese aid for the troubled eurozone.

Beijing has long demanded that the European Union and United States accord China full market economy status, a technical designation that would remove certain restrictions to Chinese exports and investments in Europe.

EU leaders have said the Asian giant has not yet met the necessary conditions, pointing out that most of its largest companies are state-owned and their leaders appointed by the government.

But last week, Premier Wen Jiabao appeared to link China's willingness to invest more of its vast foreign currency reserves in euro bonds to a call for Europe to recognise its full market economy status.

"After 30 years of economic reform, China has completely transformed itself from a planned economy to a market economy," commerce ministry spokesman Shen Danyang said Tuesday at a regular briefing.

"But the European Union still fails to recognise its full market economy status. China is extremely disappointed. This is not a technical problem, but a political problem."

However, Shen insisted China's assistance as the eurozone faces a sovereign debt crisis was not conditional.

"Assistance to Europe and the recognition of market economy status are two different questions," he said.

channelnewsasia.com