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.

earlier related report
US hits out at China business climate
Beijing (AFP) Sept 20, 2011 - The US ambassador to China on Tuesday hit out at the business climate in the world's second largest economy, urging it to open up further to foreign business and exports.

Speaking to hundreds of US and Chinese business leaders, Gary Locke also urged the creation of a top-level structure to stamp out intellectual property theft.

His speech comes ahead of "a major trade enforcement action against China" to be announced by US Trade Representative Ron Kirk later Tuesday, according to an advisory issued by his office that provided no further details.

"China's current business climate is causing growing frustrations among foreign business and government leaders, including my colleagues in Washington," Locke said.

He said foreign businesses faced "substantial restrictions in participating in a variety of Chinese industries, ranging from healthcare to energy to financial services and several others".

"And in industries like mining, power generation and transportation, the Chinese government selects national champions and effectively shuts out foreign competition altogether," he said.

His comments reflect a report released earlier this month by the European Union Chamber of Commerce, which said China was setting up new obstacles for foreign companies wanting to invest in the Asian nation.

Locke said he would take US trade delegations to emerging Chinese cities to target cooperation in clean and renewable energy, railways, healthcare, aviation and information and communication technologies, in a bid to expand business ties between the United States and China.

He also added he would push for reforms of the visa application process that sometimes stalls Chinese investors from engaging in America's struggling economy.

Singling out China's rampant piracy software as an area for improvement, Locke said that only eight US cents of legal software was sold in China for every $1 in computer hardware, compared with $0.88 sold in the US.

Locke called on China to create "a permanent State Council-level leadership structure to lead and coordinate IPR enforcement efforts at all levels of government focused on serious IP theft," including growing Internet piracy.

The State Council is China's cabinet, headed by Premier Wen Jiabao.

Locke was speaking at an American Chamber of Commerce and US-China Business Council event, where guests included Zhou Wenzhong, China's former ambassador to Washington, and Fu Chengyu, chairman of Sinopec, Asia's largest refiner.

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