China is becoming increasingly involved with global governance. As the sovereign debt crisis in Europe continues, Premier Wen Jiabao said last month that China will be a friend to Europe. The question is: how will China help alleviate the sovereign debt crisis?

Zhang Xiaoqiang, vice minister of the National Development and Reform Commission said: "For those countries experiencing a sovereign debt crisis, we are willing to lend a helping hand to buy some of their bonds."

Buying European bonds is possible since China, the world's second largest economy, has more than $3 trillion in foreign currency reserves.

But the West oscillates between two extreme positions regarding China.

The first is protectionism where acquisitions by Chinese companies are being blocked. Many in the United States oppose such acquisitions claiming they are a serious risk to national security and a number of Chinese investment proposals have also been blocked in Europe.

The EU's industry commissioner, Antonio Tajani, recently said that some European countries are worried that Chinese companies are looking to buy European businesses to strip them of their technology. According to Song Zhe, China's ambassador to the European Union, background checks have been conducted on Chinese companies, which have left many Chinese businesspeople with the impression that the European investment environment is deteriorating, causing them to postpone or even cancel their plans to invest there.

Chinese companies have been favoring Europe over the United States as the Committee on Foreign Investment in the United States (CFIUS), frequently stops Chinese firms from buying US companies on the pretext of national security.

Recently, Alibaba Chief Executive, Jack Ma, reiterated that the Chinese e-commerce company is interested in purchasing Yahoo, Inc. But according to analysts, any potential deal is likely to be blocked by CFIUS on the grounds it could harm national security. As was the case in 2005, when China National Offshore Oil Company Ltd withdrew its offer to buy UNOCAL, the ninth largest oil company in the US, following what it described as "the unprecedented political opposition that followed the announcement of our proposed transaction".

The second position is using China as a lender to bail out the West. It is evident that China has an interest in a healthy European economy, especially since Europe has expertise in sectors such as aerospace, automotive, technology and luxury brands.

However, both positions do not reflect China's true standing in the world. When Chinese firms take over foreign assets, they usually do not remove the existing management and workforce. Instead, they integrate the acquired firm in their existing operations. For instance, when Geely, one of China's largest car companies, acquired Volvo. Geely preserved Volvo's identity and succeeded in doing what Ford, the former owner, failed to do.

As the sovereign debt crisis continues, Europe should accept help from China. As Premier Wen Jiabao said, Europe needs to put its own houses in order to stop the crisis from spreading and affecting other countries. The West should look at China from a strategic point of view and recognize China's market economy status, which is what China has been anticipating since it began its economic reforms in 1978.

However, according to EU leaders, China has not yet met the necessary conditions, since most of China's largest companies are State-owned and their leaders appointed by the government. But the borderline between private and State-owned is blurring and most State-owned firms are being transformed into agile players, partly powered by foreign capital.

And even though State-owned companies are still very powerful, private firms are the driving force behind China's growth.

Based on the World Trade Organization rules, China will eventually get market economy status by 2016. Achieving this will help China avoid anti-dumping measures and boost bilateral trade, and will benefit both sides.

The author is founder and chairman of Horasis, an independent international organization committed to enacting visions for a sustainable future.