China has indicated it is ready to step up its efforts to help resolve Europe's debt crisis, amid warnings an escalation would seriously harm its own economy.Following a meeting in Beijing with EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso, China's premier Wen Jiabao said he wanted to see Europe - its biggest trading partner - "maintain stability and prosperity".
He said China was considering using Europe's bailout funds to help address the sovereign crisis but did not elaborate.
European leaders last year approached China, which holds the world's largest foreign exchange reserves, to invest in a bailout fund to rescue debt-stricken states.
EU leaders will discuss in March whether to boost the size of the 500bn euro (£420bn) European Stability Mechanism (ESM), the permanent rescue fund due to begin operating in July.
There has been speculation that China will contribute 100bn euro (£84bn) to the pot but no announcement is seen as imminent.
China has made clear its growing concerns over the crisis in Europe, repeatedly urging EU leaders to get a grip on the situation, which the foreign ministry said this week had reached a "critical juncture".
The International Monetary Fund had previously warned that a deterioration could halve China's own economic growth this year.
Greece is the most pressing concern.
But Eurozone finance ministers have cancelled a meeting scheduled for Wednesday to discuss whether the latest austerity measures, agreed by political leaders in Athens, go far enough to meet strict qualification criteria for a second bailout, worth 130bn euro (£110bn).
Athens needs the cash to avoid defaulting on its debts when key bills are due on March 20 but the overall price for securing the money sparked a new round of riots on the streets of Athens.
The extent of the impact of austerity on Greece was laid bare when official figures showed the Greek economy continued to contract at an alarming level in the final quarter of 2011.
Output fell 7% in the three months compared to the same period in 2010.
It is expected that figures for the eurozone as a whole due on Wednesday will show GDP contracted by 0.4% in the final quarter of 2011, following growth of 0.1% in the previous quarter.
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