With Europe drowning in debt and flirting with recession, China's influence can only rise further. Euro zone governments would love Beijing to plough more of its $3.2 trillion in foreign-exchange reserves into their bonds.

China is also likely to chip in with a loan to the International Monetary Fund to provide a financing backstop in case Italy and Spain are shut out of the bond markets. Financiers turn instinctively to fast-growing China as they try to flush out buyers for assets that are going on the block as European governments, banks and companies pay down debt.

But, despite Chinese leaders' expressing interest in diversifying the country's overseas asset base away from government paper, analysts do not expect a sea change in China's traditionally cautious approach to expanding in Western markets. Africa and Asia are likely to remain China's top targets for now.

There are many reasons for the wariness.

Lengthy delays in obtaining the approval of regulators in Beijing put Chinese companies at a disadvantage in mergers and acquisitions when the seller wants a quick deal. Companies lack the management skills to integrate overseas acquisitions. And, perhaps most importantly, prospects are much brighter at home than they are in Europe.

The 27-member European Union is China's biggest export market. But foreign direct investment (FDI) has badly lagged, totaling $8 billion by the EU's reckoning or $12 billion on China's count - less than 0.2 percent of total FDI in the EU, according to Rhodium. The firm has kept its own tally since 2003, but its total of $15 billion through mid-2011, though greater than the official data, is still small.

There is also the political factor. The failure of Chinese firms to buy Saab, the Swedish car maker that was declared bankrupt last week, was a telling example of the difficulties facing Chinese investors.

But the picture is not black and white. After all, Volvo, another Swedish car maker, was successfully acquired by a Chinese rival from Ford Motor Co in 2010.

Investment in Europe will take off eventually, but a deteriorating political climate represents an obstacle in the short term. The EU, like the United States, is talking tough about Chinese "state capitalism" and is crafting a more assertive trade policy to counter what it sees as a playing field tilted against foreign companies.

For its part, Beijing smells protectionism in the air in response to its growing economic clout. And if Europe fails to snap out of its economic malaise, the risk is that a super-competitive China will be made a scapegoat.