It is difficult for China not to get involved in the European debt crisis. China's Foreign Ministry and Ministry of Commerce both recently expressed support for the beleaguered euro zone. However, that raises the question of how to help European countries without sacrificing China's own national interests.

Scores of Chinese economists from all around the country discussed these topics and more during the recent academic forum titled China-Europe Relations from a Global Perspective, which was hosted by the China-Europe Academic Network under Tongji University.

Improper responses likely to cause double-dip recession

Due to the slow pace of Greece's fiscal reforms, which has made the country unable to fully meet the bailout conditions of the European Union and the International Monetary Fund, it is still uncertain whether Greece can secure a second round of bailout loans.

Ding Yifan, deputy director of the World Development Research Institute at the Development Research Center of the State Council, said that although Greece's economic scale only accounts for a small part of euro zone's total and its possible debt defaults will unlikely pose a severe impact on the euro zone, Greece's debt defaults will undermine investors' confidence in the euro.

"All euro zone countries must take some actions. Improper responses will lead to chain reactions. The financial tsunami will likely spread to the entire world again, and the world economy will likely fall into a double-dip recession," Ding said.

Furthermore, Moody's ratings agency recently downgraded the credit ratings of two French banks of Credit Agricole and Societe Generale. "The European debt crisis will likely cause a banking crisis in Europe. If the debt crisis continues to spread, European banks will have to be reluctant to put funds into the real economy and accordingly slow the pace of the global economic recovery," Ding said.

No backing out for euro zone countries

Experts at the meeting said that there is no backing out for euro zone countries now. They must shoulder their responsibilities and make practical efforts to overcome the debt crisis.

First, a timely injection of cash into debt-laden countries is crucial to resolving the crisis. A late cash injection will result in higher bailout costs and leave euro zone countries with fewer choices.

Second, the deterioration of the debt problems in euro zone countries is the direct cause of the crisis. Many European countries have grown to rely too much on borrowed money, and should cut government spending as well as wasteful social welfare expenditure.

Third, the difficult situation may lead to a more unified E.U. fiscal policy.

The history of the euro zone has proven that every crisis will push forward its internal integration. However, the euro zone is still on a bumpy road to a fiscal union. Qiao Yide, a financial expert, said that to form a fiscal union, the European Union must undergo the long process of amending its constitution, obtaining the approval of the national parliaments of its member states and holding referendums.

How can China help Europe get out of debt?

China cannot turn a blind eye to a global crisis, which may be caused by the deepening European debt crisis.

Qiao made several suggestions about China's assistance to the euro zone.

First, China should buy more bonds from multilateral institutions, including euro bonds and the bonds issued by the European Financial Stability Facility, because they are less risky.

Second, China should encourage domestic enterprises to expand in Europe, carry out business cooperation with European companies or purchase those companies' preference shares that do not carry voting rights to avoid political obstacles.

Third, China should increase the weight of the euro in the RMB's currency basket.