China Won't Rescue Europe, But It Should

For now at least, China has left Europe dealing with its own debt woes â?? a marked reversal of the bold backings of Greece and Spain months earlier. Admittedly, China can't single-handedly save the euro zone, as the region's underlying debt problems are also deeply structural. But the East Asian giant is one of the few nations well positioned to play a major role --China holds the world's largest foreign exchange reserves at $3.2 trillion.

There are several reasons why China remains cautious, but much of it seems shortsighted.