The United States believes Europe has taken steps in recent months that puts it in a stronger position to address its debt crisis and called on China to do its part for global growth, a senior U.S. Treasury official said on Friday.

The Treasury official, speaking ahead of meetings of global finance chiefs in Tokyo next week, said a meeting of Group of Seven major economies on October 11 would focus on what more each country could do to boost growth.

"Our sense is that because of the steps Europe has taken, they are in a much better position to navigate forward than they were earlier this year," the official, who spoke on condition of anonymity, added.

The official said the European crisis, which has led to bailout for Greece, Ireland and Portugal, remains the strongest headwind to global growth and the most immediate challenge to the U.S. recovery.

The official said there would be considerable interest during the Tokyo meeting to hear more from Europe on its crisis-prevention plan. Spain is currently considering whether it will ask for a full bailout from Europe.

Euro zone finance minister will also formally launch the bloc's permanent, 500-billion-euro bailout fund on Monday, bolstering the single currency area's defense.

The Treasury official said the establishment of the European Stability Mechanism, or ESM, would be a major step forward.

"Because of these actions, Europe is in a much better position today than it was earlier this year," the official added.

The Treasury official said it was important that improvements in Europe be coupled with support for growth in China, which the official said should boost domestic demand and ensure continued progress in making its exchange rate more flexible.

The official acknowledged there had been progress by Beijing in making its currency more flexible.

"We are seeing a very substantial shift in that direction. We have seen progress through the doubling of US exports and the appreciation of China's currency against the dollar by 11 percent in real terms," the official added.

(Reporting By Lesley Wroughton)