This speech concludes a memorable five day visit to Hong Kong, Shanghai, Chongqing and Beijing. In each venue, I have seen important changes underway and discussed the next steps in the burgeoning cooperation between China and Britain. Premier Wen and Prime Minister Brown have agreed that our relations have never been stronger, and I am committed to ensure we build on the wide-ranging cooperation underway, deepening our understanding of the challenges we face and developing our joint work in the interests of economic progress, social justice and global security.

Both China and the UK have been major beneficiaries of globalization.

For China, integration into the global economy has been the driver of the most remarkable story of rapid national progress in human history. 500 million people have been raised out of poverty in just thirty years. Chinese goods dominate European and US markets. Growth rates of nearly 10 per cent a year have propelled China’s resurgence as the fourth largest economy in the world..

For the UK, globalization has helped address some of the structural sources of our relative economic decline. Foreign capital has tackled the lack of long term investment from weak savings. Foreign talent has filled gaps in skills and management expertise. Foreign products at competitive prices have helped to keep inflation down.

But globalization, like all complex changes, has its risks and the critics have some persistent, pertinent questions, How to promote stability within our borders without losing the dynamism and prosperity that comes from the free movement of money, ideas, products and people? And how to promote security beyond our borders through international cooperation to meet global threats?

Protectionism

The first shared threat we must address is protectionism.

An open global economy has driven economic growth and the rise in living standards across the world. But economic restructuring and adaptation can be painful. The pain is immediate and the benefits are often post-dated. Protectionism is a political temptation and we can see some politicians on the point of yielding in the US and across the EU.

Responsible sovereignty demands that we keep the forces of protectionism at bay. It demands that we dismantle barriers to trade. The UK will, for our part, continue to argue strongly for open trade and investment. But the proponents of free trade need China's help to win that argument in Europe and in the US. In particular, we need China’s full diplomatic weight behind the urgent quest for a new global trade deal that gives the poorest people in the world a share in the benefits of globalization, and provides the global economy with a powerful engine for growth.

Faltering states

The third threat comes from what I call ‘faltering states’: states that either too weak to guarantee the rule of law and protect their citizens, or states that are too strong and threaten the safety of neighboring states.

I believe it is in all our interests to address the poor governance that can give birth to conflict and instability. Decisions to interfere in another country's affairs must never be taken lightly. Diplomatic engagement and aid both to promote good governance and encourage states to tackle inequalities must always be our preference.

A new bargain

My argument so far has been that globalization has created shared threats and interests that necessitate deeper obligations both within states, to their own citizens, and between states.

But the challenge is to translate shared interests into shared action.

Here we are hampered by the mismatch between the international institutions designed in the aftermath of the second world war and realities of the new millennium. Interdependence is the defining feature of our age. It requires a different type of international politics. Not the old idea of a bargain based on competing interest, but a new bargain based on mutual shared interest. Not the old international system based on balance between opposing powers, but an international system that enshrines shared commitments.

The UK can nurture this new bargain through our bilateral ties with China. In the past, the UK was seen as a bridge between Europe and the United States. I believe, in what may come to known as the ‘Asian Century’, Britain must become a global hub. That means it has to deepen its relationship with China and other emerging powers.

But there is also a major opportunity for Britain to engage with China over the next decade through the European Union. The EU is the world’s largest single market and the EU is China’s most important trading relationship. China is the fastest growing major economy. We have deeply aligned interests, as energy constrained, open economies that depend on imported oil and gas. By harnessing our market power together to accelerate EU/ China trade and investment in low carbon goods and services, we could set standards for the global transition to low carbon. This would not only boost the climate effort, and make possible a stronger agreement in Copenhagen. It would also bring enormous benefits to us both as early movers in the new low carbon global economy.

In 1910, the Nobel Prize Winner Normal Angell, argued in his book The Great Illusion that the legacy of 19th century globalization would be interdependence. We were on the threshold, he argued, of an age of cooperation and shared interest in which conflict between nations would dissolve.

It only took four years for the hope to be vanquished when the failure to integrate the rise of Germany into the global order precipitated the most terrible destruction.

Today, we face a similar historical moment. We might look back on these years as the beginning of co-operative and effective interdependence. It might be an age in which responsible sovereign nations learned, together, how to cope with the risks of globalization.

We need to exercise our sovereignty with responsibility in recognition of the ties that now bind nations together. If we do so, then we will have banished the era of zero-sum international relations, and made a new start where a win for any us is a win for all of us. I believe the partnership between our great nations and I believe it can be done.