Speaking to students at Peking University, the Chancellor said:
I don’t want Britain to resent China’s success, I want us to celebrate it.
I don’t want us to try to resist your economic progress, I want Britain to share in it.
And I want, this week, us all to take the next big step in the relationship between Britain and China.
Because more jobs and investment in China mean more jobs and investment in Britain. And that equals better lives for all.
He set out how he sees China’s economy changing, and argued that the changing Chinese economy is a particular opportunity for Britain as China enters the next stage of its development and its demand for goods and services where Britain is a global leader increases.
There are some in the West who see China growing and they are nervous.
They think of the world as a cake - and the bigger the slice that China takes, the smaller the slice that they will get.
I totally and utterly reject that pessimistic view.
If we make the whole cake bigger, then all our peoples will benefit.
That should be the basis of our relationship with China.
The Chancellor told the students that there is no country in the west that is more open to investment with China, than Britain.
Not every country in the world is happy to see foreign investment - including Chinese investment.
There are some countries, including some in Europe, who think the answer to the global race is to erect trade barriers and find all sorts of ways of making clear that Chinese investment is not welcome.
Britain isn’t one of those countries.
That is what this visit is all about: Britain and China taking the next big step.
The Chancellor was joined at the question and answer session at the university by the Mayor of London, Boris Johnson, who is also in China.
The Chancellor will use his trip as a whole to strengthen strategic partnerships and secure specific investment deals that will provide jobs and growth in both countries.
Britain became the most popular European country for Chinese investment last year. It is now ranked 4th overall, up from 10th.
As part of strengthening the openness of the relationship between Britain and China, alongside his speech the Chancellor also announced that Britain is to simplify and streamline visa application rules for Chinese people and businesses visiting London.