Last time I was in China I was told that the boom in construction in Shanghai is so intense that its street maps have to be redone every few months.

It's a useful image for China itself – because China is the boom that is redrawing the map. It's redrawing the economic map.

When we in Europe and the US see China from the outside, we see an export powerhouse. We also see a market for our own goods and services.

As one nineteenth century Englishman put it: if everyone in China lengthened their shirt tails by a foot, the textile mills of England would spin for a year. The twenty-first century version would run: if everyone in China drove a Volkswagen. Or drank Bordeaux. Or had a Barclays bank account. Which they may yet.

China should transform its superheated growth model into something that is economically more balanced, and environmentally more sustainable.

The mistake would be to imagine that we in Europe, and in the US don't have a stake in China's successful transformation. We have the biggest stake imaginable.

Whatever our political differences, our interdependence remains a central fact of the global political economy.

China is taking up a lot of the slack in a slowing world economy. It is the indispensable partner for a serious climate change strategy. It will reshape the political dynamic in the UN, in Africa, and in Asia.

As China grows, so will our mutual interests. Our need to help China come to terms with the vast challenges it faces will grow.

I say this because some appear to assume that a course of direct confrontation in connection with the Olympics and Tibet serves our interests. But our concerns, our protests must go hand in hand with a strategy for ensuring that China continues to look outward.

There is only one thing more frightening than China's exponential growth. It is that growth suddenly stalling or crashing. China's economic failure would be catastrophic – for China and for us.

We will not be able to dictate the solutions to China's problems. But we do not have the luxury of ignoring them either. We must also not lose sight of the fact that we are bound to work with China, to live alongside China, to help China succeed. China faces huge pressures from within and without. The industrial policies that drove its development to date are being rethought, and this will affect how we invest in China in the future. China is searching not just for a presence in global markets, but for outlets for its products in global brands.

The capital model that underwrote the Chinese boom is pressing against the limits of sustainability. The Chinese banking sector is hobbled with high levels of bad or highly vulnerable debt.

The export sector is overheated by cheap capital. Foreign exchange reserves are being accumulated at unsustainable and inflationary levels.