Mr Miliband inaugurated the British pavilion at the Shanghai Expo
The UK Foreign Secretary David Miliband has called on China to build an economy which is not only more efficient but also more stable and just.
Mr Miliband, who is in China to hold discussions with the country's political leaders, made the appeal in a speech to a think tank in Shanghai.
He said the two countries' relationship had difficulties but they wanted to be partners, not competitors.
He added: "Our future and China's future are linked together."
Mr Miliband also inaugurated the British pavilion at the Shanghai Expo.
Britain and China have disagreed over issues including climate change, Iran's nuclear programme and executed British citizen Akmal Shaikh.
In his speech, Mr Miliband highlighted the importance of workers' rights, property rights and free access to information.
The BBC's Chris Hogg in Shanghai said Mr Miliband was also trying to promote the idea that China's growing middle class offered an opportunity for British business, but acknowledged hurdles needed to be overcome.
He said Mr Miliband singled out the risk of protectionism as a barrier to greater prosperity for both countries.
During his visit, Mr Miliband will seek to persuade China to drop its opposition to a fourth round of sanctions against Iran over its uranium enrichment programme.
The US, France, the UK, Russia, China and Germany, otherwise known as the "P5 +1", are currently discussing the possibility of sanctions.
Iran insists its enrichment programme is for civilian use, but there are concerns it is trying to develop a nuclear bomb.
Late last year, relations were strained between China and Britain when China ignored personal appeals from British Prime Minister Gordon Brown not to execute 53-year-old Briton Akmal Shaikh for drug smuggling.
Mr Shaikh's family had claimed that he was mentally ill.
Mr Miliband will argue for a fourth round of sanctions against Iran
There has also been a dispute over claims that China "hijacked" efforts to reach an agreement at the climate summit in Copenhagen.
Climate Change Secretary Ed Miliband had accused China of vetoing two agreements on limiting emissions, but Beijing said the accusations were a political plot.
The foreign secretary said China recognised the UK as an important partner, but he acknowledged there were areas of dispute.
He added: "I think China wants to have a relationship where we are able to find areas of common ground, but it's also important that where there are disagreements we don't hide them and that's what it means to be in an effective modern partnership.
"Mature relationships don't depend on being in agreement all the time.
"They actually blossom and prosper when we recognise that there can be differences with dialogue."
Mr Miliband said he would also raise the issue of human rights with senior politicians over the next few days, with no questions being off the agenda.
He will meet his Chinese counterpart Yang Jiechi and Prime Minister Wen Jiabao on Tuesday and deliver a talk at Beijing's Foreign Affairs University.