After meeting with Chinese premier Wen Jiabao and finance minister Jin Renqing in Beijing, the Chancellor of the Exchequer said China was pushing ahead with fundamental reforms to expenditure management and its banking sector.
"In a modern open economy, capital account liberalisation is the way forward but so that it is not destabilising it will be best achieved in a sequenced way," Brown urged in a speech.
"So from experience a sequenced approach can benefit not only China but the global economy as a whole."
Brown said each continent had a part to play in boosting global growth: "America in addressing its deficits and Europe and Asia in addressing the vexed questions of structural reform."
Britain and China also agreed to work together to address the world's economic problems, promising a policy paper in time for the G20 meeting in October, under Beijing's presidency to examine ways to increase economic flexibility.
"This year Britain chairs the G7. And China chairs the G20," Brown said. "I am here...to support China's increasingly important role as a stabilising force in the world economy."
But Brown stressed that China's rising economic might should be not seen as a threat, but rather as an opportunity and said protectionist measures to quell China's booming exports - up 42 percent on the year in January - would be futile.
The US administration has already moved to block billions of dollars of clothing imports from China.
"While others may wish to see China and globalisation as a threat I see the rise of China and the new stage of globalisation not as a threat but as an opportunity," Brown said.
He plans to publish plans in three areas - financial services, science and education - that would help double British exports to China by 2007 and quadruple them by 2010.
China and Britain also agreed to co-operate to find ways to help international institutions like the International Monetary Fund adapt to the changing world economy. The IMF for instance could be more independent in its economic surveillance.
Brown travels to Shanghai on Tuesday where industry sources say that he will meet with executives at China's top car maker Shanghai Automotive Industry Corp (SAIC) about its possible joint venture with Britain's MG Rover.
SAIC has said talks with MG Rover to create a joint venture, which would provide the Chinese firm with a launch pad for sales to Europe, were at an advanced stage.
British media reports had suggested the British government feared the deal might collapse, threatening the loss of 6,000 jobs less than three months before British Prime Minister Tony Blair is expected to call a general election.