Rishi Sunak has insisted the so-called 'golden era' of British-China relations is "over" in his first major foreign policy speech as Prime Minister.
Mr Sunak said the UK Government must "evolve" its approach to Beijing as he highlighted protests in the country and the arrest of a BBC journalist last night.
But he also warned: "We cannot simply ignore China's significance in world affairs - to global economic stability or issues like climate change".
In a speech in Shanghai in 2015 the former Tory Chancellor George Osborne hailed a "golden era" for the UK's relationship with Beijing.
He said that Britain could be China's "best partner in the West".
Speaking at the Lord Mayor's Banquet on Monday evening, Mr Sunak said: "Let’s be clear, the so-called “golden era” is over, along with the naïve idea that trade would lead to social and political reform."
In recent weeks Tory MPs have called on Mr Sunak to adopt a more hardline approach to China and accused him of appearing to appease President Xi Jinping.
Tonight, Mr Sunak added: "Nor should we rely on simplistic Cold War rhetoric".
"We recognise China poses a systemic challenge to our values and interests, a challenge that grows more acute as it moves towards even greater authoritarianism."
His remarks come amid protests in China over the country's strict zero-Covid policy and the arrest of a BBC journalist Ed Lawrence covering the events.
Last night the broadcaster said it was "extremely concerned" over the treatment of Mr Lawrence, who was held for several hours before being released.
"During his arrest, he was beaten and kicked by the police," the BBC added.
Speaking on Monday evening, Mr Sunak said instead of listening to the protests, "the Chinese Government has chosen to crack down further, including by assaulting a BBC journalist".
"The media – and our parliamentarians – must be able to highlight these issues without sanction, including calling out abuses in Xinjiang – and the curtailment of freedom in Hong Kong."
But Shadow Foreign Secretary David Lammy described the speech as "thin as gruel".
He added: "All it shows is that once again the Conservative government is flip-flopping its rhetoric on China.
“The government urgently needs to publish its long-promised China strategy as well as its update to the Integrated Review that is already out of date.”
The Prime Minister, who travelled to the Ukrainian capital Kyiv earlier this month, also used his speech to highlight Russia's brutal invasion.
He said Vladimir Putin's focus is "shifting from bruising encounters on the battlefield to brutalising the civilian population".
"It was written in the scarred buildings and the piles of rubble lining the streets, in the stories of the first responders I met from liberated Kherson, from the torture chambers to the booby traps left in children's toys."
The PM added: "As the world comes together to watch the World Cup, I saw how an explosive device had been hidden inside a child's football – seeking to make it a weapon of war.
"It defies belief. So be in no doubt. We will stand with Ukraine for as long as it takes. We will maintain or increase our military aid next year.
"And we will provide new support for air defence, to protect the Ukrainian people and the critical infrastructure they rely on."
