“Mr Osborne is making the main address of his five-day Chinese tour at the Shanghai stock exchange to say he deliberately chose “the epicentre of the volatility in financial markets this summer” to declare, “Britain and China – we will stick together”.

Still, linking Shanghai to the London Stock Exchange would mark a further significant step in the opening up of China’s markets, potentially allowing domestic Chinese access to a wide range of British and European stocks.

Mr Osborne’s visit, which covers thousands of miles and takes in four major cities, has so far been devoted to deepening the UK’s economic, financial and cultural links with China.

“Whatever the headlines, regardless of the challenges, we shouldn’t be running away from China”, Osborne told business leaders and students packed onto the trading floor of the exchange.

“We want to make sure that Chinese companies, perhaps partnering with British companies, can bid into the contracts when they’re let – but let’s be clear the contracts will be done in a completely impartial way”.

In other measures announced on Monday, it emerged that the People’s Bank of China is to issue short-term bonds in London denominated in the Chinese currency, the first time it has done so outside China.

Osborne threw his support behind China’s attempt to have its yuan, also known as the renminbi (RMB), to be included in the worldwide Monetary Fund’s select group of reserve currencies.

Also agreed in the annual UK-China economic and financial dialogue was a £50 million nuclear research centre, to be jointly funded by Britain and China and headquartered in the UK.

Mr Osborne said: “I believe our two countries are perfectly positioned to be partners in growth”.

He also announced a regional collaboration agreement between the United Kingdom county of Cumbia and China’s Sichuan province, “deepening commercial ties between the province and the North-West’s world-leading expertise in nuclear decommissioning and waste management”.

“Britain and China will stick together”.

“Britain should run towards China”.

“There is an ambition in China… that we need to match”, said the Chancellor.

Writing in the Telegraph last week – prior to early reports, chief executive Martin Gilbert said the recent declines suffered by Chinese investors had “vindicated” Aberdeen’s long-held house views on the country, and those of head of Asian equities Hugh Young. That’s why I’ve come to China again and again in this job.

Chinese officials responded with a rescue package, whose hallmarks include banning big shareholders from selling and government buying of shares.

“But isn’t it better to engage and to talk about these things rather than to stand on the sidelines and try and conduct some kind of megaphone diplomacy”.

“Let’s stick together to grow our economies”.

“We do not see a choice between securing growth and investment and raising human rights issues”, he said.