TIANJIN, Sept. 26 (Xinhua) -- EU Trade Commissioner Peter Mandelson said in Tianjin on Friday night that the lesson from the current financial crisis is to set up a new regulatory paradigm that reflects global interdependence and the way the global economy actually works.

"The globalization demands a new regulatory paradigm – smarter regulation, regulation that reflects our interdependence and the way the global economy actually works," said Mandelson, who is in this north China metropolis to participate in the 2008 Summer Davos, in a speech to European business people in Tianjin.

Mandelson said it has been an extraordinary few weeks on the financial markets with consequences across the global economy, starting in the United States.

The costs of this crisis will be felt by all countries, including China through changing stock market sentiment, falling inward investment and a fall in export demand tied to falling consumer spending in Europe and the US, he noted.

"You could not find a more complex and unfortunate metaphor for our global economic interdependence," he said.

Mandelson said it will be a mistake if some people blame this financial crisis on globalization itself, or use it as a pretext for economic nationalism.

"The development of a global economy has delivered immense benefits to all of us -- not least here in China where hundreds of millions have been lifted from poverty, as a result of China's growth and international integration," he said.

He said it's time to reassert the value of financial globalization "Now is the moment to defend the value of an open global market and the importance of long term foreign investment. The kind of money that builds businesses rather than just betting on them," he added.

The EU trade commissioner pointed out that the current financial crisis has only reinforced the need to create a global dialogue and framework on financial globalization and investment that extends beyond the developed world and takes in the rising powers of the emerging world. He also called for new mechanisms to strengthen the IMF's function as an early warning system for financial instability.