Investors must be careful not to equate China’s future status as the world’s largest economy with its being the world’s strongest, Anders Fogh Rasmussen has told the IPE Conference & Awards.

In a wide-ranging speech, the former NATO secretary general covered the conflicts in the Middle East, saying it was difficult to see a resolution to the problems in the region.

He also addressed China, the US economy and Russia, saying the former Soviet country was a “weak nation” suffering from a lack of economic reform and an over-reliance on oil and gas.

Rasmussen said China would place economic security – and its ability to trade – above all else, despite recently outlining a new approach to military engagement that placed a greater emphasis on an “offensive” military.

“I do not underestimate this Chinese assertiveness,” Rasmussen said, speaking at the conference in Barcelona.

“However, I still think the bottom line is that, on balance, China will prefer peaceful, constructive cooperation with the US instead of confrontation.”

He said China desperately needed international stability, and that the survival of “machine China” was dependant continued growth, which, in turn, required stability.

Rasmussen noted that the Chinese economy would gradually grow to become the largest in the world, accounting for approximately 40% of global GDP by 2014 – but he warned that such dominance was not the only measure by which to assess the economy.

“To be the biggest is not equivalent to being strongest,” he said.

He said the US would remain relevant as both an a centre of economic growth and global power for decades to come – partially down to the fact its two neighbours are peaceful, and its borders run along two oceans.

“Surrounded by peaceful neighbours and fish,” he said, “you can focus on exercising global leadership because you don’t have to deal with regional borders.”

Touching on the EU during questions from the audience, Rasmussen, who was prime minister of Denmark for eight years until 2009, also called for a more outward-looking union.

“It is very close to my heart to see Europe develop to take on a stronger role on the international stage,” Rasmussen said.

He explained that a range of issues – from the refugee crisis, the UK potentially leaving the EU to the ongoing euro-zone crisis – were conspiring to bring about a more introspective union.

He also questioned whether Greece would ever be able to repay debt accrued by successive governments.

“The fact is, the Greeks will never be able to repay their debt,” he said. “You will have to write off some debt [and], the only choice is between doing it by default or by design.”

He backed a number of reforms, including to free movement within the EU, supporting the UK’s stance that there should not be immediate access to social welfare systems for those immigrating from another member state.

“We need profound reform to our pension and retirement schemes,” he added, citing a need for higher retirement ages, including these in a list of “fundamental” reforms European states need to complete if they wish to become influential on the international stage.