Napoleon warned ''Let China sleep; when she wakes, she will shake the world''. Lawrence James''s magisterial history analyses the relationship between Britain and China between the beginning of the Opium Wars in 1839 and the transfer of power in Hong Kong in 1997. THE LION AND THE DRAGON reveals the part that Britain played in the awakening of China, then covers relations between the two countries during the period when an aroused China did indeed shake the world. Lawrence James also follows the parallel trajectories of four competitive empires - the British, the Chinese, the Russian and the Japanese - during the nineteenth and twentieth centuries, and then the fortunes of a fifth imperial power, the United States. Successive British governments saw China as a source of wealth which needed to be protected. Local objections were seen off by force (the ''Opium'' wars of 1839-42, 1856-7 and 1859-60) whose results proved that the Qing emperors could not protect their country. Indian troops were deployed in each campaign and manned Britain''s small garrisons in Hong Kong, Shanghai and other Treaty ports. Yet Britain never sought to make China into another India. Rather it allowed the emperors and their officials to govern, so long as they were docile and amenable to British needs. Paramount were the internal stability and fiscal responsibility that were the lubricants of trade. A unified nation with economic and military muscle, and aware of its distant past as one of the great nations of the world, has been intent on reversing her recent history. Lawrence James vividly chronicles a time when this huge nation''s divisions encouraged foreigners to treat her as a treasure-house to be plundered at will. This warning from history explains why China''s present rulers brook neither dissent nor popular unrest.