Zach Przystup - As expected, China brushed aside the US proposal for a freeze on provocative actions in the South China Sea at the recent ASEAN Regional Forum. Call it a wasted opportunity. It is becoming increasingly clear that China's claims to a peaceful rise suffer from a credibility deficit. In a recent Pew Research Poll, a majority of publics in eight countries across North and Southeast Asia said they "are concerned that territorial disputes between China and its neighbours will lead to a military conflict."

Those concerns are well-grounded. Whether cutting rare earth mineral exports to Tokyo, banana imports from the Philippines, or the exploration cables of Vietnamese survey vessels, Beijing has put its neighbours on notice. It is time for Beijing to cut a deal. Amidst growing concerns about the nature of its rise and intentions, China has a rare opportunity to prove it is a world leader, not just a world power. It should start by using diplomacy to settle territorial disputes in the East and South China Seas.

Historical claims, national passions, and competition over access to natural resources fuel these maritime disputes. In the East China Sea, China claims that Japan obtained the Senkaku/Diaoyu islands through wartime aggression, and that they should be returned in accordance with postwar treaties. For its part, Japan asserts that it discovered the islands as terra nullius, or unadministered land, and legally incorporated them in 1895.

Things get more convoluted further south. In the South China Sea, China, Taiwan, and Vietnam each claims sovereignty over all of the Spratly and Paracel Islands, while the Philippines, Malaysia, and Brunei hold partial claims to the former. China's claims are particularly expansive; its audacious nine-dash map encompasses 80% of the South China Sea. To make a long story short, the claimant states have their narratives, and they are sticking to them. The only way forward is to craft a new narrative.

China should take the lead by pursuing a joint development agreement in the East and South China Seas. Such arrangements set aside boundary negotiations so that natural resources can be jointly developed within an agreed upon period of time. Importantly, joint development allows states to sweep the sovereignty issue under the rug while they sweep the ocean floor for resources. As they benefit over time from access to these unlocked resources, states and their publics will likely be content to keep it there.

Some argue that Beijing lacks the political flexibility to pursue such an option; they contend that it has wedded itself to a hard line nationalist position in both disputes through its aggressive rhetoric and actions. This concern is understandable but overblown. Beijing has chosen mutual interests over mutual animosity before. In 1972, Beijing and Tokyo shelved the Senkaku/Diaoyu islands issue in order to normalize diplomatic relations, and did the same in 1978 to sign the Sino-Japanese Peace and Friendship Treaty. The Chinese Communist Party is stronger now than it was then, and can afford to let the sovereignty issue continue to collect dust. Ultimately, its legitimacy rests primarily on the tremendous economic growth it has generated over the last three decades, not its position on uninhabitable rocks.

It is in China's best interest to play a leading role in solving these crises. Doing so would provide much-needed legitimacy to its claims of a peaceful rise, and help slow Japan, India, and ASEAN's gravitation to the US for security assurances. Additionally, China would protect its relationship with the US from unnecessary confrontation that could be triggered by conflict and US security obligations in either sea. That is the last thing China needs after thirty years of unprecedented growth.

The most important reason China should lead is to invest in its own future. Given its smorgasbord of potential domestic flashpoints, Beijing would be wise to play the long game with the US and its neighbours. On the economic front, Beijing must manage the transition from an export-oriented to a demand-driven economy. The centrepiece of this strategy is a massive campaign of forced urbanization, in which Beijing plans to transplant 100 million people into newly constructed towns and cities by 2020. China is attempting nothing short of societal transformation; the number of things that could go wrong in this campaign alone is almost limitless.

As China's skies become hazier, the costs of its pollution problem are becoming clearer. Sixteen of the world's twenty most polluted cities call China home. A 2013 study by the British medical journal Lancet found that air pollution in China contributed to 1.2 million premature deaths in 2010. Lung cancer rates are soaring, life expectancy is plummeting, and demand for coal is rising. Furthermore, it is unclear how integrating 60% of the country's population into city living will help the Chinese Communist Party accomplish its stated goal of drastically reducing pollution by 2017. The Communist Party faces a catch-22: its legitimacy depends on continued economic prosperity, which in turn relies on continued environmental exploitation.

It is time for China to lead. With national policies that affect almost every country and human being, it can no longer ignore its global responsibilities. By working to reach a joint development agreement in the East and South China Seas, China could maintain its claims to sovereignty, gain access to natural resources in both seas, build a reservoir of goodwill with its neighbours, and signal its arrival as a world leader. China - and the world - would be much better off. –Asia Times Online