3. The situation in the South China Sea must cool down.

The temperature of the South China Sea is now high enough. Some people even clamored for "fight tonight". If such momentum went unchecked, accidents could happen and the South China Sea might sink into chaos and so might the entire Asia. Should that happen, it will be countries around the South China Sea, the Asian countries and even the US itself that will suffer. We must not let this happen, and not allow Asia to become another West Asia and North Africa. Anyone intent on fueling the flames and unleashing disastrous outcomes will be held accountable by history.

Cooling down temperatures in the South China Sea requires concrete efforts by all countries concerned.

First, the urgent priority is to stop the arbitration case initiated by the Philippines. If the tribunal insisted on its way and produced an "award", no one and no country should implement the award in any form, much less to force China into implementation. And the Philippines must be dissuaded from making any further provocation. Otherwise, China would not sit idle.

Second, China and the US have neither disputes over even one inch of territory nor fundamental clash of interests in the South China Sea. The South China Sea issue should not be allowed to define China-US relations. Rather, this issue should be put in perspective against larger bilateral relations and be transformed into an area of cooperation rather than arena for confrontation. We must forestall undue disruptions or damages to the overall China-US relations as a result of differences over this issue. The people of China and the US will not forgive us, if we let the basically sound China-US relations cultivated by both sides over the past forty years be ruined by mis-judgment and mishandling over this issue.

I have made China's position and views clear. Let me conclude with a few more personal observations.

First of all, even if the US is unable to go back to its position of recognizing China's sovereignty over the Nansha Islands, it should honor its stated position of not taking sides on issues concerning territorial disputes. If the US is truly committed to peace and stability in the South China Sea and the wider Asia-Pacific and a rule-based order, it should judge the issue on its merits, respect facts, oppose or restrain provocations by certain countries against China and encourage countries directly concerned to settle the disputes peacefully through negotiation and consultation and implement the DOC fully and effectively.

Second, one should not be too ready to frame the South China Sea issue as a strategic issue or interpret and predict China's behavior by drawing from western theories of international relations and history. It would be nothing but baseless speculation to assert that China wants to make the South China Sea an Asian Caribbean Sea and impose the Monroe Doctrine to exclude the US from Asia or that China is trying to compete with the US for dominance in the South China Sea, Asia and even the world. Unlike traditional western powers, China, an oriental civilization that goes back five thousand years, has distinctive culture, values, political thinking and view of the world. For China, the South China Sea issue is all about territorial sovereignty, security, development and maritime rights and interests. It is all about preventing further tragic losses of territory. China's thinking is as simple as that. And there is no other agenda behind it. We have no intention or capability to engage in "strategic rivalry" with anyone. We have no ambition to rule Asia, still less the Earth. Even in the context of the issue in question, we have never claimed we own the entire South China Sea. We only have one ambition, which is to manage our own affairs well and ensure a decent life and dignity for the nearly 1.4 billion Chinese people. China's right to rise peacefully and deliver a better life for its people should not and will not be taken away by anyone.

Third, the US's heavy-handed intervention in the South China Sea issue needs to be scaled back. There is deep concern about the US continued reinforcement of its military alliances in the Asia-Pacific and forward deployment of its military assets. Since last year, the US has intensified its close-in reconnaissance and "Freedom of Navigation" operations targeted at China. The rhetoric of a few people in the US has become blatantly confrontational. How would you feel if you were Chinese and read in the newspapers or watch on TV reports and footages about US aircraft carriers, naval ships and fighter jets flexing muscles right at your doorstep and hear a senior US military official telling the troops to be ready "to fight tonight"? Wouldn't you consider it unhelpful to the US image in the world? This is certainly not the way China and the US should interact with each other.

Having said that, we in China would not be intimidated by the US actions, not even if the US sent all the ten aircraft carriers to the South China Sea. Furthermore, US intervention on the issue has led some countries to believe that the US is on their side and they stand to gain from the competition between major countries. As a result, we have seen more provocations from these countries, adding uncertainties and escalating tensions in the South China Sea. This, in fact, is not in the interest of the US. The risk for the US is that it may be dragged into trouble against its own will and pay an unexpectedly heavy price. Hopefully, the countries, whose recent course of action has been driven by reckless impulse, will engage in some cool-headed thinking and realize that China has been living alongside them peacefully as a friendly neighbor for several thousand years. Neither had this neighbor invaded anyone nor interfered in any country's internal affairs. Neither is this neighbor pursuing any regime change nor building confrontational political or military blocs. All China's endeavors are focused on protecting its sovereignty, security and development interests and it has no intention to seek dominance or hegemony. Those countries will eventually see that it is the friendly China that will remain their neighbor for generations to come instead of some faraway superpower that is, for the moment, their ally.

Fourth, China and the US need to find ways to manage their differences constructively. As I said, the South China Sea issue boils down to disputes between China and a few other littoral states. Given that these disputes are not going to be settled any time soon, the key question is how these disputes should be managed pending final resolution. Should parties provoke each other over these disputes, aggravate tensions and encourage confrontation? Or should they downplay the disputes, shelve their differences and expand cooperation? The answer is apparent. China has all along been committed to resolving the disputes peacefully through negotiation and consultation. Even though the South China Sea is clearly not an issue between China and the US, China is willing to maintain communication with the US on maritime issues and work with the US and all other parties to keep the situation under control, considering our shared interest in peace and stability in the Asia-Pacific. Our two sides may work together to find ways to jointly promote regional peace and stability through constructive dialogue on matters such as regional confidence-building, effectively managing disputes and advancing maritime practical cooperation.

Fifth, China and the US need to expand their positive maritime agenda. Both countries support freedom of navigation and overflight. As long as the US does not use that as a pretext to challenge China's sovereignty and security interests, the two countries can cooperate on a global level to safeguard such freedom. Closer cooperation is also called for in a wide range of ocean-related fields such as marine environmental protection, marine science and research and maritime law-enforcement to give a stronger boost to China-US interaction at sea.

I was born at the height of the Second World War, and as a 75-year-old man, I either lived through or witnessed the evolutions of relations between some major countries. I have studied the Korean War, Vietnam War and Iraq War and how these wars took a heavy toll on the US. Since the turn of the century, I had the further privilege to chair China's strategic dialogues with the US and some other major countries, which were of great depth and quality and helped produce common thinking between our two countries on building a new model of major-country relationship. I love my country and people and have nothing but profound goodwill towards the American people. I wish for the best of China-US relations and for both our countries. We must work together to avoid strategic mistakes pushing us into conflict or confrontation. Some of my remarks today might sound a little bit harsh, but I said them with the best of intentions. You may consider them words spoken from the heart of a friend of the US.

Wang Anshi, a famous Chinese poet who lived in the Northern Song Dynasty wrote, "We should not be afraid of the clouds blocking our view, because we already are at the highest elevation." It means that only by adopting a strategic vision and minimizing distractions can one understand where the trend is moving. In a globalized world full of opportunities and challenges, as the biggest developing and developed countries and the world's two largest economies, China and the US shoulder more common responsibilities and face more common challenges in driving world economic recovery and promoting international peace and security. There is so much potential of cooperation yet to be tapped. What we need is not a microscope to enlarge our differences, but a telescope to look ahead and focus on cooperation. Both Chinese and Americans are great nations with insight and vision. As long as the two sides work for common interests, respect each other, treat each other as equals, have candid dialogue, and expand common ground, China and the US will be able to manage differences and find the key to turning those issues into opportunities of working together. I have no doubt that China-US relations will embrace a great future.

To conclude, I wish the dialogue a full success.