The most effective way to solve territorial disputes in the South China Sea is through negotiation and consultation, a senior Chinese diplomat said in New York on Thursday.

"As the biggest literal state of the South China Sea, China has been committed to pursuing peaceful development. The last thing we want to see is turmoil or even war in our neighborhood in the South China Sea," said former foreign minister Li Zhaoxing at an Asia Society event.

In his half-hour speech, Li, who also served as ambassador to the US from 1998 to 2001, looked back on the history of China's sovereignty over the South China Sea Islands and their adjacent waters, which he said has long been established.

The South China Sea only became an issue in the 1960s and '70s, when large oil reserves were discovered under the waters of the Nansha Islands and countries in the region began to illegally occupy some of the islands, Li said.

"Perhaps China is the biggest victim of the South China Sea issue," Li said.

Because the South China Sea is such an important shipping passage, lots of effort has been made by the Chinese government to maintain its peace and stability.

"While firmly upholding territorial sovereignty and maritime rights in the Nansha Islands in the South China Sea, the Chinese government has all alone solved disputes with countries directly concerned through negotiation and consultation in accordance with international law on the basis of respecting historical facts," Li said.

China maintains that disputes should be managed through rules and mechanisms; and regional peace and stability should be promoted by shelving differences and engaging in common development, said Li.

Li offered some examples. After years of intense communication and consultation, in November 2002, China and the Association of Southeast Asian Nations (ASEAN) signed the Declaration on the Conduct of Parties in the South China Sea (DoC).

In the DoC, all relevant parties undertook to resolve their territorial and jurisdictional disputes by peaceful means through friendly consultations and negotiations by sovereign states directly concerned.

In September 2013, China and ASEAN countries launched consultations for a Code of Conduct in the South China Sea (CoC), and achieved significant progress.