Fifth, China maintains strong commitment to win-win cooperation.

China values friendly and cooperative relationship with its neighbours. We have taken the initiative to call on all parties involved to "shelf differences and engage in joint development" in the South China Sea. This provides a useful approach to the resolution of the issue. And it is an approach that takes into consideration the interest of all parties concerned. To put this into practice, China has engaged in a series of cooperation initiatives with relevant countries.

In 2005, oil companies from China, Vietnam and the Philippines signed the "Agreement for Joint Marine Seismic Undertaking in Certain Areas in the South China Sea". This was an effort for joint development of oil and gas resources in the South China Sea.

In 2011, China announced the establishment of China-ASEAN Maritime Cooperation Fund with a total of three billion RMB yuan, or more than 300 million pounds. This was set up to fund maritime cooperation projects.

Two years ago, China put forward the initiative of the 21st century Maritime Silk Road. This demonstrated the mutual benefits which the ASEAN countries can enjoy by becoming regional hubs of development. These measures and initiatives are evidence of China's efforts and good faith in seeking further and deeper maritime cooperation with its neighbours.

The aforesaid five "Commitments" constitute China's position on the South China Sea. They demonstrate China's sincerity:

• For resolving the issues.

• For securing the regional peace and stability.

• And for promoting the common development in China's neighborhood.

Recently a number of hot issues have cropped up with regard to the South China Sea. In turn I will share with you my views.

The first one is about the "arbitration"

The reference to the Permanent Court of Arbitration (PCA) was unilaterally initiated by the Philippines. Many media reports are creating misunderstanding by not explaining clearly this circumstances of the ‘arbitration'.

A crucial point is that this is not a court of law. The PCA itself states: "The PCA is not a court in the traditional sense, but a permanent framework for arbitral tribunals…"

For any arbitration to work it requires the proactive participation and agreement of both sides. Another critical point is that China rejected to participate in the arbitration at the PCA. From the very start of the reference from the Philipinnes for the arbitration China made it clear this was not an acceptable way to resolve the dispute.

Some media and politicians are now ramping up this topic of arbitration. They are erroneously making these claims:

• If China does not accept the ruling of the arbitration panel it will be breaking international law.

• It would be seen as "violating the international law" and "undermining the rule-based international system".

This is completely wrong.

China's rejection of the arbitration and non-participation in the arbitral process is an act of exercising its legitimate rights empowered by the international law.

In contrast, it is the Philippines who is challenging the legal and moral bottom line of the international community because the arbitration is totally unreasonable, unfair and illegal.

My second point about the arbitration is that it is unreasonable.

It is not reasonable because the Philippines went against its commitment to China and other ASEAN countries. Let me briefly summarise the logic of this point. China and the Philippines reached a number of bilateral agreements long ago on resolving disputes through bilateral negotiations. In the Declaration of Conduct reached between China and Philippines and other ASEAN countries, it is clearly stipulated that "the parties concerned undertake to resolve their territorial and jurisdictional disputes by peaceful means."

In 2011, the Philippines issued a joint statement with China to reaffirm its commitment to negotiations and consultations. However, a year later, it suddenly went back on its clear written commitment. Without notifying China, or even asking for consent from China, the Philipinnes initiated the arbitration against China unilaterally. "Pacta sunt servanda" is a basic rule in international relations. This is the bottom line of morality that every country must strictly observe. To put it simply, the Philippines has reneged on its words and deeds.

Another point is that the arbitration is unfair.

It is unfair because the islands in the arbitration case are the sovereignty property of China since ancient times. What the Philippines is doing is robbing its neighbour and asking the court to rule in its favour over the ownership of the booty. No one in the world should find this reasonable.

Here in Britain, there is always an emphasis on a "rule-based international system". But if rules can be abused, as they are in the Philippine arbitration, what should we expect from such rules and order?

The arbitration is illegal for three apparent reasons:

First UNCLOS stipulates that States Parties have the right to settle a dispute by any peaceful means of their own choice. The aforementioned arbitration was unilaterally forced ahead by the Philippines, who did not seek consent from China. This violates China's legitimate right under the international law.

Second UNCLOS also states:

"If the States Parties have agreed to seek settlement of the dispute by a peaceful means of their own choice, the (arbitration) procedures apply only where no settlement has been reached by recourse to such means and the agreement between the parties does not exclude any further procedure."

China has always been open to bilateral means and clearly bilateral means between China and the Philippines has not been exhausted.

Third, UNCLOS states:

"When a dispute arises between State Parties concerning the interpretation or application of this Convention, the parties to the dispute shall proceed expeditiously to an exchange of views regarding its settlement by negotiation or other peaceful means."

However, the Philippines have never had any consultations with China. Its unilateral initiation of the arbitration is an overt violation of law.

It should also be noted, for the record, that both China and the Phillipinnes signed and ratified UNCLOS. Compared with what the Philippines did, China has truly implemented and championed the international law.

With the PCA the 15 submissions made by the Philippines concern territorial sovereignty and maritime delimitation. The UNCLOS has no jurisdiction over issues related to sovereignty.

As for maritime delimitation, China made a declaration in 2006 in accordance with Article 298 of the UNCLOS. This made it very clear China would exclude disputes on maritime delimitation from compulsory arbitration. So China has exercised its legitimate rights conferred by the UNCLOS. China's action complies with the international law.

It should be noted that over 30 other countries, including the UK, have made similar declarations on the same principle of exclusion. These declarations have constituted an inseparable part of the UNCLOS. The reasonable and legitimate appeals and concerns of these countries should be considered. If the Philippines' arbitration case became a convention to be followed, then any of these 30 countries could be dragged into arbitration without prior notice. This would be a serious damage to state sovereign, international order and the dignity and authority of the international law.

There has been speculation in the media that the PCA may soon make public its report on the so called ‘arbitration' triggered by the Philipinnes.

China is not hiding away from any outcome. China has been totally consistent in its respect for international law. What China refuses to do is participate, accept, recognize or implement any arbitration that has no legitimacy in upholding international law.

The PCA is running a risk of undermining its authority and legitimacy. The PCA has created a situation where the arbitration is clearly unreasonable, unfair and illegal. Despite this the PCA has still chosen to proceed with the arbitration with only the Philipinnes participating. This raises grave concern about the PCA impartiality and legitimacy. It has also call into question the political attention behind the arbitration. The arbitration in essence is a political initiative under the cloak of law. China will never accept the result whatever comes from the PCA.

Although China rejects the arbitration, the door to bilateral negotiation remains open. China and the Philippines are close neighbors. The Chinese and the Philipinne peoples have had a long tradition of friendly ties. The Philippines has just elected a new President. We hope that the new Philippine government will work with China on a proper settlement of differences and bring the situation in the South China Sea back on track following the principles established by UNCLOS and international law.

Another issue I want to talk about is the developments on China's islands in the South China Sea.

Development on some of the Nansha islands began a few years ago. The building efforts will improve the living conditions on the islands and will serve mainly civilian purposes. This includes providing necessary and emergency public services to China and to other countries in and from outside the region. The facilities built include lighthouses, maritime communication facilities, search and rescue facilities and medical centers. They will enable China to better fulfill its international responsibility and obligations, such as maritime search and rescue, disaster prevention and relief, maritime scientific research, meteorological observation, eco-environmental protection, navigation safety and fishing services.

There are necessary defence facilities deployed according to Chinese security assessments. Such deployment on China's own islands falls within the right of self-protection that every sovereign state is entitled to under international law.

In January 2016, according to Reuters news agency, it stated that:

"Some shippers believe a greater Chinese presence could actually improve safety."

The Reuters report quoted ship owners saying:

"If China is to base search-and-rescue assets on the (disputed) islands then there would potentially be faster response times, improving the chances of rescue and survival."

Earlier I described the crucial importance to international trade of the safe and free of navigation for ships through the South China Sea. Reasonable observers would then applaud China's investment and actions to make this critical international artery safer.

However, some people complain about the scale and speed of the building efforts. I want to remind these people that scale and speed are not the benchmark for right and wrong. The scale and speed of China's building efforts match China's international responsibility in the South China Sea. Why would China sit on its hands and refrain from doing the right things simply because of its size?

Some others accuse China of "changing the status quo". I would like to ask this question: What is the "status quo"?

China's construction takes place on its own islands. China is not changing any "status quo".

And I would also like to ask those who are so keen on not "changing the status quo": Why are they silent when some countries illegally occupied China's islands and went in for large-scale construction activities there?

The third issue is the so called "militarisation" of the South China Sea.

Recently the "militarisation" has been hyped up and the United States shouts the loudest. However, it is not difficult to see who is "militarising" the South China Sea.

More than half of the US military force is deployed in Asia-Pacific. Yet, this is a region that has been largely peaceful and stable for many years.

In addition to this huge military force, the USA, together with its allies in the region, frequently flexes its military muscles. This is shown with the conduct of highly-targeted military drills. Then there are the military jets and warships on close-in reconnaissance in the nearby waters and air space of China's islands and reefs. It is these provocative and hostile actions that have raised the tension in the South China Sea. These acts have sent wrong signals to Philippines and others who have recklessly deployed military facilities on their illegally occupied islands.

The answer to the question of who is "militarising" the South China Sea is nothing but self-evident. Going forward it is the hope of China that the United States:

• Will act as a big country with responsibility.

• Be prudent in what it says or does on this complicated issue.

• Commit to and respect widely agreed international law, such as UNCLOS.

• And work with China to safeguard stability and peace.

Therefore, to solve the "militarisation" issue, the United States needs to:

• First of all, stop its dangerous provocations that challenge China's sovereignty and security.

• Secondly, stop being provocative with its "militarisation".

• And thirdly, take concrete steps to facilitate peace and stability in the region.

Ladies and Gentlemen,

Complicated and sensitive as the South China Sea issue is, the region has maintained overall stability thanks to the joint efforts of China and its neighbours. China will, as it grows in strength, make greater contribution to the stability and prosperity of the South China Sea region. As President Xi Jinping once said, China pursues maritime power through peace, development and win-win cooperation.

What China has achieved today can be largely attributed to its path of peaceful development. And China will keep to this path.

Looking into the future:

• China is confident and capable of resolving disputes through negotiations and consultations.

• China has shown a consistent commitment to upholding international law.

• China has been continuous in safeguarding peace and stability of the South China Sea through cooperation.

• China is ready to join hands with other countries to create peaceful resolution.

• And China can always be counted on to build the South China Sea into a sea of peace, a sea of friendship and a sea of cooperation.