When the Japan-China Treaty of Peace and Friendship was negotiated in late 1970s, Japan’s Prime Minister Takeo Fukuda asked China’s leader Deng Xiaoping how they should deal with a contested territorial claim over a group of uninhibited islands (Diaoyu/Senkaku) in the South China Sea.

Deng did not want that issue to hold up China’s economic development by compromising trade and investment transactions with Japan. He, therefore, told his Japanese host that they should leave that to future generations.

The problem is that the present Chinese and Japanese leaders are none the wiser. They are ready to go to war over those islands that Japan took from Qing Dynasty during the First Sino-Japanese War in 1894-95, claiming that they were terra nullius (territory belonging to no one).

That, apparently, is not true because both countries have incontrovertible evidence that Diaoyu islands are part of China.

An additional complication is that the U.S. would be drawn into the Sino-Japanese conflict by virtue of Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and Security.

But the ultimate complication is that China considers more than 80% of South China Sea as its sovereign territory. That is a serious problem because Beijing’s maritime borders (the “nine-dash line”) have no legal value in terms of the United Nations Convention on the Law of the Sea (UNCLOS) -- and they also clash with similar claims by Brunei, Malaysia, Philippines and Vietnam.

Let Asians work it out

China wants to solve these problems by means of the Code of Conduct of Parties in the South China Sea, and in bilateral consultations with its ASEAN (ten members of the Association of Southeast Asian Nations) neighbors. A declaration to that effect was signed in Phnom Penh, Cambodia, in 2002. The negotiations are still going on.

Beijing is accusing Washington of sabotaging that process by “meddling in Asian affairs.” China’s more serious complaint is that the U.S. is challenging its territorial integrity with “freedom of navigation operations” in the South China Sea.

All that has led to a U.S.-China standoff where the only “guardrail” to a military conflict is an emergency hotline to avoid “miscalculations and misunderstandings.”

Taiwan is geographically part of that problem, but its political and strategic importance is defined by Beijing’s claim that the self-governed island is China’s internal matter and the essence of the one-China principle the rest of the world is expected to follow.

Here again, Beijing is accusing the U.S. of reneging on its commitment to the one-China principle by arming Taiwan and maintaining relations inappropriate with the island’s status as a province of China. Washington is not denying arms sales and unofficial contacts, but it is opposed to any attempt by Beijing or Taipei to change Taiwan’s status quo by force.

The U.S. should fix its problems

That, of course, is unacceptable to Beijing – because it is considered as Washington’s interference in China’s internal affairs.

For China, Taiwan remains the “core of its red lines” and the ultimate casus belli.

By comparison, the U.S.-China trade and investment frictions, and competition for political and economic spheres of influence, are minor disputes, even though they contribute to unsettled and unfriendly bilateral relations.

So, what does China want?

China’s relentless quest for economic development has not changed since Deng Xiaoping’s days when he wanted more jobs and incomes for an impoverished China, and a more open and pragmatic Chinese society recovering from hardships of the cultural revolution.

China does not want to go to war with the U.S. or anybody else, although it might slap some misbehaving neighbors.

Beijing still has to get 56 million people out of utter poverty. China’s vast project of urbanization is a work in progress, and so is its inadequate welfare system and the “modernization and rejuvenation” of Chinese society.

The best the U.S. could do with China is to keep a free, fair and balanced trade. And to compete in the world economy and finance, Washington should urgently correct structural problems of its unsteady economic growth. The U.S. also needs massive investments in infrastructure, social welfare, education and science.

America’s security and prestige as a beacon to the world need no hybrid and proxy wars. Washington’s allies and friends should be weaned off their centuries’ old visceral hatreds to use their considerable material and cultural resources for peace and economic development.

That’s what it would take for America to show the way and embrace the Global South with 85% of the world population that may go to China.