Malaysian Prime Minister Najib Razak appeared to side with Beijing as he called for claimants in the South China Sea to jointly develop resources to avoid conflict and prevent "extra-regional states" from becoming involved.
Najib cited a joint development zone in waters claimed by Thailand and Malaysia as a precedent that could be applied in the South China Sea.
"Agreeing to share prosperity, rather than let it divide us, is infinitely preferable to the alternative," Najib said in Kuala Lumpur.
Vietnam and the Philippines reject China's push for joint development in the waters, part of which are also claimed by Malaysia, Brunei and Taiwan. The US, Japan and the Philippines advocate international arbitration instead of joint development of the oil, gas and fishing industries.
Najib said a code of conduct for operating in the waters would be a good start to prevent tensions from escalating. He warned that involving unspecified "extra-regional states" may "add yet another layer of complexity to the dispute".
"For Asian nations, this problem is ours to solve," Najib said. "Should we stray from the path of dialogue and co-operation, we may pave the way for other parties to take remedial action to protect the freedom of navigation and safe passage."
At a meeting of defence officials in Singapore at the weekend, Qi Jianguo , deputy chief of the general staff of the People's Liberation Army, said Chinese patrols in disputed waters off its coasts were "totally legitimate". He spoke after US Defence Secretary Chuck Hagel said at the same meeting that the US "stands firmly against any coercive attempts to alter the status quo" in the seas.
China's so-called nine-dash line, which defines its territorial map of the region and first published in the 1940s, extends hundreds of kilometres south to equatorial waters off the Malaysian coast of Borneo. Chinese navy ships in March visited James Shoal off Malaysia, near where Royal Dutch Shell and Petroliam Nasional have oil and gas operations.
China National Offshore Oil Corporation estimates the South China Sea may hold about five times more undiscovered natural gas than the country's proved reserves, says the US Energy Information Administration.
Malaysia and Thailand in 1979 agreed to jointly develop oil and gas in a region of disputed waters. Natural gas from the area now makes up about 20 per cent of Thailand's domestic production, according to Energy Ministry statistics.
"Instead of passing on choppy waters to the next generation, we should endeavour to leave them a calmer sea," Najib said. "We should seek the common ground needed for an amicable understanding among the claimants."Topics: South China Sea Territorial Dispute Najib Razak