In the wake of President Trump’s state visit to China, and to avoid the consequences of the Thucydides Trap, China has a clear opportunity to demonstrate the benefits of a rules-based global system by leading by example in its own neighbourhood.

The Taiwan Strait is one of the highest-risk flashpoints in the world today. Reducing that risk through binding non-aggression commitments and joint development agreements would show that great powers can manage disputes through law and mutual interest, not coercion. The result would be tangible economic benefits for everyone involved and greater regional stability.

The first step is straightforward: China could sign bilateral non-aggression pacts with all neighbours it has active territorial disputes with, including Taiwan. Such agreements would commit each side to resolve differences through negotiation and to refrain from unilateral changes to the status quo by force. ASEAN’s Treaty of Amity and Cooperation offers a precedent. Ten Southeast Asian states plus external partners have acceded to it, and it has served as a baseline for managing disputes for decades.

Where sovereignty is contested, joint development agreements let parties share economic benefits while deferring the sovereignty question. The model already exists. Japan and South Korea set up a joint development zone in the East China Sea in 1974 to explore hydrocarbons in a disputed area. Malaysia and Thailand have operated a similar area in the Gulf of Thailand since 1990, sharing oil and gas revenues despite overlapping claims. China and Vietnam have also explored comparable frameworks in the Gulf of Tonkin.

A comparable framework for the Taiwan Strait could cover fisheries, seabed minerals, and renewable energy projects in agreed zones. Revenue and management could be split by a neutral formula, administered by a joint commission with third-party technical oversight.

The key is to start small and prove the mechanism works. Begin with low-political-risk areas like fisheries management and marine conservation. A joint fisheries zone with agreed quotas, monitoring, and dispute-resolution procedures can be set up within one to two years and would deliver immediate benefits to coastal communities on both sides.

Phase two would move to seabed resource surveys and joint renewable energy projects, using the institutions and trust built in phase one. Hydrocarbon development would only proceed once technical and legal frameworks are proven. This sequencing mirrors the Malaysia-Thailand model and avoids front-loading the most sensitive issues.

The difference between this approach and past models is that interim arrangements do not prejudge final sovereignty. Taiwan’s 23 million residents currently govern themselves, and any agreement that lasts decades must acknowledge that reality to be credible. A joint development zone could be set for 30 to 50 years, with renewal clauses tied to mutual consent and review mechanisms.

Military coercion raises the risk of miscalculation. Joint development and non-aggression pacts do not resolve sovereignty, but they create economic interdependence, reduce incentives for conflict, and give both sides a stake in stability. That is how most unresolved maritime boundary disputes have been managed elsewhere in Asia.

If China were to initiate such agreements, it would provide the clearest contemporary example that a great power can uphold a rules-based order in practice, not merely in rhetoric. That demonstration would do more to stabilise the region and strengthen the credibility of multilateral norms than any unilateral assertion of force.

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