Prime Minister John Key says New Zealand would prefer a diplomatic solution to territorial disputes in Asia.
Tension over the resource-rich South China Sea between China and other claimants has prompted the Association of South East Asian Nations (Asean) to pursue a code of conduct to deal with disputes at its summit in Brunei.
Mr Key, who's attending a summit attached to the Asean forum, met Japanese Prime Minister Shinzo Abe to discuss trade and territorial matters.
He says Mr Abe, who has clashed with Beijing on these issues, hopes a peaceful solution can be found.
Mr Key says it's not in anyone's interest for this to escalate further.
China favours resolving territorial disputes through talks between claimant states.