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Whether China's rise can be peaceful or not draws a lot of attention in the study of international relations. Some argue that China's active territorial disputes with Japan, South East Asian states and Taiwan could spark fierce conflicts in the foreseeable future. However, the fact that since 1949 China has tried to solve 15 of its 19 territorial disputes with neighbors by offering 26 concessions draws a sharp contrast with its current standing. Why China made territorial concessions instead of bargaining hard over the territory lost through "unequal treaties" is puzzling. This paper tries to answer the question for what purpose China made territorial concessions. I argue that China conceded its disputed territory in order to ameliorate the threat it imposed on neighboring states so as to avoid the latter's direct confrontation or formation of a joint balancing coalition against China. China is able to reassure the threatened neighbors and to prevent balancing from them because territorial concession, with the feature of high cost and irreversibility, serves as a credible signal of a state's benign intention. [ABSTRACT FROM AUTHOR]

Although China has participated in 23 unique territorial disputes, China has defused or resolved the majority of them. Moreover, in resolving these disputes, China has usually pursued compromise agreements that divide contested territory and received a smaller share of land in the overall settlement. To explain this variation, I develop an opportunity cost model of territorial dispute settlement. In my model, leaders face strong incentives not to settle territorial disputes, lest they be punished at home or abandon an important international source of leverage. Facing these incentives, leaders will only settle territorial disputes when an increase in the opportunity costs of the dispute, such as poor relations with the opposing state, makes compromise more attractive. For China, ethnic geography shapes the underlying opportunity costs of its territorial disputes. China is much more likely to settle disputes over land frontiers in non-Han Chinese areas than disputes over Han Chinese areas or uninhabited offshore islands. Settlements occur when internal windows of vulnerability, such as border area instability or domestic political upheaval, suddenly and sharply increase the cost of disputing territory for China?’s leaders. These windows constitute rapid internal decreases in China?’s internal power, decreases that make territorial disputes more costly and settlements more attractive. [ABSTRACT FROM AUTHOR]