Visiting British Foreign Secretary Philip Hammond told a Beijing audience Wednesday that competing territorial claims in the South China Sea, a key global trade artery, risk boiling over and must be resolved peacefully.

China claims most of the South China Sea, overlapping with areas the Philippines, Brunei, Malaysia, Vietnam and Taiwan deem to be their territory.

Beijing has been pouring massive amounts of sand to expand and fortify small reefs and build facilities in the area, which it says are meant to promote maritime and navigational safety and scientific research, as well as having military purposes.

There was "tension and the risk of escalation" in the area, Hammond told students at the capital's elite Peking University, adding: "We want to see claims dealt with by rules-based, not power-based, solutions in Asia as elsewhere."

As well as China, most of the Southeast Asian claimants have also built facilities in the waters.

The United States and Southeast Asian nations have called for a halt to further island-expansion and construction by Beijing, though China's foreign minister said last week that land reclamation had stopped.

Britain depends on global sea lanes for the delivery of 95 percent of its trade and "has a strong interest in the stability of the South China Sea region", Hammond said, adding $5 trillion worth of trade passes through the area every year.

The issue needed to be addressed "in a way which is consistent with the long-term peace and stability of the region, with freedom of navigation and overflight, and in accordance with international law, including the Law of the Sea", he said.

China has a growing role on the global diplomatic stage and Hammond said that "with increasing power comes increasing responsibility".

Hammond was in China for high-level talks ahead of a planned state visit to Britain in October by Chinese President Xi Jinping, during which he will stay with Queen Elizabeth II at Buckingham Palace.

The countries have been making efforts to improve ties that were strained when British Prime Minister David Cameron met exiled Tibetan spiritual leader the Dalai Lama in 2012.

London and Beijing have also clashed over democracy protests last year in Hong Kong, which Britain handed back to China in 1997.

But in March, Britain was the first European country to declare it would join China's new Asian Infrastructure Investment Bank (AIIB) despite opposition from close ally the United States.

Hammond was scheduled to meet State Councillor Yang Jiechi, China's top foreign policy official on Thursday, according to a Foreign Office statement, and they would discuss issues including foreign and security policy, global efforts on health and a major climate summit in Paris later this year.

He will also hold discussions with Lu Wei, China's top cyber security official, the statement said.