Foreign minister Kevin Rudd seems not to be letting his impending heart surgery slow him down; yesterday he was in Bali for (among other things) the East Asia summit foreign ministers’ meeting, in preparation for the full scale heads of government meeting in November.

Although Australia manages to tie itself in knots over the occasional small boat crossing the Indian Ocean, there are a few more serious security issues in our region, and talks yesterday may have secured a breakthrough on one of them: the disputed sovereignty over the Spratly Islands, in the South China Sea.

Younger readers will probably be in the dark here, but the South China Sea was a scene of conflict back in 1974, when China resorted to force to seize the whole of the Paracel Islands, north of the Spratlys, from South Vietnam, resulting in a brief but bloody naval battle. China has occupied them ever since, although Vietnam refuses to recognise its claim.

The Paracels, however, were simple in comparison to the Spratlys, where numerous national claims conflict. China claims the whole archipelago — not just the government in Beijing, but also its rivals in Taiwan. Vietnam, Malaysia and the Philippines also claim substantial and overlapping areas, and Brunei and Indonesia both have interests in the adjacent sea bed. (One summary of the claims is at GlobalSecurity.org, and Le Monde has a gloriously complex map.)

For a long time no one worried much about the Spratlys. The different nations maintained small garrisons and weather stations on the tiny outcrops and seemed willing to live with the uncertainty. But as with many such places, resource exploitation has increased tensions: the area is said to be rich in oil and gas, and China’s ever-growing economic might makes it reluctant to allow anyone else a share of the action.

Hence the increased naval activity in the area in recent months, culminating in a visit by a group of Philippine politicians to one of the islands on Wednesday — described as a “sovereignty mission”. It was feared that the issue would overshadow the summit talks, which for the first time are including Russia and the United States.

Yesterday’s agreement, however, offers hope of a peaceful resolution. No one seems to have actually given any territorial ground, but the parties have agreed on guidelines for talks, which China hailed as a “milestone”. Rudd praised the deal as a display of “wise statesmanship”.

Superficially, China’s claim is implausible: the Spratlys are a long way from the Chinese mainland and much closer to the other claimants. But China once controlled much of south-east Asia, and despite various changes of regime it has maintained its regional ambitions. A popular Chinese school text of the 1950s contained a map of “Chinese territories taken by imperialism” that included not only the South China Sea but also Indochina, Thailand and Malaya.

The Spratlys, small as they might seem, are actually symptomatic of a much wider issue: can China adapt itself to the modern, law-governed international system? Or will its government, unfamiliar with the arts of compromise and used to imposing its will by force at home, always be a rogue element?

In the long run there is probably no good answer short of democratisation in China. But while we wait for that, anything that calms the waters in our neighbourhood is to be welcomed.