BEIJING (Reuters) - China said on Thursday it had issued a formal protest after Australia announced it would continue to exercise its right to freedom of navigation and overflight in the South China Sea following a court ruling against China’s claims.

Chinese dredging vessels are purportedly seen in the waters around Mischief Reef in the disputed Spratly Islands in the South China Sea in this still image from video taken by a P-8A Poseidon surveillance aircraft provided by the United States Navy May 21, 2015. U.S. Navy/Handout via Reuters/File Photo

The Permanent Court of Arbitration in The Hague ruled on Tuesday that China had no historic claim to the waters and it had violated the Philippines’ economic and sovereign rights.

China rejected the ruling, having declined to participate in the case saying the court had no jurisdiction. Philippines President Rodrigo Duterte said late on Thursday he wanted to start talks with China, although he suggested some careful thinking would be needed first.

Australian Foreign Minister Julie Bishop urged all South China Sea claimants to resolve their disputes peacefully, saying Canberra would keep exercising its international rights to freedom of navigation and overflight, and support the right of others to do the same.

Chinese Foreign Ministry spokesman Lu Kang said China had formally protested against Australia’s “wrong remarks”, and that China hopes Australia does nothing to harm regional peace and stability.

“Honestly speaking, I’m a bit shocked at Bishop’s comments,” Lu said.

Australia should join the majority of the international community in not taking the result of the “illegal outcome” of the case as international law.

“We hope that Australia can set more store by international law, and not treat it as a game,” Lu added, repeating that China respected freedom of navigation and overflight in accordance with international law.

While China and Australia have close business ties, including a free trade agreement, Canberra is also a strong security ally of the United States.

Bishop told ABC radio on Wednesday that China’s reputation would suffer as a result of the court ruling, insisting relations with the international community were crucial to its rise as a superpower.

“To ignore it would be a serious international transgression,” she said.

‘WAR NOT AN OPTION’

The Philippines has been careful not to irk China and has refrained from any celebratory words. In the hours after the ruling, its normally brash and outspoken Duterte privately told his ministers to be magnanimous and not to taunt Beijing.

He broke his silence on the issue late on Thursday at a private function and said he wanted dialogue with China and to send former President Fidel Ramos to Beijing to break the ice.

“War is not an option. So, what is the other side? - Peaceful talk,” Duterte said. “I can not give you the wherewithals now. I have to consult many people.”

Duterte added it was important that any overtures towards China would also take into consideration the Philippines’ longstanding alliance with Washington.

“We do not also want to offend the United States. Why? Because we have indemnified ourselves allied with Western power,” he said.

China claims much of the South China Sea, through which more than $5 trillion of trade moves annually. Brunei, Malaysia, the Philippines, Taiwan and Vietnam have rival claims.

Meeting on the sidelines of a regional summit in the Mongolian capital, Ulaanbaatar, Chinese Premier Li Keqiang told his Vietnamese counterpart on Thursday that he hoped Vietnam would together with China jointly safeguard maritime peace and stability, state media in both countries reported.

Li repeated China’s stance that the South China Sea issue should be solved bilaterally “on the basis of historical facts and in accordance with international law”, state news agency Xinhua said.