Former U.S. President Bill Clinton said he’s impressed by China President Xi Jinping’s corruption crackdown and reforms to the one-child policy, but he also cautioned China’s new leadership not to intimidate smaller countries in disputes in the South China Sea.

Clinton spoke Friday in the southern Chinese city of Guangzhou at a conference hosted by Pacific Construction Group, a private Chinese infrastructure builder that ranked this year as No. 166 on Fortune’s Global 500 list. (Fortune wrote about Pacific in its last issue.)

“If China and Japan are arguing over a couple of islands, the rest of the world can watch because we feel you’re arguing on more or less even terms,” Clinton said as a part of a Q&A with Pacific’s founder Yan Jiehe, after a question about the disputed Diaoyu/Senkaku Islands in the South China Sea.

“But it’s not necessarily the same for who has access to resources in the south and east China sea and where territorial boundaries should be marked.”

In response to a question about China’s rising world influence, Clinton focused on the South China Sea, where the country recently removed an oil rig from waters claimed by Vietnam only after anti-China riots in Ho Chi Minh city killed 2 Chinese nationals.

The problem, Clinton said, is China’s insistence on negotiating alone with smaller countries because it can use its size to intimidate smaller countries like Vietnam and the Philippines if other international voices aren’t at the table.

“The Chinese position is that it should resolve this bilaterally with other countries it disagrees with—and every one of them is much smaller,” he said. “Our position in the U.S. has been, `We don’t care what resolution is, but there should be a resolution … so that Vietnam, the Philippines, and other smaller countries aren’t overwhelmed by the size differential between themselves and China.’”

Clinton had a positive take on China’s President Xi Jinping. “I think the determination being shown to reduce corruption —he deserves a lot of credit for that,” Clinton said.

A few seconds after his answer, the conference crowd of 1,000 people erupted in the biggest applause of the afternoon. Clinton went on, “I think he was quite wise in the way he proposed to change the one-child policy.”

And on pollution: “I think the willingness he’s shown to try to do something serious about climate change…it’s great that he and Obama had an agreement about fluorocarbons.”

Last year the U.S. and China agreed to work to phase out hydrofluorocarbons to limit growing carbon output and global warming.

On the issue of pollution in China, Clinton said it’s one of the country’s biggest challenges.

“One of the biggest engines of growth in the U.S., starting in 1970 going through time I was president, was the effort we made to improve the environment. New technologies, new goods.”

He said the Chinese business people in the room could capitalize on green opportunities in China. When Pacific’s Yan asked Clinton about attending another conference in 2017 to build China-U.S. relations, one to which Yan also plans to invite President Obama and former president George W. Bush, Clinton said of course he’d attend.

He wants to do all he can to help build relations between the world’s largest economy and one that will soon to displace it.