There are steps the Chinese can take to ensure peace and prosperity, while simultaneously putting the rest of the world at ease.
Let Tibet go
The first thing China should do is to release the Tibetans and remove all Chinese settled on Tibetan soil. As long as China remains a conqueror and an occupier, it will be marked out as a country with a barbaric and threatening culture—just as the Russians are regarded by every country in Europe as a barbaric and threatening culture as a result of their continued occupation of Chechnya.
The international community judges a country the same way individuals judge other individuals—by deeds, not words. If someone at a social gathering commits a barbaric assault on another guest, stomps on his face, breaks his nose, and then holds him in a headlock, the other guests will shun the thug. It makes no difference that the thug tries to make polite conversation and smiles affably towards all the other guests. The other guests will know that performance is just a facade and that the thug’s true nature is as demonstrated by his behavior towards his victim. This explains why Poland, Georgia and Ukraine (which geographically and ethnically have much more in common with Russia than the West) have been so keen to enter NATO—they know the Russian mindset has not changed. Likewise the occupation, oppression, and attempted ethnic eradication of the Tibetan people are not things that can be overlooked—no matter how civil China is in its dealings with the rest of the world.
Renounce its designs on Taiwan
The next thing the Chinese should do is forswear their aggressive designs on the Taiwanese. No country should be threatened with invasion by a despotic neighbor. The threat that hangs over the Taiwanese people hangs over the whole world.
The larger the population of a country, the less feasible it is to have meaningful self-government. To address this problem, large nations should federate into separate sovereign states, which should be divided into smaller self-governing units, and those units into smaller self-governing units, and so on down to the individual. Power should be vested in the lowest unit possible with the most power vested in the individual and the least power residing with the federal government.
Democratize and liberalize
The above measures, when coupled with the introduction of democracy, freedom of speech, trial by jury, the rule of law, separation of powers, judicial review, and other institutions of freedom, would, within a few generations, convert the culture of the Chinese people from being slaves and masters into a free, independent, and civilized people.