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. The Permanent Court of Arbitration in The Hague concluded this week 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. Australian Foreign Minister Julie Bishop urged all South China Sea claimants to resolve their disputes peaceful, saying Australia 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. Asked on Thursday by reporters what Philippine President Rodrigo Duterte's message to his ministers was in a cabinet meeting immediately after Tuesday's ruling was delivered, Budget Secretary Benjamin Dioko answered, quoting Duterte. "Let's be magnanimous in victory. Let us not do anything. They are already piqued and you taunt them more. It is really hard to enforce that decision. How do you enforce it? But he said we will start the bilateral talks and now we're starting from a better position. Because of that decision we are on a better place." 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.