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International law, by its very nature, is dichotomous – at once anchored in tradition, and yet infused with future potential, inherently capable of transforming to address evolving contemporary challenges. This article explores the dynamic nature of international law in the context of transboundary freshwaters shared across Asia, with a focus on China. Soon to be the world's leading economy, China forges ahead with development on all fronts, placing increased pressures on its already diminishing qualities and quantities of freshwater. As an upper riparian State on close to 40 major transboundary watercourses shared with 14 neighbouring countries, China faces the ‘upstream dilemma’: how to meet domestic water-related needs, while at the same time taking into account other nations' requirements. In short, how can China be the ‘good neighbour’ that it emphasizes is an integral part of its foreign policy strategy? A concise review of China's treaty and State practice related to its transboundary water resources reveals incremental but significant changes in that arena, which reflect new approaches to national sovereignty. The article suggests that the ancient Chinese concept of ‘yin and yang’ provides an apt metaphor for considering China's evolving transboundary water practice – an emerging ‘Chinese way’.