Surging tensions in the South China Sea dominated a meeting of Southeast Asia's regional bloc Saturday, presenting a challenging diplomatic debut for Myanmar as it hosts the talks for the first time.

Association of Southeast Asian Nations (ASEAN) foreign ministers, gathering ahead of a leaders' summit on Sunday, "expressed serious concerns over the on-going developments" in the disputed waters, after recent confrontations pitting Vietnam and the Philippines against China.

The escalating row will be a delicate test for Myanmar, a longtime China ally that relied on its larger neighbour's political support and investment during long years in the diplomatic wilderness under junta rule.

Observers said Myanmar -- at the helm of ASEAN for the first time in its 17-year membership -- was steering a moderate course among member states, some of whom have loyalties torn by their closeness to Beijing.

"There are some disagreements but I think Myanmar is handling it very well as a neutral chair," one diplomat said.

A new quasi-civilian regime that took power in 2011 has thrust the country into the international limelight, with reforms including freeing political prisoners and welcoming opposition leader Aung San Suu Kyi into parliament.

The country should strive not to let its close relationship with China "mar its neutral and even-handed leadership", said Simon Tay, chairman of the Singapore Institute of International Affairs, adding that this would "not be easy".

The ASEAN foreign ministers called on claimants to "resolve disputes by peaceful means without resorting to threat or use of force".

Hanoi on Wednesday accused Chinese ships of attacking Vietnamese patrol vessels near a controversial oil rig that Beijing has moved into waters claimed by both countries.

On the same day, Philippine police said they had seized a Chinese fishing boat elsewhere in the sea, which is crisscrossed by strategically important shipping lanes and vast potential energy reserves.

China claims sovereign rights to almost all of the disputed waters.

Singapore Foreign Minister K. Shanmugam said Saturday that it was imperative that ASEAN present a unified front, even if it did not take sides in the rows.

"Neutrality doesn't mean staying silent. We can't stay silent," he told reporters, adding that the bloc's "credibility" had suffered in recent years over the issue.

In 2012, China's ally Cambodia caused consternation when it was ASEAN head by refusing to take Beijing to task over its assertive maritime stance.

- 'Political dignity' -

Myanmar was forced to renounce the rotating ASEAN presidency in 2006 because of the military regime's failure to shift to democracy.

But it has skipped ahead of Laos to take the rudder this year, indicating an enthusiasm to showcase its revamped international image in the run-up to crucial 2015 elections that are seen as a crucial litmus test of reforms.

Myanmar has won praise for its democratising efforts from the international community and has welcomed a series of global leaders, including US President Barack Obama.

"Both the country and the people are now enjoying a high level of political dignity," government spokesman Ye Htut told AFP.

The removal of international embargoes has also raised hopes of an economic boom in the country, left impoverished after decades of mismanagement by the junta.

Foreign firms, drawn by huge natural resources and an estimated 60 million potential consumers, are already dipping their toes into the market.

According to state newspaper New Light of Myanmar this week, foreign investment created 90,000 jobs in the 2013/14 financial year.

Rajiv Biswas, an economist at IHS Global Insight, said the country was "one of the last great frontier market opportunities for many Western firms", but problems including weak governance and poor infrastructure meant it was still a "challenging" business environment.

Naypyidaw bears the signs of the country's evolving aspirations.

The "Abode of Kings" rose out of remote scrubland after a sudden, costly, decision by the military to shift the capital from Yangon to Myanmar's parched central region in 2005.

Unconstrained by conventional notions of scale or design, the city sprawled across the tropical hinterland in an architectural smorgasbord of vast government buildings and hotels, linked by lonely multi-lane highways.

Tending flower beds near the ASEAN conference centre, local labourer Aye Aye Aung said the changes in the capital had brought electricity to her village on the fringes of the city -- but little else.

"Naypyidaw has improved. I hope our lives will also improve as the city develops," the 29-year-old said.