First of all, my suggestion was that it'd be up to them. If Ukraine and Russia are OK with PRC acting as mediator that's really all there is to it. My point was that PRC aren't necessarily neutral.

Secondly, a peace doesn't necessarily mean less people dead in the long run, Russia has shown how little regard they have for civilian lives, and their imperialistic posturing begs the question as to who would be next? Moldova perhaps?

As an allegory, consider that you have a neighbour who believes he should be entitled to taking the eldest of your three children and half of your house. Would a good mediator then suggest that your neighbour should only get 25% of your house and perhaps your youngest child? I think not, and I think that's more or less the position Ukraine has when it comes to their territorial integrity. I'm sure they're open to debate NATO membership as well as keeping Sevastopol open, but they have been rather firm that they will not discuss any option involving concession of land to Russia, and I don't think you, the PRC or anyone else are in a position to judge them for that.