China is the nation with the longest continuity in the practice of international relations and is therefore for more sophisticated in its international diplomacy than India is. This was evident in the reaction of Premier Wen Jiabao during his visit to India last year. He reacted promptly to the US announcement of its intention to help India in its moves to build itself as a world class power. He started talking of India’s global role. Till then China used to refer to India’s regional role. Since that visit and the US announcement China-India relationship has improved dramatically culminating in the recent Defence Cooperation agreement signed during the visit of Indian Defence Minister, Pranab Mukherji to Beijing. India-China trade is growing fast with the likelihood of China becoming India’s first trade partner. India and China are together in Asean Regional Forum. East Asia summit, clean energy initiative and International Thermonuclear Energy Research project (ITER). Both countries are invitees to G-8 summit and India is an observer in the Shanghai Cooperation organization.

China recognizes that today’s international system is a balance of power with six major powers – US, China, European Union, Japan, Russia and India. In such a balance of power the possibility of a war among major powers is becoming less and less likely. But peaceful competition among them is the basic feature of the system. China has an export trade of nearly 250 billion dollars with US and an equal volume of trade with Japan – the two countries with which it has some political tension. The Chinese have invested nearly 250 billion dollars of their foreign exchange surplus in US bonds and banks. China has concluded a major deal with Australia, a close ally of US for purchase of uranium for its peaceful reactors. All these developments are not indications of China being afraid of being contained by US and its allies.

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