The Chinese military is on an upward path and is engaged in a modernization programme. The Chinese deny it, but if this report is true, China will have an arsenal rivalling that of any great power. The US Secretary of Defence, Donald Rumsfeld recently submitted a report to the Congress. The report lists steps taken by the Chinese to convert the People's Liberation Army (PLA) into one of the foremost armies of the world. Today, the PLA has various types of ballistic missiles and the latest fighters capable of launching precision strikes. China does not have an aircraft carrier, but its naval power is on a new growth pattern and has developed the option to attack ships and submarines. When short of domestic supplies, China has gone ahead with a shopping spree without hesitation. Money is not a problem, and the Chinese perhaps spend two to three times more than what they declare in their official defence budget. Apparently, China has a long-term view of defence modernization and feels it has to plug gaps in an age of rapid development in information technology.

China's military build up is a paradox of sorts since it does not face any direct threat. The Southeast Asian countries are interested in co-opting China into their security and community building exercises. Then, why is there a Chinese military build-up? Taiwan seems to be the short-term goal; the long-term objective could be to ensure a Chinese dominance over the Asia-Pacific region. It may not signal a return of the 'Middle Kingdom', but the Chinese would certainly desire Pax Sinica to emerge.

Herein lays the challenge to India. There may not be an all out war between the two countries given the improved relations, and a network of political and economic interactions. However, India is bound to feel the effects of Chinese military confidence. Already, the Chinese are enhancing their military capabilities near the Sino-Indian border by constructing roads and helipads. Once completed, the Qinghai-Tibet Railways will enhance China's strategic depth. In the Indian Ocean, China is fast developing the capacity to exercise strategic coercion and strategic denial. The decision to exclude India from the proposed East Asian Community (EAC) meeting in December at the alleged behest of China is testimony to this fact. In the future, increased Chinese naval confidence may bring it to the Bay of Bengal and the Arabian Sea.

Is India prepared? It can wage and win a war against Pakistan under every circumstance, but it is not sure about holding out against China. India's west-to-east communication links along the Sino-Indian border are very poor. In many areas of Northeast India, the riverine terrain and the absence of bridges create formidable difficulties for the army's movements. India's air defence against China is another bothersome factor since China has ICBMs in its armoury - with a range of 8,000 kilometres - and capable of attacking any part of India. Some ICBMs are reportedly positioned in Tibet. India still does not have a long-range delivery system capable of striking Shanghai or Beijing. While China is ready to deploy its fourth generation fighter - the F-10, there are many complications in India's indigenous fighter programme - the Light Combat Aircraft or Tejas. Similarly, our naval build-up has stagnated and the Indian Navy has a 30 per cent shortfall in number of required ships. The condition of the submarine force is woeful with only 15 operational submarines. The Chinese on the other hand, have around 60 submarines.

The Chinese PLA is at a strategic crossroad. It is capable of deterring and inflicting heavy damage on any country, should China choose to become hostile to it. This is a vital part of China's dream of 'comprehensive national power' (CNP) to emerge as a powerful country in the future. India can have good relations with China only if it is militarily confident, that will enable India to bargain from a position of strength. The Sino-Indian border talks are at a crucial stage. It is possible to handle China within the present defence budget limits. There is no need for across the broad modernization. Rather, the focus should be on selective modernization. This could be done by identifying the vulnerable areas vis-à-vis China and consolidating India's position. This is the only hope for enduring peace between the two neighbours.