Satish Nambiar

　　History suggests that the rise of new powers invariably brings change in the international system. The rise of the People's Republic of China in the post Cold War era has already introduced new dynamics in the regional and international order. Assessed against the parameters that determine global power status today as also comprehensive national strength, China measures up well. While ensuring protection of its basic security interests, sovereignty and territorial integrity the country sees for itself a significant regional and global role within the framework of its "peaceful rise" or "peaceful development". This process is perceived by others in the international community in different ways. The pre-eminent global player, namely the USA, looks at China as a "theatre peer', with which it would continue to have economic and trade links to mutual advantage, but could well have strategic differences over issues like Taiwan, the South China Sea, North Korea and Japan. The European Union also looks optimistically at improved economic and trade links but could be expected to side with the USA on strategic issues. Russia and countries from East and South-East Asia currently focus on economic and trade ties but recognise the need to develop strategic congruence with China to balance the current unipolar global regime. Similarly most other countries from the developing world including India, would like to join in moves towards addressing global issues multilaterally. China's efforts at building a more active profile in Central Asia, West Asia, Africa and South America, including securing stakes in energy resources, are being followed with interest. The Chinese economic performance is being watched with great admiration in India. Earlier fears that globalisation and easing of trade regulations would lead to the Indian market being flooded with Chinese goods have proved unfounded. India's economy is also growing significantly and in the years to come the challenge will be manage the possible rivalry between the two countries within the more than adequate space available in the world economic order. There is however a more relaxed regime of cooperation that has resulted in China emerging as India's second largest trading partner. There is also greater accommodation and understanding at the political level, and growing defence cooperation. Even so, both countries will need to address differences over issues like the boundary question, trade issues, Chinese activities in the sub-continent, particularly the military dimensions of cooperation with Myanmar, Pakistan and Bangladesh, acceptance of India's nuclear status, and a place for India in the international world order.