Brig. Vijai K Nair (Retd). Dr. Nair an M Sc. in Defence Studies and a Ph. D. in Political Science. He specializes in Nuclear Strategy formulation and nuclear arms control negotiations. He has considerable experience on issues related to NPT, CTBT and FMCT. Dr. Nair is currently revising the nuclear strategy for India [in keeping with nuclear transience] suggested in his book “Nuclear India.” Besides two tenures of combat duty, in service experience includes being a Member Army Experts Committee - 1989-90; Core staff officer to the Committee on Defence Expenditure 1990.
He is the Life Trustee of the Forum for Strategic & Security Studies; and, Managing Director, Magoo Strategic Infotech Pvt Ltd. An information service providing daily news updates and analyses on “Nuclear Agenda’s”.
This analysis by Brig. Vijai K Nair originally published in "China Brief" by The Jamestown Foundation . China Brief Volume: 2 Issue: 5 [February 28, 2002].
Directly and indirectly, America's war on terrorism challenges China's strategy to gain influence in the Central and South Asian region. This strategy was born of the need to adopt a generally more assertive foreign policy following the collapse of the Soviet Union, and the fact that activism in Central Asia did not immediately confront the interests of Russia or America. But it remains to be seen which options Beijing will use to reassert its influence there.
Beijing's long-term national objective is to match and eventually surpass American global power, both politically and economically. It takes into account the asymmetry of capabilities and the need for a graduated approach in a world where American primacy is well established. As early as the mid-1980s, China recognized that the existing environment precluded extending its political influence to its east and north (areas of singular and vital interest to the United States and Russia). This limited it to its western and southwestern flanks, where the influence of the premier powers was at best tenuous.
A WESTBOUND STRATEGY
Beijing conceived a "West-bound strategy" as phase one of its efforts to incorporate states into its sphere of influence. External interference was to be kept to a minimum by focusing Washington on the East while insidiously gaining a foothold in the West.
The only serious obstacle to this strategy is the American presence and strategic interests in the Middle East, and, to a lesser extent, the geostrategic location of its perceived rival India. The main issue--that is, the United States--was tackled by diverting U.S. attention to the east (highly visible military maneuvers posited as a threat to Taiwan).
China banked heavily on the Shanghai Cooperation Organization (SCO) it formed in 1996 and 1997  as the instrument through which it would be able to project its influence and power in Central Asia. That region would, it hoped, be a source of much-needed strategic energy resources, a buffer for sensitive Xinjiang province and a launch pad for its larger strategic aspirations in West Asia. It had actively sought to build its military influence in a number of countries through questionable arms deals--the sale of missiles to Saudi Arabia, Iran, Iraq and Syria, for example, and nuclear weapons related technology, materials and equipment to Pakistan.
In strategic terms, the infusion of American presence in to Central Asia, Pakistan and Afghanistan has seriously upset China's security calculus on which its West-bound strategy is predicated. The importance of this became apparent when Beijing warned Washington that China's stakes in Pakistan were as high as America's stakes in Israel. Its political, military and economic investment in Pakistan over the last two decades has been many times the magnitude of its efforts to bring Taiwan into the fold.
Unfortunately for Beijing, Pakistan's dire economic straits made it necessary for China to take a greater stake in developing Pakistan's Indian Ocean port of Gwadar, which could provide access for China's navy in the future. China has also had to take bigger risks in facilitating Pakistan's proliferation efforts, such as continuing its assistance to the long-range Shaheen II missile program. September 11 caught China off guard. It had not yet gotten all the elements of its West-bound strategy in place. The SCO had not congealed sufficiently to provide a suitable base in the Central Asian States. Furthermore, its efforts to assist Pakistan, and thereby itself, in acquiring a meaningful economic hold over Afghanistan were at an incipient stage.
The Chinese leadership is reported to have viewed this "as the most significant shift in the global balance with dangerous implications for China's world standing and its interests in Central and Southwest Asia."
With Pakistan caving in to American demands, China's position in the region has unraveled. In September, China substantially beefed up its forces along the Afghanistan-Xinjiang border along the Wakhan Corridor. Government sources in Delhi suggest that these military assets crossed over the Khunjerab Pass and deployed in the Hunza regions of Pakistan astride the Karakoram highway. The importance of this deployment was underscored by a visit from senior leaders of the Chinese Communist Party's Central Military Commission to the China-Afghan border. 
Beijing has major stakes in the war against terrorism. It has clearly enunciated that Pakistan is as central to its national security interests as Israel is to Washington. This, with its diminished leverage in Islamabad, could very well be the driving force that induced the United States to take Pakistan on board the coalition effort against terrorism. If so, a closer look at the possible postwar scenarios--in which a firm and enduring U.S. commitment becomes a prerequisite to keep Pakistan out of the Chinese strategic ambit and its implications for India--is called for. India must carry out its own independent assessment and develop an appropriate "hedge" ... now. In such a scenario the levels of trust and confidence necessary for a cooperative relationship are likely to be the first casualties.
"Geopolitically, America's prolonged stay might add to China's concerns. Beijing would certainly not like the United States to establish bases in South or Central Asia. A U.S. base in Uzbekistan, for instance, would not be in China's strategic interests." 
Chinese leadership's skepticism of American presence in Pakistan would be increased by the possibility that Washington may gather additional evidence of Chinese collusion in Pakistan's nuclear program, and that such information may reveal new details about China's own.
With America intending to maintain a military presence at the bases provided by Musharraf at Karachi, Jacobabad, Dalbandin and Pasni in proximity of the Gwadar port project, it is clear that Washington does not intend to withdraw its forces without achieving its objectives--whatever they may be. As such, we can expect to see a conflict of interests developing within the Pakistani military establishment between the pro-China and pro-U.S. factions. China can be expected to fuel this dissension in its efforts to regain lost ground.
U.S. interests in Afghanistan are governed by many factors. These include "its mineral wealth; oil reserves of the Central Asian Republics; containing China from a hitherto open flank; keeping Russia and the Central Asian Republics under close watch and extending its political influence in the region under the guise of the war on terrorism."  Each of which is, of course, antipathetic to China's grand strategy.
Beijing is unlikely to be complacent about the denigration of its strategic interests and can be expected to employ all means at its disposal--political, economic and military--to ward of being contained from what it considered its open flank. Among its options: undermine U.S. capacities to maintain a military presence in the region by encouraging subversive activity ; confront America in Pakistan using its missile diplomacy (perfected along the Pacific Rim); undercut the tenuous linkages being established between Russia and the United States; switch the thrust of its strategy through Myanmar and the Bay of Bengal; put forward its plans to confront India by increasing its military to military cooperation with Bangladesh, Nepal and Sri Lanka while unleashing subversive elements in India; increase its influence in the Central Asian states through clever application of the SCO; and so on. We can expect to see a combination of all these options in some form or the other.
As a starter, Chinese forces released at the close of the border dispute with Russia have been moved into the region and are subordinated to the People's Armed Police and sent South to Xinjiang and Tibet.  More recently, China has started making military noises opposite Sikkim and Arunachal in North East India  where it professes territorial claims and refuses to recognize India's sovereignty over Sikkim. China's military recently sent arms shipments to Burma, highlighting efforts by the People's Liberation Army to back the ruling military junta there.  Government sources in Delhi indicate that Chinese nuclear technicians, under PLA protection, were sent to Afghanistan to remove evidence of radiological materials that could have been traced back to Beijing. This suggests a far deeper Sino-Pak collusion in the proliferation of WMDs than has been reported earlier.
The Sino-U.S. relationship is undergoing a phase of turbulence suggesting major upheavals in the Asian security environment. There are clear indications that all the States in the South Asia region are being drawn into the vortex of the whirlpool started by the U.S. war on terrorism. The short-, mid- and long-term ramifications on India's security are significant. As the predominant regional power it must plan for and contribute to stability in the region both during and after the war of terrorism. The compatibility of the larger interests of both the United States and India are of an extraordinarily high order. If exploited properly, they can be used to shape close ties between the two democracies. Are we doing enough and are we getting it right?
1 BBC World: Monitoring. "Five Countries Sign Central Asian Security Agreement" July 4, 1998.
2 "China's 'Green Corridor.'" October 12, 2001 Geostrategy Direct. Com. East West Services.
3 Ayesha Siddiqa-AghaOpinion: Presenting Pakistan In Negative Light. The DAWN Group of Newspapers, 2001.
4 Lt. Gen. [Ret.] Khalid Mahmud Arif. Opinion: Power Game In Hindukush. The DAWN Group of Newspapers, 2001.
5 Bill Gertz and Rowan Scarborough. The Washington Times, December 21, 2001. 'Inside The Ring--Notes From The Pentagon--China-Al Qaeda Nexus.'
6 Geostrategy Direct. Week of December 4, 2001.
7 Pakistan News Service [PNS]. China Moves Troops To Diffuse Indian War Threat. Lahore, December 27, 2001.
8 Geostrategy-Direct, January 1, 2002. 'China Ships Arms To Burma.'