On 29 December 2006, China released its latest white paper on national defence. Though this document is widely perceived as opaque in budgetary facts and figures, it gives policy makers and analysts enough information to analyse China's regional and global security and political roles. Two crucial aspects of the paper -- defence modernisation plan and defence budget -- have significant bearing on India, considering the political and economic rivalry between the two neighbours.

The Information Office of the State Council of the People's Republic of China released a White Paper titled "China's National Defence 2006" on December 29, 2006.

The Chinese President Hu Jintao's visit to India signifies an important milestone in bilateral relations. The visit showed that there is a mutual willingness to keep the irritants aside and move forward. Both the powers of Asia have indeed placed greater importance on "stable relations" with each other in the coming days. This was clearly visible in Hu Jintao's "five-point proposals" for developing Sino-Indian relations. The rumours of India-China relations being affected by growing strategic relationship between India and US have been laid to rest for the moment.

Despite the categorical denial by the Pakistan Foreign Office spokesperson about a report published by a British newspaper in January 2006, that Islamabad was engaged in talks with China to purchase eight nuclear reactors worth US $7 billion, the Chinese media later disclosed Beijing's plan of signing an agreement to supply six reactors. Speculation in this regard has gained currency now that the two countries are to enter into a nuclear deal during the ongoing visit of Chinese President Hu Jintao to Pakistan.

As the India-China relationship continues to grow in the new Asian dynamics, Mr. Hu Jintao's maiden visit will indeed help to keep the momentum of improving ties going. The main thrust of both governments will be to establish greater political trust for future co-operation. Two-way trade between India and China is likely to touch US $24 billion this year. There are high expectations on both sides. Manmohan Singh and Hu know each other well. They have met and held talks five times during the last two years.

Refuting China's claim over Arunachal Pradesh, India's External Affairs Minister Pranab Mukherjee firmly reiterated that "The whole of Arunachal Pradesh is an integral part of India." Coming as it did days before the Chinese President's four-day visit to India from November 20, 2006, the statement made by China's Ambassador to India, Sun Yuxi, that "In our position, the whole of the state of Arunachal Pradesh is Chinese territory. And Tawang is only one of the places in it. We are claiming all of that. That is our position," is unfortunate.

While commemorating 50 years of China's diplomatic ties with Africa, the China-Africa Summit, held on November 4-5, 2006 adopted a three-year action plan to deepen the existing political and economic links. This Summit, being one of the largest summits ever hosted in China's modern history, not only reflects the importance China places on its relations with Africa, but also clearly illustrates the value that the continent now attaches to this emerging Asian power vis-a-vis the West.

The two-day China-Africa Summit on November 4 and 5, 2006 in Beijing, coinciding with the 50th anniversary of the establishment of China-Africa diplomatic ties, created a new milestone in China's relationship with the African continent. Hailed as a new type of strategic partnership, this gathering of forty-eight African countries - the biggest ever since the founding of the People's Republic of China - was concluded by a declaration and an action plan for 2007-2009.