Understanding the inner dynamics influencing the ongoing process of economic reform in China, especially the flexibility achieved by government bureaux is important for strategic policy makers in India. The brief study seeks to determine the relationships of dominance, correspondence, and contradictions as well as the direction of influence, the sequencing between government bureaux, and the end results of their joint operations by applying the micro-macro linkage approach.

The centre of gravity of global economic growth is rapidly shifting to the Asian continent. The transition is led by China and India which have propelled themselves onto a robust growth trajectory to be fuelled by affordable energy supplies. These developments have been accompanied by a fortuitous but significant growth in the sources of global energy supply, thanks to the re-emergence of Russia as the new petrostate and the discovery of substantial energy deposits in the Caspian and Central Asian Republics.

Military diplomacy has long been one of the essential constituents of international diplomacy and an effective method to foster bilateral and regional relationships. Arms transfers serve as an important foreign policy tool and have become, a crucial dimension of world politics. Conventional arms transfers entail not only the provision of weapons/ equipment but carry with them a number of military commitments that have long‐term implications. The PLA has always had a significant role in shaping and implementing China's foreign policy.

Much has been said about the India-China-Russia strategic triangle, a post- Cold War idea mooted by former Russian Premier Yevgeny Primakov.

The origins of Chinese nationalism are traceable to the post-Cold War era which saw the gradual erosion of Communist ideology and the Chinese government’s use of nationalism to shore up party legitimacy. Yet, the Chinese nationalism which has emerged is representative of Han nationalism and ignores ethnic minority nationalism in the larger cause of China’s unity and integrity. Therefore, the strains in Chinese nationalism are visible today, in the separatist movements in Tibet and Xinjiang.

China’s Defense Paper 2002 was released in December 2002. It is the fourth such Paper since 1995. It clearly affirms that the top priority for China is to continue its modernisation. In particular, economic security is given more attention. The report also echoes the guidelines set at the 16th National Congress of the Communist Party for the future development of China. As stated in the White Paper, “The 16th National Congress of the Communist Party of China… has drawn up a grand blueprint for China’s development in the new century.