The China challenge: a strategic vision for US-India relations

India has also carefully cultivated ties with the countries of the Indian Ocean rim, including Mauritius, Maldives, Seychelles, and Madagascar, providing these countries with naval support, such as offshore naval patrol vessels and staff and training. In February 2008, India convened the Indian Ocean Naval Symposium, inviting participants from the littoral states to discuss maritime security. The United Arab Emirates hosted the second conference in May 2010.

India is pursuing better ties with Vietnam to try to check Chinese naval influence and access to the Indian Ocean. New Delhi initiated a new security partnership with Hanoi in 2000 that emphasized defense training, supply of advanced weaponry, and the potential for India to gain access to the South China Sea through the Cam Ranh Bay naval and air base. Indian officials have long understood the importance of Vietnam in the South China Sea and its potential to balance the Chinese naval presence in the Indian Ocean. The Vietnamese have demurred on granting India access to Cam Ranh Bay, and the Vietnamese–Indian security partnership remains limited. Vietnam has supported India in its quest for a permanent seat on the United Nations Security Council and has helped to block Pakistan's bid for membership in the ASEAN Regional Forum.

China, meanwhile, increasingly sees India as a maritime as well as a land threat. An assessment of the Indian military published by the PLA's National Defense University Press observes that, since the 1970s, India has increasingly shifted its strategic attention toward the Indian Ocean. In the Chinese view, this shift began in the wake of the 1971 Indo–Pakistani War, with increased construction of naval bases and forces and a concomitant expansion of Indian strategic guiding thoughts (zhanlue zhidao sixiang) to the Indian Ocean, and accelerated in the 1980s with the dispatch of Indian troops to Sri Lanka and the Maldives. While some of this naval effort is seen as being aimed at other states in the Indian Ocean region, especially Pakistan, the Chinese assessment also sees the Indian naval buildup as aimed at extra-regional military powers.

China's growing dependence on maritime commerce to sustain its economy inevitably heightens its concern over Indian naval capabilities. The Chinese assessment is that the Indian military has expanded its area of operations westward to the Persian Gulf and eastward to the Straits of Malacca, encompassing the key sea lanes of communications (SLOCs) that Chinese oil imports must transit.

As China modernizes its navy, there is some potential for the PLA to establish a greater presence in the Indian Ocean. India fears-a fear associated with China's port construction activities in Burma, Sri Lanka, Pakistan, and potentially Bangladesh-that these commercial ports might become naval ports of call. With China's acquisition of several new nuclear-powered attack submarines and additional diesel-electric submarines, and also the introduction of an aircraft carrier (the Shi Lang), the PLA navy may choose to establish a longer-term, sustained presence in the Indian Ocean, in part to help safeguard its SLOCs.

…and Space.India has given indications that it is developing a military space program to match China's expanding space capabilities. New Delhi has an advanced civilian space program and launches satellites for other countries, including Israel. Officials from the Indian Space Research Organization (ISRO) have announced their aim to use satellite-based communication and navigation systems for "security needs." In 2010, the Indian Ministry of Defense unveiled plans for dedicated military satellites for all three of its defense services. Still, India's space budget is one-third of China's, which is publicly stated as about $2.2 billion.

There are also reports that India has shown growing interest in an anti-satellite (ASAT) capability. Media reports from March 2011 about India's ballistic missile defense (BMD) program provide indications that such a system might also have ASAT missions.

At this point, China's ability to exploit space significantly outpaces India's. China fields an array of satellite systems, including an indigenous satellite navigation system (the Beidou/Compass array); a variety of Earth-imaging satellites (e.g., the Ziyuan electro-optical system and the Yaogan system, which includes both electro-optical and synthetic aperture radar satellites); and a tested anti-satellite system. Not only do Chinese satellites provide a surveillance and reconnaissance capability against India, but they could also help target China's anti-ship ballistic missile system against Indian and American aircraft carriers.

Demographic Trends Feed Strategic Rivalry

India's population will surpass China's in about 15 years. While not a decisive factor in determining the overall power balance between the two Asian giants, this demographic trend will play a role in regional security dynamics.

The most striking difference in the Indian and Chinese demographic pictures over the coming decades is the onset of India's youth bulge at the same time that China finds its population graying. U.S. Census Bureau analysts estimate that new entrants into China's labor force may be near its upper limits of 124 million as the population of Chinese aged 20 to 24 peaks this year. India's population of 20- to 24-year-olds, on the other hand, is not expected to peak until 2024 when it hits 116 million. While India's workforce will increase by 110 million over the next decade, China's will increase by less than 20 million, according to a Goldman Sachs study.

This demographic dividend could fuel India's economy in ways that make it a peer competitor to China-in particular, pushing Indian growth rates ahead of China's. At present, the Chinese economy is vastly larger than India's. At more than $4.7 trillion, China's GDP is four times India's; its GDPper capita, at about $3,565, is three times India's; and China produces about 12 percent of the world's GDP while India produces about 5 percent. The Chinese also hold socioeconomic advantages over India that could play in Beijing's favor: Adult literacy in China stands at about 91 percent, compared to roughly 61 percent in India.