The Indian Government is concerned about the modernization of the Chinese Navy, including a new naval base and port facility being built in Burma at the mouth of the Irrawaddy River - right across the Bay of Bengal from India. The project is being constructed with a great many Chinese workers.

In December 2001, the Indian Intelligence Agency captured a weapons shipment in Burma that was sent by China to insurgents in the northeastern states of India. The Indian Intelligence Agency believes that at least two other weapons shipments got through and were delivered to these insurgents.

"The presence of 2,500 AK-47s floating about in the northeast is reason for concern."

This what some senior Indian officials were heard to comment. They further stated that this assistance is in direct violation of a 1998 understanding between India and China that Beijing would not offer help of encouragement to the northeast militants.

Tensions are currently escalating between India and Pakistan, both nuclear nations, and China has made overtures to Islamabad and pledged to provide support "In all eventualities," according to Major General Rashid Qureshi of the Pakistani Army.

Another Pakistani Government official said that Chinese Prime Minister Zhu Ronji, during his recent visit to Pakistan, expressed his apprehension at the potentially volatile situation that has arisen due to the assembling of Indian forces close to the Pakistani border. Zhu promised to President Pervez Musharaf, of their 'principled and everlasting support for Islamabad'. Zhu also was quoted as saying that Pakistan is a very reliable and close friend and that China would always stand by Pakistan.