The end of the Cold War, the September 11 terrorists’ attacks, preponderance of US power and globalisation have shaped the present world order and posed new opportunities and challenges for China. China’s need to fulfill its grand strategy of acquiring comprehensive national power within this external environment and overcome the existing challenges has given rise to its post-Cold War foreign policy strategy. Given the challenges it faces, its primary need is to ensure continuance of a peaceful environment to sustain its reform and modernisation programme.

On October 12, 2005, China announced the completion of a railway line to Tibet—one of the world’s highest train routes. This railway line climbs 5,072m (16,640ft) above sea level and runs across Tibet’s snowcovered plateau—dubbed the roof of the world. China’s official Xinhua news agency while celebrating the achievement said that the equivalent of USD 3 billion had been spent on the challenging 1,118km (710-mile) section, after four years of construction.

The inaugural East Asian Summit (EAS), touted as groundbreaking, commenced on December 14 in Kuala Lumpur comprising 16 nations— the 10 ASEAN countries, China, Japan, India, Australia and New Zealand with Russian President Vladimir Putin making a special appearance. The EAS Declaration, like many issued before in the region, is wide-ranging: from political and security cooperation, infrastructure development, financial issues, further liberalisation of regional trade and investment, poverty eradication to fighting epidemics. Nonetheless, inter alia, three points need underscoring.

World over, differences exist about the impact of military expenditure. While development economists consider excessive military expenditure as wastage, many defence economists have a different view. With the defence versus1 development debate unending, China makes a unique contribution. While China’s defence expenditure is not well known, the hinese experience shows that investments in development do provide an expanded economic base subsequently, which will take care of defence needs.

Japan’s ruling Liberal Democratic Party (LDP) – which has dominated Japanese politics for the past fifty years, swept the recent snap polls called by Prime Minister Junichiro Koizumi in August this year. The outcome of the elections has significant implications for Japan’s domestic as well as foreign policy. The extraordinary mandate that Koizumi received established him as the undisputed leader, giving him the green signal to move ahead with his proposed reforms. The LDP garnered as many as 296 out of the 480 seats in the Japanese Diet’s Lower House.

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.