Prior to the Democrats coming to power the Chinese Communist Party believed that the Barack Obama administration will push harder on Human Rights and other sensitive issues. The stability in relations between Washington and Beijing during the Bush era appeared to be on test given that both Barack Obama and Hillary Clinton were quite critical of China during their election campaigns.

Call it China’s new military diplomacy or emerging naval strategy. A Chinese naval fleet arrived in the Gulf of Aden off the Somalian coast on January 6, 2009 to carry out the first escort mission against pirates. On February 18, 2009, in an efficient display of its growing naval capabilities, the fleet completed its twenty first mission (the largest held so far in the series) of escorting merchant ships in this region.

The global financial crisis which had been brewing for some time began to unfold in the middle of 2008. Stock markets around the world have nosedived, large financial institutions have collapsed or been bought out, and governments of even the wealthiest nations have had to come up with rescue packages to rescue their financial systems. The crisis stemmed from the collapse of the US sub-prime mortgage market and the reversal of the housing boom in other industrialised economies.

Hydrocarbon rich Bay of Bengal seems to be emerging as another centre of oil politics. This was recently manifested by a standoff between Myanmar and Bangladesh, when Dhaka sent three naval vessels to stop Myanmar from conducting exploration activities in their disputed Exclusive Economic Zones (EEZs). The crisis has since been diffused, though it is far from over.

External Affairs Minister Pranab Mukherjee's recent outburst that China poses a security challenge indicates a dangerous ambiguity in India’s China policy. The fact that Mukherjee has aired such a view after his intense and long diplomatic rapport with the leadership of that country needs to be noted seriously. It is not that China has not been a puzzle to Indian strategic thinkers. Even former Defence Minister George Fernandes considered China as India’s number one enemy, but his views were transformed after he paid an official visit to Beijing.