Wen Jiabao's April visit to India signals an important shift in China's perceptions about India. Numerous writings in Chinese media today mention about a  rising India. China has come to recognize the prominent role of India in international affairs. A Xinhua document outlining India for the first time as a country in a major power group says, "…major power groups such as India, Russia and the European Union are also rising along side China." Also an article in Beijing Review outlines, "While the rise of the Chinese dragon propels Asia to global prominence, India's outstanding performance is not far behind in Asia's global economic emergence…With its 1.1 billion population, seventh largest land mass and strategic location on the Indian Ocean rim, India has everything necessary to become a major power." Talking about ushering in a truly Asian century, China believes that it can happen only with the development of both China and India. The development of both the countries will strengthen Asia's right to speak on the world economy and enhance Asia's status in the global economic system.

This perception about India indicates a shifting balance of power in Asia. In this matrix of shifting alliances, factors like continuing US preponderance, the rise of China, and the energy security are playing a predominant role. These are influencing many countries to shape-up their foreign policy goals.

China is demonstrating a perceptible change in its South Asia policy. This is driven by both external and internal security threats to China. It is confronted with US' unilateralism and its increasing presence in Asia-Pacific region. Many Chinese political analysts believe that US is increasingly trying to contain the rise of China. US Secretary of State, Condoleezza Rice's speech in Tokyo in March 2005 carried such assertions on China threat. Also China is faced with the resurgence of militaristic Japan. The political dynamics of Japan is fast changing owing to the emergence of a new Japanese political generation supporting a more patriotic Japan. Anti-China sentiments around issues like support for Taiwan and tribute to Yasukuni shrine have become increasingly vocal in Japan's politics. The February 2005 Japan-US joint statement identifying Taiwan as their "common concern" has caused fresh tensions in Sino-Japanese relations. Besides, China is also faced with the rise of India. Following Rice's statement that US government plans to "make India a major power in the 21st century", China's security environment has become increasingly complex.

Corollary to these external challenges, China is grappling with its own need for continued economic prosperity and domestic stability. China regards that despite its progress, there is a gap between China and the developed nations in terms of national wealth, standard of living, education, and science and technology. Also globalization has brought challenges of corruption, rural-urban divide, rural-to-urban migration, unemployment and banking crisis. To meet the development goals the year 2010 has been targeted to achieve "a well-off society of a higher standard in an all-round way". In the interim, China needs to seize the "important strategic opportunities" of the period and tread the path of peace and development. This new security situation has forced China to rethink its Asia policy and its approach towards India.

The new approach calls for a balanced stance in regional affairs, especially in the India-Pakistan equation. The Chinese Prime Minister Wen Jiabao's visit to India in April demonstrated this changed perceptions of China and opened a new chapter in the friendly relations and cooperation between the two countries. The new chapter was ushered in with both sides agreeing to solve the border issue on the basis of mutual respect and equality that benefits both countries. In fact, the meeting saw India-China relationships upgraded to global and strategic character. The new term - "strategic" - implied the relationship upgraded from merely bilateral level to a global level involving issues ranging from nuclear, to counter-terrorism, global warming to WTO. This up-gradation is commensurate with the changes in the post 9/11 world order as well as recognition of India as a rising power.

A stable South Asia would enable China to play a more stabilizing and meaningful role in solving its border disputes with India, in enhancing confidence building measures and in creating scope for multi-polar world system. As Wen Jiabao said, "we all believe that China's stability and development is in the interest of India, India's stability and development is in the interest of China. The stability, development and prosperity of South Asia are in the interest of the whole world." Indeed the changing balance of power in Asia,  China's growing threat perceptions and a rising India have cumulatively forced China to adopt a more favourable perception about India.