The two Asian giants are gearing up for a showdown almost similar to that of the Cold War. China and India are growing at an incredible pace and with Western influence fading, both are increasingly gaining footholds in distant corners of the world through bilateral trade, investment and security relations.

In this classic great power rivalry, China intends to keep India’s ambitions at bay by denying permission, for instance, to a lieutenant general posted in Jammu and Kashmir to visit China. The officer was planning to travel abroad in August of this year to attend a high level defense exchange between the countries.

Policymakers in New Delhi meanwhile are fretting about reports that 7,000 to 11,000 Chinese troops may be present in or near the city of Gilgit in Pakistani occupied Kashmir. The government of India is attempting to verify these rumors which Pakistan’s envoy to Beijing has persistently denied.

Supposedly, the Chinese soldiers in Gilgit-Baltistan are to work on the construction of railroads as well as the extension of the Karakoram Highway. Such infrastructure projects could connect China more directly with Afghanistan and beyond; parts of the world which the resource hungry Chinese economy is anxious to reach.

Other reports indicate that the commander of the militant United Liberation Front of Assam in northeast India, Paresh Baruah, has received a six month visa to visit China. In response to what appears to a posturing more aggressive than usual, Indian prime minister Manmohan Singh summoned a meeting of the Cabinet Committee of Security in Delhi. India’s ambassador to Beijing, S. Jaishankar briefed the committee on the current state of India-China relations during which the prime minister is supposed to have bursted that China intends to keep India at a “low level equilibrium.”

With the United States’ newfound policy of strategic reassurance evidently failing and the current administration unwilling to contain China, Beijing appears to have decided that it can have a free go throughout the world. To make that happen, it first has to establish a firm foothold in its own region from where to spread its “sphere of interest” to Africa and Latin America.

India challenges China’s predominance in South and East Asia. With a population of more than one billion, an economy that is rapidly expanding, a workforce that is likely to remain vast for generations to come and a subtle latent power, India is as much as Asian superpower as China is. What’s more, India is a natural leader in the geopolitics of South Asia and it has amplified its influence in the east in recent years. Countries as Japan and South Korea, searching for active strategic partnerships, are ready to cooperate with India.

Beyond the region, India has promoted diplomatic and economic ties within both the Indo-African Business Forum and the Pacific Islands Forum. It is engaging expatriates in service of India’s interests; the Indo-American civilian nuclear agreement of 2005 probably wouldn’t have happened without the active lobbying of Indian Americans. This has pushed India to initiate a “forward policy” in its foreign relations.

Beijing has been irritated with this relatively new activity from India’s side. It understands that in order to clip the wings of spreading India, it has to box it in in South Asia first. That is why China continues to support Pakistan. With India distracted in the west, China can quickly gain influence in the east.

On the whole, India hasn’t been similarly proactive in attempting to counterbalance China’s rise. Part of the reason is that the political class in India is not too concerned with international relations. Foreign policy finds very little emphasis in the contours of day to day politics in New Delhi. Manmohan Singh has been something of an exception but even his statesmanship cannot prevent the system from largely looking inward.

Iran is a case in point. While the United States were trying to engage with Iran, in part through China, India, a traditional Iranian ally, was left in the dark.

With India’s politicos largely indifferent or incompetent in the realm of foreign relations, the military has assumed responsibility for a significant chunk of the country’s external policy. It is understood that China and India are both continental as well as naval powers. In order to challenge China’s “string of pearls” strategy, India is developing a naval diplomacy of its own.

Evidence of China’s intentions can be seen in Sri Lanka where it is constructing a deepwater port in the once sleepy fishing town of Hambantota, as well as in Pakistan, where it developed the Gwadar harbor. China is also courting the littoral states in the Indian Ocean including the Maldives, Mauritius and the Seychelles and has helped them with funds to boost their economy. In return, China expect to build more bases.

India, on the other hand, is regularly dispatching naval officers to these countries to participate in exchanges. It is also helping the Maldives in establishing a network of radars that will benefit the island nation which does not have a navy of its own.

The Sino-Indian rivalry is the story of the first part of the twenty-first century much like the rivalry between Germany and the United Kingdom defined the first half of the twentieth. As John Mearsheimer explained in The Tragedy of Great Power Politics (2001), “Great powers behave aggressively not because they want to or because they possess some inner drive to dominate, but because they have to seek more power if they want to maximize their odds of survival.” Such realism has dictated China’s conduct on the world stage for decades.

India’s foreign policy by contrast has always flirted with moralistic notions. Only with the start of this century did it appreciate the importance of realpolitik. India’s politicians are well trained in this regard when it comes to domestic affairs. Now they need to show similar genius in the field of international relations. If they can, India may stand up to China’s rapid ascend.

As the world prepares for the second decade of the twenty-first century it is increasingly clear that the now subtle rivalry between China and India is only likely to exasperate.

China, though formally a Communist nation with a mixed market economy, has been able to achieve economic superiority compared with India which is trying to catch up by stressing its democratic politics, civil society and peaceful intentions.

The approach most suitable to India’s character and ambitions is one of “soft power,” a term coined by Harvard international relations scholar Professor Joseph Nye. Nye argued that “power is the ability to alter the behavior of others to get what you want, and there are three ways to do that: coercion (sticks), payments (carrots) and attraction (soft power). If you are able to attract others,” he explained, “you can economize on the sticks and carrots.”

In his book, The Paradox of American Power (2002), Nye took the analysis of soft power beyond the United States. Other nations too, he suggested, could acquire it. In today’s information era there are three types of countries likely to gain soft power and so succeed:

Those whose dominant cultures and ideals are closer to prevailing global norms (which now emphasize liberalism, pluralism, autonomy); those with the most access to multiple channels of communication and thus more influence over how issues are framed; and those whose credibility is enhanced by their domestic and international performance.

Though a country’s respect and prestige on the world stage is very much determined by its latent military power, it must also be supplemented with soft power. Otherwise in plain terms the former could be understood as arrogance.

Nye had a point in explaining the need of soft power in any nation’s overall impact on the world. With the United States struggling with two wars in Afghanistan and Iraq, the world views the superpower in negative terms. To improve that image abroad, Joseph Nye advocated the projection of soft power.

In India’s case, a soft power approach could be the trump card. To start, apart from democracy, India has the ability to be an information power. Many students from Africa, Latin America and Southeast Asia are interested in studying in India at much cheaper rates. India should implement a better infrastructure of absolving them. In that regard, the passage of the Nalanda University Bill by parliament may indicate that India is preparing to unleash its soft power onto Asia and the world. This perception is reinforced by the efficient completion of the South Asian University project under the South Asian Association for Regional Cooperation’s header and India’s decision to open up its higher education sector to global inputs and competition.

Moreover, there aren’t many countries in the world which resent India’s growing power. This is another main factor. From Singapore to the Sudan, from Angola to Afghanistan, from Australia to Argentina countries regard India with respect, not fear. What this means is that there is no need for a any power outside Eurasia to initiate a classic balance of power with or against India. This is certainly not the case with China.

China has actually a very limited ability to boost its soft power credentials. Its foreign policy has little regard for human rights and democracy while supportive of regimes that China does business with. The islands of Fiji are a case in point. It is very much because of the security umbrella provided by China that Fiji’s military dictator is able to withhold democratic elections. India doesn’t have any such constrains.

In the short run, India may not be able to match China’s three trillion dollar currency reserve nor, indeed, its robust industrial growth, but it can project a more favorable image of itself to the world through a policy of soft power. That may well, in the long run, turn out to be much more beneficial to its economy as well as its people.