May 5, 2012: Over the last four years India and Japan have been forming stronger defense and economic ties. What is driving this effort is mutual fear of China. India has disputes with China openly claiming large amounts of Indian territory and Japan has similar disputes with China over ownership of islands. China also continues to harbor an anti-Japanese grudge because of military defeats and atrocities inflicted from the 1880s thru World War II. The current negotiations involve Japan helping India to build high tech weapons. Japan has the technology and India the freedom to build and export armaments (which Japan is forbidden to do by its post-World War II constitution). India also has nuclear weapons, which Japan lacks (but could acquire in a hurry if there were sufficient public support).
Together, Japan and India spend about as much on defense as China. Closer security ties between Japan and India is seen as a threat by China, especially because both nations are allies of the United States. China, like Russia during the Cold War, sees itself surrounded by enemies who are concocting secret plots to keep China weak. Yet most of this anti-Chinese diplomatic activity has been generated by Chinese aggression. The Chinese attitude is that China is simply defending what is theirs. And so it goes. It's not just India and Japan that are uniting to oppose China but most of China's neighbors.
Russia is an ally (for the moment China has claims, which is has been quiet about for a while, on most of the Russian Far East) and North Korea is a dependent. The Central Asian neighbors are nervous about Chinese expansion and everyone is uncomfortable about China's reemerging (and quite ancient) attitude that China is the center of the universe (the "Middle Kingdom") and that everyone should show more respect and pay tribute. The Chinese government encourages these nationalistic attitudes, and many Chinese are eager to see China become more powerful and "get more respectful." This is dangerous stuff and a common precursor for war. But China is run by a communist police state that sees nationalism as a useful tool to keep the communists in power.
An actual war would likely destroy the communists, who are unpopular already because of corruption and abuse of power. A major component of any future war would be economic, as China is now dependent on imports of raw materials. That is something new in Chinese history, as the Chinese have, for thousands of years, prided themselves on self-sufficiency. That is gone and can't be regained without some drastic economic and cultural changes. Thus the Chinese communists are playing a game of bluster and bluff. This is especially true when you consider that the Chinese armed forces are also crippled by massive corruption and mismanagement. For that reason alone the Chinese government would avoid actual war. But short of large scale fighting, there's a lot the Chinese can do to push their neighbors around.