India watchful of China's military profile: Annual Defence Report

This is what Indian Annual Defence Report 2011-12 has to say about China -

"Although the unresolved boundary dispute between India and China has been a factor in India's security calculus, India has a strategic and cooperative partnership with China, in which the effort has been to work on areas of mutual interest which would enable both countries to pursue common goals of growth and development. India's policy has been to engage with China on the principles of mutual trust and respect for each other's interests and concerns. India remains conscious and watchful of the implications of China's military profile in the immediate and extended neighbourhood."

"China has focused itself towards building its Comprehensive National Power (CNP) by economic development and technical up-gradation, which in turn has provided requisite impetus to modernisation of her armed forces and force projection capability. Chinese footprints in India's immediate neighbourhood are increasing progressively due to its proactive diplomacy through political, military and economic cooperations and engagements." 

"China’s rising power supported  by burgeoning economy is reflected in its increased confidence which will have an impact on regional and international security contours and power equations. Rapid infrastructure development in Tibet Autonomous Region (TAR) and Xinjiang Province has considerably upgraded China’s military force projection and application capability against India and improved their overall strategic and operational flexibility."