Two "great games" currently roil South Asia. In the west, Afghanistan – and what Henry Kissinger calls "Islamist jihadists" – challenges the international order. In the east, a large number of Chinese troops have entered Pakistani-held territory high in the mountain fastness of the Kashmir Karakorams, in the picturesque Gilgit-Baltistan region, not far from the glacial battlefield of Siachen, where India and Pakistan confront each other.

Senge Hasan Sering, from Skardu, the director of the Gilgit-Baltistan National Congress, believes that the number of Chinese People's Liberation Army troops now present "could be over 11,000", as there are also additional "PLA construction corps personnel" deployed. It is here that China is currently investing "billions of dollars in mega projects like expressways, tunnels, and oil and gas pipelines". This, Sering says, is "surely not on account of any overflowing altruism".

The Chinese say that some of their troops are present in Pakistan because of another sort of "overflowing", of which there has been a great deal in this part of Kashmir and in the rest of Pakistan. This year's heavy monsoon rains have wrought havoc in the area, severing road connections, washing away bridges and rendering over half a million people homeless in these mountains – without "dwellings, farmlands, moveable assets" or even "graveyards". This is over and above the many thousands in the Hunza region, who in January lost everything on account of a cloudburst that wiped out several villages and created a highly unstable artificial lake.

Rudyard Kipling's old "great game" now has new contestants. Instead of an expansionist Russian empire confronting imperial Britain, it is now a China hungry for land, water and raw materials that is flexing its muscles, encroaching on Himalayan redoubts and directly challenging India.

China's incursion reaffirms the ancient strategic axiom that "geography is the real determinant of history" – and, as a result, of foreign and security policy, too. Robert Kaplan wisely observes that "Indian geography is the story of invasions from a northwesterly direction" and "India's strategic challenges still inhere in this fact" – which is why Afghanistan, to Indian eyes, is linked to the subcontinent's history, and thus our future.

It is also why there exists an "organic connection of India to Central Asia", the key to that link lying in the Himalayas, which is where the India-China rivalry is currently focused. Fortunately, at least for the present, this rivalry is far less emotional than India-Pakistan relations, having not been born of historical grievances.

The Chinese urge is to break from the confines of their country's history, and thus China's own geography. An assertive and relatively stable China, it seems, must expand, lest pent-up internal pressures tear it apart. A strong and stable India, on the other hand, will always be a status quo power.

It is against this backdrop that the latest contest between India and China must be assessed. Several thousand PLA troops are indisputably stationed in the Khunjerab Pass on the Xinjiang border to protect the Karakoram highway, which PLA soldiers are now repairing in several places. The road, after all, is a vital link in China's quest for direct access to the Arabian Sea. But this is also Indian territory, wherein lies the rub, for the region is now victim to a creeping China acquisitiveness, with Pakistan acquiescing as a willing accomplice.

Despite India's historically established territorial claims to the region, China terms the area "disputed" – a description it has now begun to extend to the whole of the Indian state of Jammu and Kashmir. This sort of verbal trickery to hide a strategic objective has been seen before. Indeed, some years back, a planned visit to Indian Ladakh by the PLA's commander of the Lanzhou Military Region was cancelled on the grounds that Pakistan had protested – implying that Pakistan had a legitimate claim to the area.

It would be a mistake to presume that the vast expansion of trade between India and China, currently worth more than $60bn (£38bn) annually (with China now India's largest trading partner), must lead to improved bilateral relations. Even while trade expands, China is attempting to confine India within greatly foreshortened land and sea borders through its so-called "string of pearls policy".

This effort to encircle India by sea with strategically positioned naval stations from Hainan in the east to Gwadar in the west, and on land by promoting bogus Pakistani claims that undermine India's territorial integrity, takes the "great game" to a new and more dangerous level. Indeed, the pincer of Afghanistan and Gilgit/Baltistan poses the gravest challenge to India's statecraft since independence.

More than that, the struggle now underway at the top of the world may well determine whether this will be an "Asian century" or a "Chinese century".

• Copyright: Project Syndicate, 2010

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