The end of the Cold War, the September 11 terrorists’ attacks, preponderance of US power and globalisation have shaped the present world order and posed new opportunities and challenges for China. China’s need to fulfill its grand strategy of acquiring comprehensive national power within this external environment and overcome the existing challenges has given rise to its post-Cold War foreign policy strategy. Given the challenges it faces, its primary need is to ensure continuance of a peaceful environment to sustain its reform and modernisation programme. This calls for a foreign policy, which conforms to rather than challenges the existing international order. Yet its policies to advance national interests are already leading to a series of complex responses in both Asia and the Pacific regions.