China uses its wide-spreading economic policy as a tool to maintain the balance of power in the region. In the case of Afghanistan, China wants the peaceful transition of power to the government of Afghanistan. Similarly, besides this region, China looks for economic development and bilateral trade to satisfy its energy needs. The study argues that most of the regional countries are having solid reservation over the Indian "hegemonic ambitions". This has led to persistent tension amongst the South Asian giant and its smaller neighbor states. To counter the upper handed treatment of New Delhi, the rest of the countries have intended to have friendly ties with China. China insists that problems and disputes should be handled strictly according to the Five Principles of Peaceful Coexistence without the use of force or other means. It is further argued that China is acting as a balancer in the region to counter the aggressive attitude of other regional or global powers. China, at every point, complains against the 'big brotherly' and 'hegemonic attitude' of India against its neighbors, pointing out that all the regional states must be treated equally irrespective of their size and geographical location.