I don't think the Chinese government is directly involved in Indian North East mess, otherwise people will see a sharp rise of activities and casualties.
http://indiatoday.intoday.in/story/...-spread-militancy-in-north-east/1/139538.html
May 28, 2011 | UPDATED 20:49 IST
With the arrest of three key insurgent operatives, intelligence agencies are piecing together China's subversive agenda for the North-east. A recent charge-sheet filed by the National Investigation Agency (NIA) against Anthony Shimray, chief arms procurer of the Isak-Muivah faction of Nationalist Socialist Council of Nagaland (NSCN-IM), specifically mentions Norinco, one of China's largest state-owned weapons manufacturers. Bangkok-based nscn-im rebels had allegedly paid $100,000 to Norinco to buy 10,000 assault rifles, pistols, rocket-propelled grenades and ammunition. A United National Liberation Front of Manipur (UNLF) delegation that went to Ruili in China's Yunnan province in 2009 was given rate cards for weaponry but could not afford the high prices: $1 million for a rocket-propelled grenade 'package' comprising 20 launchers and 2,000 rockets. For training, it was $512,000.
Norinco's name first surfaced during the 2004 haul at Chittagong where Bangladeshi security agencies intercepted a consignment of 4,930 firearms, including rockets, grenades and assault rifles, meant for the United Liberation Front of Asom (ULFA) and nscn-im.
The Chinese intelligence services have links with other rebel groups as well. The first indications emerged in August 2009 when Manipur police captured Ronny, a 'sergeant' in the banned insurgent group, the People's Liberation Army (PLA). He confirmed to his police interrogators that "Sixteen pla platoons (around 300 men) returned after training in China." The breakthrough, however, came in August last year with the arrest of Rajkumar Meghen, the head of the UNLF. Meghen, the charismatic scion of the Manipur royal family, was captured in a joint Indo-Bangladeshi operation in Dhaka and transported by road to Bihar where he was formally arrested by the nia. His arrest was preceded by the capture of 18 unlf operatives in Guwahati. Recovered from the militants was a laptop with detailed accounts of their operations and links with China. The establishment of an arms line from China in the 1990s meant that the north-eastern guerillas could buy their weapons instead of snatching them from security forces. "The establishment of a full-fledged arms supply line means it is only a matter of time before these arms flow into the Indian mainland," says an nia official. The unlf was in contact with Maoists operating in central India. A unlf note prepared for the Chinese says that the Maoist movement has spread to over 25 per cent of the Indian land mass. "If we have sufficient supplies of arms and ammunition, the Maoist struggle will achieve a qualitative development," it says.
Since the 1962 border war with India, China has held out twin threats to India's North-east. The first, a conventional military thrust down from Tibet into the 20-km-wide "Siliguri corridor" that could sever the entire region from India. The second, covert assistance to insurgent groups to tie down Indian troops in prolonged counter-insurgency operations. As part of the second strategy, China has provided sanctuaries, arms and training to Naga, Manipuri and Mizo insurgent groups. In the 1960s Naga leader Angami Phizo and others embarked on a "Long March" to China-a move that cemented their ties with the People's Republic. In 2009, a delegation of unlf leaders embarked on a second "Long March" to China where the agents demanded intelligence on Indian missile movements (see Long March to China).