The Chinese naval has indicated willingness to build a naval base in Seychelles; a 115-island country strategically located 930 miles off the east coast of Africa.
According to the Washington Times, it is believed that if China's navy sought to establish overseas stations, the first choice would that be of Seychelles.
Strengthening the speculations further, a Chinese naval vesselthe Harbin, a Type 052 heavy destroyer, reportedly took part in the Seychelles National Day Parade to display friendliness.
Chinese defense minister, Gen. Liang Guanglie, led a large delegation to visit the Seychelles last year and called for deeper military cooperation, intensifying speculation that China wants to build a naval base there.
China has made major moves in the Indian Ocean since 2008, dispatching 14 flotillas to the Gulf of Aden and the western Indian Ocean as part of international anti-piracy operations.
However, such facilities are believed to exacerbate tensions in the Indian Ocean between China and other naval powers in the region, including India, the U.S., Britain and France.
The US currently operates a leased base in the Seychelles to fly surveillance drones that monitor pirate activities, the report added.