IMO if we look at the Asian navies from different types of operation point of view, they're stronger/weaker depending on the type of mission. For power projection with carrier fleet, India is well ahead. For home/territorial water defense and ASW, Japan is better.
One problem that the PLAN faces is the PRC has multiple areas with security concerns at sea. i.e. Korea, Japan, Taiwan, South China sea, where the potential adversary has fairly decent ships. The cost of maintaining and upgrading fleets to patrol these areas is high. In comparison, India is a better position vs. inferior Pakistani navy.
If we look at projected upcoming navy purchases from 2005-2012, PLAN is buying/building more ships than everyone else, but the ships have to be spread over a wide area:
China
The projected PLAN acquisition is approx. 1 destroyer, 2 subs, and 2 frigates per year. These numbers are based on recent acquisitions, but will not necessarily reflect the future:
~12 submarines, including a SSBN and assorted SSN & SSK's
~6 destroyers (mix Soveremenny purchase & domestic Air-Defense Ship)
~10 frigates
~20 LST's
+Aircraft carrier?
India
(Jatt can prolly verify these projections better than me)
~6 submarines
~2 aircraft carriers
~2-3 Destroyers
~3-4 Frigates
South Korea
~3 KSS-II submarines
~1 KDX-III Destroyer
~4 KDX-II Destroyer
~4 LPH
Taiwan
As most of you are aware, Taiwan's military purchases tend to stir a lot of controversy. The following are "best case" scenario for the ROCN, but realistically they'd prolly get less:
~8 SSK's
~4 Kidd Destroyers
~4 Arleign Burke Destroyers
~4 Spruance Class DDG's (to replace 8x Knox ASW Frigates)
~10-14 Kuang Hua V Corvettes/Light Frigates
+1 Cheng Kung (OH Perry) Class Frigate (currently building)