Addressing a joint seminar of the Army's Master General Ordnance and Confederation of Indian Industry, Lieutenant General Chand said: "On the North, we have China which has a large landmass, huge resources and a large standing army....despite having the Himalayas between us, China is bound to be a threat for us in the years ahead."
He also said that China was racing with the US in militarisation.
"As the second largest economy in the world, it is racing to catch up with the US," he said.
According to latest figures released by Stockholm International Peace Research Institute (SIPRI), the US remains world's largest spender on defence registering a growth of 1.7 per cent between 2015 and 2016 to $611 billion while China is second on the list spending $215 billion in 2016, an increase of 5.4 percent.
India was fifth largest military spender in the world in 2016 at $55.9 billion, with its military expenditure growing around 8.5 per cent from the previous year.
The Army Vice Chief also noted that a large amount of China's defence spending remains undeclared.
"A large portion of Chinese defence expenditure remains undeclared... On the west, Pakistan smaller economy, smaller army... thus they took route of low intensity conflict, which suits China," he said.
Lieutenant General Chand also stressed that India needs to pay more attention to security.
"We have to pay much more attention to security, that's what we are doing now. India, being at the center of the volatile region is the net security provider," he added.
A stand-off is continuing between Indian and Chinese troops along the border in the Sikkim sector, after China attempted road construction in Bhutan's territory around mid-June.
Both sides have reinforced troops and are maintaining position along the border, with no signs of a withdrawal soon.
Lieutenant General Chand also slammed Pakistan for targeting a school building in cross border firing, adding that India would never do something like that.
"Pakistan shelled schools, it is not something we would do; when we retaliate we assure Pakistani military is targeted. It is unfortunate to see that they've stooped so low and caused casualty to the children," he said.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)