"We don't have such an intention to establish a chain to encircle India," said ambassador Zhang Yan at a lunch held by the Asia Society in Hong Kong.
"It's not in China's interest to undertake this kind of strategic move.
We see India as our partner," he said, adding the speculation on a China policy of encirclement was "unfounded."
China's recent decision to build ports in Myanmar, Pakistan and Sri Lanka has raised suspicion among Indian authorities that it is trying to assert greater control over the important shipping lanes around Asia.
Thousands of Chinese-flagged ships pass through the waters around India every year, laden with goods destined for the lucrative European market.
Zhang added that China does not protect the commercial trips with a military presence and there are no plans to do so.
"We at this stage don't feel there is a need to send a navy ship to accompany our commercial ships in the area," he said.
India's distrust of China has increased in recent y