sir,
i dont think a naval blockade would warrant a crossing of nuclear threshold..
Besides you seem to lay your country's future in the chance of chinese militarily intervening.. IMHO i dont think Chinese will interfere in a india pak war.. Firstly india, pak and china are nuclear powers.. Any war between such countries will invariably be a nuclear one. While you are only too willing to use nuclear weapons, india and China are not willing to see decades of our growth go up in smokes.. That too for a minor issue like destruction of shipping assets in a third country.
Secondly, china would be taking a big risk if it attacks india. If china wins it'd be sole super power, unchallenged authority in all of asia. But anything short of a complete win would shatter the myth of chinese military might and invincibility.. Adjacent nations like japan, phillipines, russia, vietnam, mongolia all of whom have border disputes with china will assert themselves. Then there is the internal dissension problem..
Thirdly is the America factor. We expect america to play the same role vis a vis china what russia played against america in 71. If china wins it'd directly threaten the very existence of america..