IndiaDivine.org: 
The cultural relations between India and China can be traced back to very early times. There are numerous references to China in Sanskrit texts, but their chronology is sketchy. The Mahabharata refers to China several times, including a reference to presents brought by the Chinese at the Rajasuya Yajna of the Pandavas; also, the Arthasastra and the Manusmriti mention China. According to French art historian Rene Grousset, the name China comes from "an ancient" Sanskrit name for the regions to the east, and not, as often supposed, from the name of the state of Ch'in," the first dynasty established by Shih Huang Ti in 221 B.C.
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