The correct answer is option 3, China. Khumbum monastery is situated in China.
Option 1, India, is incorrect. While India is home to many Buddhist monasteries, Khumbum monastery is not one of them.
Option 2, Thailand, is also incorrect. Thailand is known for its numerous Buddhist temples and monasteries, but Khumbum monastery is not located in Thailand.
Option 4, Japan, is also incorrect. Japan has a rich Buddhist heritage and is home to many famous temples and monasteries; however, Khumbum monastery is not situated in Japan.
In summary, Khumbum monastery is situated in China, making option 3 the correct answer.