Watch the elephant and dragon tango for Asian dominance at the SAARC Summit
April 27, 2010

Just a week after China and India discussed climate change, food and financial security issues in Brasilia, Brazil with other BRIC nations, the two countries will bring discussions closer home. On Wednesday the eight SAARC (South Asian Association of Regional Cooperation) members will meet in Thimphu, Bhutan to discuss climate change and sign environment and trade pacts. While India is a member of SAARC, Chinese Vice Foreign Minister Wang Guangya who will lead a delegation to the SAARC summit has been invited as an observer.

Besides working towards a closer-knit South Asia, this 16th SAARC Summit will also be well observed to see how China and India react to each other when it comes to Asian issues. Internationally, the two nations have never found it difficult to agree and support each other on rhetoric topics such as climate change and international trade, however when it comes to Asia, sino-Indian tensions rise.

India, being the largest and fastest growing SAARC country, has always dominated South Asia, while China dominates South East Asia, most of Central Asia and has growing clout with South Asian nations Pakistan, Bangladesh, Nepal and Sri Lanka. With China’s growing influence in the region, increasing trade, economic and diplomatic ties with a majority of the Asian nations, it will be interesting to watch the elephant and dragon tango for Asian dominance.

Although bilateral trade between India and China is well on its way to achieving its US$60 billion target this year, the two nations continue to compete on regional trade. While China is the largest trade partner for many Asian nations including India, India is trying its level best to remain competitive while maintaining quality. Further as both nations grow rapidly their competition over natural resources is augmented, raising bilateral tensions and prices. At the same time, both countries are also grappling with the similar issues of high FDI inflows, rapidly appreciating currencies, high inflation and ballooning asset prices. While they share growth pangs, the two nations continue to be locked in a tussle over Asian dominance, it will be interesting to watch if the dragon and elephant can tango?

2010 marks the 25th year of the summit and all eight member nations are expected to work towards a common effective regional mechanism to cope with climate change. Studies have shown that rising sea levels because of melting polar ice caps mean that Maldives might get submerged, while Bangladesh will lose 20 percent of low-lying areas in the Bay of Bengal resulting in the displacement of 25 million people.

The 16th summit is expected to sign three major agreements. Agreement on Convention on Cooperation on Environment and Climate Change, Agreement on Natural Disaster Response Mechanism and Agreement on Trade in Services among member states. The other issues likely to taken up by the summit would be energy and food crisis, terrorism and the effective implementation of the SAARC Development Fund.

Founded on Dec. 8, 1985, there are eight member countries in SAARC — Nepal, India, Bhutan, Bangladesh, Maldives, Sri Lanka, Pakistan and Afghanistan. China, Japan, the Republic of Korea, the United States, Iran, Mauritius, Australia, Myanmar and the European Union have joined SAARC as “observers.”

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