China’s SAARC Bid and Implications for India

Gauri Agarwal, Research Intern, Institute of Chinese Studies

Pakistan’s support to China for full membership to SAARC and India’s refusal to entertain the bid is a case of the use of geopolitics to pursue selfish aims. Whether China will be accepted or not remains to be seen, but what China brings to the table needs a careful cost-benefit analysis.

SAARC’s Shortcomings

The importance of SAARC as a regional organization is recognised by all leaders. But there is a frank acknowledgement that the organization has failed to live up to the hope and aspiration of one-fifth of humanity.

The South Asia Preferential Trading Agreement (SAPTA) was signed at the 7^th summit in 1993, but it has not yet been operationalized. Proposals to establish the South Asian Food Reserve and South Asian Development Fund have also met the same fate. Similarly declarations on enhancing political cooperation and promotion of mutual trust and understanding reiterated in each summit have registered limited success. The delay in the implementation of the South Asia Free Trade Agreement (SAFTA) also shows the lack of commitment in the region for economic integration. Most of the programmes and achievements exist only in official documents and their activities confined to only holding seminars and workshops¹.

Perceptions of the failure of SAARC to implement its charter have been aggravated by the political climate obtaining in the region². The constant and growing disputes between India and Pakistan have made SAARC a failure as a regional forum, for economic and regional integration.

India is the preponderant country in terms of both size and economy, in the SAARC region. India’s neighboring countries have often felt insecure about India’s ambitions. There are concerns of Indian businesses disrupting the indigenous business of countries³ and this in turn also encourages countries to use SAARC as an anti-India platform.

China in SAARC

China became a SAARC observer member in 2005. Ever since, it has made significant progress in terms of its participation in South Asian region in the form of unilateral events like China-South Asia business forum, China-South Asia business council, China-South Asia Expo, etc⁴. In 2014, China even nominated an envoy for SAARC, indicating the significance it attaches to this grouping. Moreover, China’s other initiatives like the BCIM Economic Corridor and China-Pakistan Economic Corridor have received positive responses from other SAARC members, if not always from India.

History, geography and culture closely link China and South Asia to each other. Among other things, China has common borders with India, Pakistan, Afghanistan, Nepal and Bhutan. China cannot be viewed in isolation or separately from South Asia, particularly in matters relating to comprehensive security, environment security and trade liberalization in the region⁵.

China’s diplomacy, trade and investments, and cooperative agreements with SAARC nations are thus enabling it to have a greater influence in South Asia. But having a status of an observer state in SAARC, it does not have voting rights. In November 2014, during the 18^th SAARC summit, China pitched for joining the regional bloc as a full-member state⁶. However, it remains an issue of debate and India has till now blocked China’s attempts to become a full-fledged member of SAARC, on the grounds that SAARC needs to work towards strengthening its ties with new partners, rather than expanding membership⁷.

South Asia is strategically important for China, and hence its desire for membership of SAARC will continue. Through it, China hopes to increase its own influence in the region, work towards win-win cooperation, promote multilateralism, reduce the ability of US and Japan (also observer members) to affect China’s interests in the region and counter the separatist tendencies and ethnic unrest in northwest and southwest China.

The Pakistan Angle

One of the foremost proponents for China to become a member of SAARC is Pakistan. Its main intention is to limit India’s dominance in the region, as China can be a counterweight to India’s power within the structure and it can benefit from economic, political and military engagements with China. Moreover, the China-Pakistan alliance would further undermine India’s profile in SAARC⁹.

The showdown over the 19^th SAARC summit added fuel to the fire. The summit which was to be held in Pakistan was cancelled as it was boycotted by India and its close allies, Bhutan, Bangladesh and Afghanistan¹⁰. India cited Pakistan’s involvement in the terrorist attack at an Army camp in Uri town of Kashmir, in which 19 soldiers died, as the reason for its decision to boycott the summit. The boycott exposed Pakistan’s isolation and India’s leverage in the region.

Pakistan is now exploring the possibility of creating a greater South Asian economic alliance to counter India’s controlling hold on SAARC. This ‘greater South Asia’ includes China, Iran and the neighboring Central Asian republics. Although this proposal has not really received any real acknowledgement, China’s entry into this larger version of SAARC has been supported by many¹¹.

Cost-benefit Analysis

China’s entry may work against India as well as for the whole South Asian region. SAARC is already affected by the shadow of the India-Pakistan fault line which has made it one of the least economically integrated regions of the world. Inclusion of China will create another shadow of the India-China fault line¹². Moreover, China will get the right to use a veto in SAARC affairs, which will prove detrimental from an Indian standpoint, since China can obstruct any project that could be strategically beneficial to India.

In addition, China’s economic dominance will bring about certain challenges, like for example, that posed by Chinese exports to the region. It is also going to have an impact upon local manufacturing. In consequence, the weaker economies are likely to go under and become, essentially, exporters of raw materials¹³. China can meaningfully engage with SAARC even without full membership as most of the SAARC members already have very high volumes of trade with China and separate bilateral relations.

Hence, before allowing China’s membership it is important for the SAARC members to assess whether China’s entry will be worthwhile or if its expected domination will further reduce the credibility and functioning of SAARC. There is no doubt that the two key stakeholders of the region are India and China, hence areas of cooperation can be recognized for the benefit of SAARC.

SAARC summits should act as a forum where member states should discuss not only matters of regional importance but also the underlying causes of tension in bilateral relations, only then can a possible way forward for the organization can be found.

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