As a result, the economic development and regional economic cooperation in South Asia are plagued by setbacks. For example, India has recently tightened security checks at its border with Pakistan, Bangladesh and Nepal in its bid to prevent the infiltration of terrorists. The move dampened its trade relations with these countries and hindered the progress of the South Asian Free Trade Zone.

How to fight terrorism more effectively was one of the most important topics of this year's SAARC summit. In mid-May last year, interior ministers of SAARC members met in Dhaka, capital of Bangladesh, to discuss measures to address mounting terrorist activities. Nine decisions were made to forge stronger regional cooperation, including jointly cracking down on armed terrorism and drug trafficking, re-launching the regional antiterrorism institution and sharing intelligence and experience in combating terrorism.

At the summit, leaders of SAARC members held consultations on judicial cooperation and the extradition of terrorists in the spirit of beefing up the South Asian antiterrorism mechanism. Earlier, Sri Lankan Foreign Minister Rohitha Bogollagama called on SAARC to take specific steps to curb terrorist funding and the smuggling of humans and drugs, and arrest the growing activities of front organizations of the terrorist groups.

Attracting global attention

SAARC has seven founding members---India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan and Maldives. Afghanistan became its eighth member at the 13th summit in 2005. In the meeting of the SAARC Council of Ministers in August last year, China, Japan, South Korea, the United States and the EU were confirmed as observers of the organization. Enlarged participation was a prominent feature of this year's SAARC summit. It shows that South Asia has drawn greater attention from around the world and is exerting a growing influence on the international community.

China is a longtime friend to South Asian countries. They are endowed with distinctive geographical advantages in pursuing economic and trade cooperation. With a large population, South Asia boasts a huge market with varied demands. It is an important destination for Chinese investment. Statistics from China's Ministry of Commerce show that the trade volume between China and South Asia reached nearly $30 billion in 2006, up 60 percent from the previous year, far above the growth in trade between China and any other country or region.

Contracts on economic and technological cooperation China signed in South Asia totaled $13.8 billion. The region has become one of the most important markets for China's overseas project contracting. In recent years, along with the rapid economic development of China and South Asian countries, energy has stood out as a new area for bilateral cooperation. India is China's largest trading partner in South Asia with bilateral trade exceeding $20 billion in 2006.

Chinese Premier Wen Jiabao demonstrated China's positive stance toward developing relations with SAARC in a congratulatory message to the 12th SAARC summit in January 2004. In December that year, business people from China and South Asian countries gathered in a business forum in Kunming, where a cooperation agreement was signed between the China Council for the Promotion of International Trade and the SAARC Chamber of Commerce and Industry. In the Dhaka Declaration adopted at the 13th SAARC summit in November 2005, SAARC welcomed and agreed in principle with China's desire to be an observer of the organization. The SAARC Council of Ministers took a formal decision to grant China observer status in July 2006.

Chinese Foreign Minister Li Zhaoxing, who led the Chinese delegation, said at this year's summit that China follows the SAARC cooperation process closely and is committed to promoting regional cooperation. It appreciates the decision by SAARC to accept it as an observer, he said, adding that the Chinese Government supports the goals and priorities set by SAARC. It will carry out exchanges with the organization, expand practical cooperation with it, facilitate its cooperative process and contribute to peace and development in South Asia while respecting the wishes of SAARC countries and upholding equality and mutual trust.

Li said China is willing to explore the possibilities with SAARC to initiate a poverty alleviation mechanism and a regular meeting mechanism on disaster relief and rehabilitation; the country will also strengthen cooperation in human resources training, people-to-people linkages and academic exchanges with SAARC countries; and it is ready to cooperate with these countries in the fields of infrastructure construction, trade and energy as well.

As the largest neighbor of South Asia, China sees great value in seeking close relations with South Asian countries. It hopes to build amicable, equal and cooperative ties with South Asian countries and is ready to join hands with these countries to work toward common development, enduring peace and regional stability and prosperity on the platform of SAARC.

The author is a scholar at the China Institute of International Studies