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"The 19th century belonged to Britain, the 20th century belonged to America and the 21st century is going to belong to Asia, China and India."

- Philip Dodd
Former Director of Institute of Contemporary Arts (ICA), London

There was a time when the world looked West. Not any more. Now the East is beginning to appear a lot more interesting. Not only because of the performance of certain characters on stage - India and China - but also due to the curious dynamics emerging out of the tussle between the two, the ramifications of which would definitely impact upon the global economic scene. The battleground of one of the most recent confrontations was the SAARC Summit, held at Bangladesh, where, curiously enough, China hadn't even been invited. Its physical absence notwithstanding, the summit high-lighted enough proof of the growing influence of the Chinese dragon south of the Himalayas and the rapidly emerging geopolitical scenario.

The Backdrop

Mr. Manmohan Singh was in for a rude awakening at the 13th SAARC Summit, held in Dhaka on the 12th of November, 2005. India's proposal to include Afghanistan as SAARC's eighth member was expected to sail through - until Nepal stepped in. The Nepalese delegation threatened to veto Afghanistan's entry unless China was included in the organization as an observer or dialogue partner. Pushed into a corner, Indian objections to China's entry were couched in such terms as "modalities", "precedence" and "memorandum of understanding" till finally, China was admitted into SAARC as an observer.

All this assumes special significance when viewed against the backdrop of the huge economic and political clout China enjoys over most of the SAARC nations. China's trade volume with all South Asian nations is close to $20 billion a year, of which about $13.6 billion is with India. Although they run trade deficits with Beijing, Pakistan, Bangladesh, Sri Lanka and Nepal receive significant economic assistance from China.

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* Contributed by: -
Amit Sharma & Ashwin Jayashankar,
PGDIM XI,
NITIE, Mumbai.