ISLAMABAD: President Pervez Musharraf has said China's observer status at the South Asian Association for Regional Cooperation will strengthen the grouping and provide more "peace and security" in the region.

"We are very happy and proud that China has got an observer status in SAARC. Very importantly and significantly a very well deserved observer status because I think with China's participation in SAARC, it will give a big boost to regional cooperation within SAARC, which at the moment unfortunately has not been the case because of conflict within the region and conflict between the two larger members of SAARC that is India and Pakistan," the Pakistan President told scholars at the Shanghai Institute of International Relations.

General Musharraf is in China for the sixth summit of the Shanghai Cooperation Organisation, an inter-government group that brings together China, Russia, Uzbekistan, Tajikistan, Kazhakstan and Kyrgyzstan.

Pakistan is an observer at the SCO along with India, Iran and Mongolia.

"With China's participation in SAARC there will be peace and security and more development, more cooperation and more serious interaction. Therefore we see China's participation in SAARC as a very welcome step which will give a boost to socio-economic interaction within SAARC," General Musharraf said in his SIIS address that was telecast on Pakistan Television.

China obtained observer status in SAARC at the Dhaka summit in January 2006.

General Musharraf, who is pushing hard for full membership of the SCO, has pitched Pakistan to audiences in China not just as an exclusively South Asian nation but as a country located at a strategic crossroads close to oil-producing regions in an energy-hungry world.

At the SIIS, he highlighted Pakistan's "geo-strategic location as a regional hub" and its location "at the crossroads" of Central Asia, West Asia and South Asia and "in the vicinity of regions rich in natural resources and energy".

President Musharraf presented the Gawadar Port in Balochistan, built with Chinese assistance, as the shortest route for oil-producing Central Asia to the Arabian Sea. He told his audience that the port could act as a regional hub.

But his main invitation was to China to use Pakistan as a shortcut for transporting oil from West Asia through Gawadar. President Musharraf also offered to extend the proposed Iran-Pakistan-India pipeline to China. He spoke along the same lines in his address to the plenary session of the SCO summit on Thursday, according to reports in the Pakistan media.

Addressing a group of Chinese businessmen separately, President Musharraf said a Free Trade Agreement between Pakistan and China was certain by the year-end. He proposed a rail link between the two countries running parallel to the Karakoram Highway that would facilitate greater trade between the countries.

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