Explanation: Option 1 suggests that China has observer status at the South Asian Association for Regional Cooperation (SAARC). This is correct. SAARC is an organization of South Asian nations, and China, along with several others, has been granted observer status.

Option 2 proposes that India has observer status at the Shanghai Cooperation Organisation (SCO). This is likewise accurate. The SCO is a Eurasian political, economic, and security alliance to which India was initially granted observer status before becoming a full member in 2017.

Option 3, which is that both statements are correct, is the right answer because each statement on its own accurately represents the situations.

Option 4 wrongly asserts that neither statement is correct despite the factual accuracy of both.