Developments in Nepal and Chinese Engagement

Introduction

Nepal provides China a strategic foothold as a gateway to South Asia and is also important to it for security of Tibet. China’s leverage in Nepal serves to weaken India’s regional influence. The paper aims to study Sino-Nepal relations in the backdrop of developments since 2019.

High Level Visits and Politico Diplomatic Engagement

Nepal’s President Bidya Devi Bhandari visited China in Apr 19, wherein seven bilateral agreements were signed. President Xi Jinping’s visit to Nepal in Oct 19 - the first by a Chinese President since 1996, resulted in the signing of 20 agreements / MoUs. Chinese Defence Minister Wei Fenghe visited Nepal in Nov 20 to discuss resumption of non lethal supplies and training assistance by China.

Hou Yanqi (HY), the Chinese ambassador to Nepalⁱ, got the Nepali Communist Party (NCP) Central Committee meetings to seek PM Oli’s removal repeatedly postponed - preventing an NCP splitⁱⁱ in 2020. She met NCP leaders and the President in Nov 19ⁱⁱⁱ, May 20^iv, Jul 20^v and post dissolution of the House of Representatives (HoR) in Dec 20^vi. She met Madhav Nepal (MN) of CPN-UML and Pushpa Kamal Dahal (PKD) of CPN-Maoist Centre in Mar 21 to urge continuity of the NCP^vii.

Nepal politicising the Lipulekh link road developed by India during India’s border dispute with China and COVID crisis is seen by some as instigated by China^viii. HY called Nepal passing a new map showing Kalapani and Limpiadhura within Nepal as Nepal upholding its sovereignty^ix. In a Sep 20 interview with the Global Times, Nepal’s Ambassador to China Mahendra Bahadur Pandey hailed China-Nepal relations while castigating India for trying to ruin China-Nepal ties^x. Nepal took part in China chaired multilateral video discussions with South Asian countries (less India, Bhutan and Maldives) on epidemic prevention, OBOR cooperation, regional security and poverty alleviation in Jul 20, Nov 20, Jan 21 and Apr 21.

Party to Party Ties. The Chinese Communist Party (CCP) signed a sisterhood deal with the NCP in Sep 19. In Jun 20 a virtual workshop on ‘Running the Party and the Govt’ was held between the NCP and the CCP^xi. On dissolution of the HoR, a Chinese delegation led by Guo Yezhou, Vice minister CCP International Dept, made an unscheduled four day visit to Nepal^xii. It met the President, and leaders of all political parties and factions.

Effect of COVID

COVID is having a major impact on Nepal. China sent assistance in a number of tranches to Nepal. Initially Chinese companies did not seem to be forthcoming in supplying vaccines to Nepal. Only after India’s vaccine donation of a million doses and contracting of another two million, did China aid with 800,000 doses. China prevailed on Nepal for emergency approval to the Chinese vaccine without trial data being provided, and to sign a non-disclosure agreement before seeking to purchase another four million vaccine doses^xiii,xiv. The second wave of COVID in India allowed China to push its vaccines as well as provide oxygen cylinders to Nepal^xv,xvi. The fact that India provided oxygen and more vaccines than China was conveniently underplayed.

Bilateral border trade was adversely affected due to COVID restrictions by China^xvii. China permitted only one way border trade into Nepal, leading to a reduction of 18.5% in imports from and 50% in exports to China from July to Dec 20^xviii. Interestingly, Nepal’s media has not blamed China for the same but its own govt for not taking it up with China. Tourism, a major money earner for Nepal was severely affected, as was promotion of 2020 in China as the “Visit Nepal Year’^xix.

Progress in OBOR projects slowed drastically. Workers for the Pokhara airport arrived only in Dec 20, and the project is likely to be completed by early 2022^xx. Nepal would conduct a feasibility study for construction of a dry port at Korala pass area in Mustang^xxi.

Soft Power

Chinese soft power increased with Mandarin being made compulsory in many schools, an agreement to set up a second Confucius Institute, language training for journalists, Nepal being chosen as the theme country in the Beijing International Photo Exhibition amongst others.

Anti China Events

There were many events not flattering for Nepal–China relations including reports of Chinese encroachment at Humla, clashes with locals, one way restrictions by China at the border crossings, perceptions of interference by China in Nepal’s internal politics and the high price of Chinese vaccines.

Assessment

Because of Nepal’s small size, relatively small investments bring about disproportionate perception of Chinese largesse, as well as strategic benefits for China. Nepal seems an important cog in China-South Asian Countries meetings chaired by China in the garb of COVID cooperation and poverty alleviation. Along with geopolitical gains, the format probably seeks to sideline the SAARC and India’s role in South Asia.

China’s sensitivity to events in Nepal is apparent from the alacrity of Wei Fenghe’s visit - post visits of Indian officials to Nepal. China’s influence seems to enable it easy access to various leaders, with the CCP sending delegations even when uninvited and amidst political turmoil. China also engaged leaders of non-NCP parties to form a coalition if a possibility arose.

Nepal’s politicising the Lipulekh border issue is likely to have been PM Oli’s effort to whip up nationalism to remain in power.

The intelligentsia, mainstream media and political leadership seem to be discernibly pro-China. In spite of numerous events in Nepal not flattering to China, anti-China statements by the leadership and media traction for such events has been limited. However, anti-India rhetoric seems the norm, as is an absence, or at best a muted mention of Indian aid, projects and COVID assistance. India’s big brother image and inability / delay in providing already contracted COVID vaccines will continue to be exploited by China to nurture an anti-India feeling and divert Nepal’s attention from China’s exploitative actions.

Conclusion

China’s actions in this country are clearly guided by its strategic aims. It has subtly encouraged a narrative amongst the Nepalese against India. India needs to maintain its historic economic and cultural bonds with Nepal and work towards the mutual long term benefit of both nations.

(The views expressed in the article are that of the author and do not reflect official views.)