The year was 1972, and what a year it was! The global champion of capitalism, the United States, crossed the Himalayan barrier to shake hands with a communist China leaving behind past irritants like the Korean War and the Vietnam War and establishing bilateral ties that would emerge as the most important international relationship.
This new chapter in the diplomatic relationship between the two amazingly different countries, which marked the end of over two decade-long halt in the ties, was a Richard Nixon-Henry Kissinger masterstroke targeted at weakening China’s ties with the then Soviet Union.
This relationship proved resilient even during trying times like the Tiananmen Square massacre (1989), the handover of Hong Kong (1997) to mainland China, constant friction over Taiwan, the collapse of communism in East Europe and the fragmentation of Soviet Union in the 1990s. China then opened up to the world from the late 70s and joining the World Trade Organization in 2001. At the climax of the winds of change, the Berlin Wall collapsed, but the ties between the US and China remained intact.
By and large, this bond between a democracy and a communist country proved beneficial for the world as the latter opened up and became a global factory for gadgets, clothing and vehicles, among others. Over the years, academic and scientific collaboration between Chinese and American universities would strengthen, boosting research on diverse fields.
Sadly, this era of engagement seems to be coming to a close and an era of disengagement seems to have begun amid speculations that China will soon be the largest economy by relegating the US to the not-so-coveted second place.
Indications of a possible disengagement are everywhere: In high seas, land, in the air and the space. The disputed South China Sea is one of the potential flashpoints, where the US is siding against China with other claimants in favor of what it calls the freedom of navigation. China’s Belt and Road Initiative will surely cross path with the Asia Pivot Strategy, making the whole of Asia, including South Asia, a flashpoint.
In a clear sign of fraying ties, American companies have started shifting from China to Vietnam, Malaysia and Indonesia, among other countries.
One would be naïve to think that this disengagement would pass off peacefully. It would be equally foolish to think that the superpower and the hyperpower would engage in a full-fledged confrontation. But there’s little doubt that the two countries will seek to harm each other's interests on their own and by taking like-minded countries on board, setting off a prolonged Cold War 2.0.
Needless to say, this kind of conflagration will be disastrous for global peace, stability, and prosperity. Already, the world is witness to the ongoing trade war between the two global giants, a major factor in the economic slowdown that is taking global proportions. As China and the US have footprints everywhere, no part of the globe will be left untouched.
A war of words is also going on between the two sides. The US is accusing China of giving concessions to Chinese companies, thereby denying a level playing field for its companies, something which the US has also started doing to protect its core interests. The US is also accusing China of stealing technologies and vice-versa. The US is accusing Beijing of currency manipulation in view of Chinese ambition to promote its national currency (RMB) as an international currency. How this trade war will end up is quite uncertain.
Amid this, Nepal offers an interesting spectacle. Here, there’s no dearth of hopeless optimists, high-stake gamblers and their lofty plans to make the country prosperous by keeping the border open to allow huge influx of peoples and goods from the immediate neighborhood and beyond, and keeping the two economies like conjoined twins.
While farm and other products from the dear neighbor can enter Nepal without much hassles, most of our products find it pretty hard to make it through the border down south. Stricter border controls are out of the question, given that the onus is on our small-time politicos to make Nepal and the Nepalis bear the historical burden of unequal relations institutionalized by questionable bilateral legal instruments like the 1950 Peace and Friendship Treaty.
Is this bunch of optimists and high-end gamblers, by the way, seeing any opportunity to benefit from the animosity of the two giants, formulating plans similar to the ones it has made to profit from the ‘prosperity’ of the two giant neighbors? This is regardless of the fact that their ongoing and future projects are mainly aimed at promoting their own national interests, whether it’s the BRI, the IPS, Arun III, cross-border pipeline projects or cross-border power transmission lines?
Or is it assessing this trade war and the possibility of a serious global recession that may force Nepali migrant workers to return home, cause market prices to escalate, and push a huge population into abject poverty again, giving rise to a humanitarian crisis? Is it formulating some plans to tide over this worst-case scenario?.