Even as Prime Minister KP Sharma Oli is in Beijing on an official visit, there has been much speculation over the supposed Chinese noncha­lance. Some even had issues with the press release issued by our Ministry of Foreign Affairs, which made no mention of Oli meeting General Secretary of the Chinese Communist Party and President Xi Jinping—and therefore a proof of Chinese lukewarm response to Oli’s vis­it. But in Beijing on Wednesday Xi and Oli had delegation level talks and one-on-one for over an hour; this despite the presence of two other important dignitar­ies in town: North Korean leader Kim Jong Un and Bolivian President Evo Morales. But it is true that the Chi­nese side is wary of the gap between Kathmandu’s words and deeds—particularly on project implementation. Nepali side’s tardiness, even childishness, in proposing projects to be built under the Belts and Roads Initia­tives (BRI) has been of concern for them. For example, a certain Nepali ministry had reportedly floated the proposal of building a Disney-style theme park in Nepal under the BRI. Clearly there is gap in understanding between the two sides on what the BRI is and isn’t.

 

Xi-Modi Summit

 

There is more to the optics from the Chinese side and it isn’t related to what Oli did or didn’t. If anything, as former Prime Minister Baburam Bhattarai pointed out in his article in Kantipur Daily on June 18, the Xi-Modi Wuhan summit in April is likely to cast shadow on Chi­na-Nepal relations for sometime—at least in terms of optics.

 

While there is no word on what was discussed in relation to Nepal, there are speculations that Modi ‘acknowledged Chinese strategic interest in the Maldives and Sri Lanka,’ while urging Xi to ‘go slow on Nepal and Bhutan.’ This may explain both the sort of toning down of rhetoric on the Maldives in the Indian media as well as some of perceived Chinese nonchalance towards Nepal in the Nepali media. According to this theory, if Beijing has accepted Delhi’s request, the reciprocal high-level visit to Nepal from the Chinese side will happen at Premier Li Keqiang’s level, not at Xi’s level.

 

China also needs Nepal

 

Those who see Chinese cold shoulder forget that China needs us as much as we need them. Chinese overture towards Nepal is part of a long strategy—further buttressed by Nepal’s blockade-in­duced strategic autonomy in its foreign policy.

 

As Sudheer Sharma observes in his brilliant article in Kanti­pur on June 15, China wants over­land access to Indian markets [and parts of Bangladesh] and a route through Nepal is the easiest way.

 

Indian states of Bihar, Uttar Pradesh and West Bengal that border Nepal are highly popu­lous, with around 400 million people between them, which comes to roughly the size of European Union and bigger than the United States. Bangladesh has another 163 million people. These are potentially huge mar­kets for mass-market goods as their already sizeable middle class continues to grow.

 

This presents Beijing with unique opportunity to develop its Tibet and even Xinjiang as production and trading hubs—with some production capacity outsourced to Nepal. For com­parison, Nepal can be a nodal point to bigger markets than Paki­stan and Central Asia combined. Pakistan has population of 193 million and five former Central Asian Soviet Republics have a combined population of 70 million. Nepal can and should leverage these facts as it deepens engagement with China.

 

Clearly Beijing could put on a show out of respect for Modi, leader of one of its biggest trad­ing partners, but what matters is the substance (or lack of it) on Nepal-China front. That depends as much on Nepal as it does on China. As Beijing is wary of Nepal’s poor implementation capacity, the idea of establishment of a bilateral oversight mechanism is a significant first step.