The relations between Nepal and China started floundering following the formation of the Sher Bahadur Deuba government in July 2021. 

For most of the past 13 months, the two sides showed little enthusiasm for mutual engagement. Beijing saw the Deuba-led government as pro-western. The government on its part also kept a safe distance from the northern neighbor and kept its foreign engagements more or less limited to India and Western powers. 

The two sides resumed bilateral dealings only in recent months. After China’s two back-to-back high-level trips to Nepal—Chinese Foreign Minister Wang Yi visited in March and the Chinese Communist Party’s International Liaison Department head Liu Jianchao came in July—Foreign Minister Narayan Khadka this week made a reciprocal visit to Beijing. 

“The visit aims to build an atmosphere of trust to further enhance our long-standing cordial relations,” says Arun Subedi, PM Deuba’s foreign affairs advisor.

The soured Nepal-China ties appear headed for a thaw. The resumption of the meetings of bilateral mechanisms, including one related to border management, is one indication of this.

Khadka held talks with his Chinese counterpart Yi on bilateral and regional issues. By inviting Khadka, China, meanwhile, wants to seek fresh assurance from Nepal on ‘One China policy.

This is particularly important for Beijing at a time its ties with Washington are at a historic low following US Speaker Nancy Pelosi’s Taiwan sojourn last week.

Prior to Khadka’s China trip, his ministry on August 5 had issued a statement essentially vowing Nepal’s steadfastness to ‘One China’.  In his meeting with Khadka in Beijing on August 10, the Chinese foreign minister conveyed his country’s position on Taiwan and sought Nepal’s support.  

According to China’s Ministry of Foreign Affairs, Wang stressed on joining hands with other countries to “oppose US interference in China’s internal affairs”.  In the meeting, Khadka reiterated Nepal's unwavering commitment to the One China Policy and assured that the Nepali territory will not be allowed to be used for any activity against China. 

Beijing has reason to doubt Kathmandu’s commitment though, particularly after the parliament ratified the American Millennium Corporation Challenge (MCC) compact despite Beijing’s objection. 

The formation of a government probe panel to study China’s alleged border encroachment and Nepal’s ‘pro-Western’ position on the Russia-Ukraine war have added to the suspicions of the northern neighbor. 

Nepal has its own reasons to question China’s intent. Chinese overblown reaction to Nepal’s decision to ratify the compact was unbecoming of a good friend. Kathmandu is also displeased with Beijing for restricting the movement of goods across China-Nepal border points, citing Covid restrictions.   

China’s claim that the West is fueling anti-China activities through Tibetan refugees in Kathmandu and its decision to engage only Nepal’s communist parties have also not gone down well with PM Deuba and his Congress party.  

Upendra Gautam, general secretary of China Study Center Nepal, says the government lacks a clear vision and assertiveness to deal with China and other powers. 

“The Deuba government seems to have realized that now,” he says. “Let’s hope Foreign Minister Khadka’s visit is not just a ritual.” 

Gautam says big powers always want small countries like Nepal on their side. “The important thing is that we assert ourselves and clearly explain the fundamentals of our foreign policy.”  

Besides clearing the air with Beijing, Khadka’s visit is also aimed at sending the message that Nepal is not taking sides and wishes for balanced relations with all powers. 

China too has been trying to convince Nepali political parties, particularly the ruling Congress, that it is not partial towards communist forces. 

During his Nepal trip, Liu Jianchao tried to convince Congress leaders that China’s Nepal policy is not guided by ideology.

Speaking on Khadka’s China visit, Chinese Foreign Ministry Spokesperson Hua Chunying on August 5 said: “China looks forward to strengthening strategic communication, cementing mutual support, and constantly promoting strategic partnership for development and prosperity.”  

Subedi, the advisor to Deuba, says there could be progress on some bilateral projects after the visit. “We want to enhance economic cooperation with China,” he adds.

China is pushing for the implementation of some projects under the Belt and Road Initiative. Chinese officials are also concerned over the implementation of the pacts reached between the two countries during the 2019 Nepal visit of President Xi Jinping.  

On August 10, Khadka and his Chinese counterpart Wang Yi held bilateral talks in  Shandong, an eastern province of China. 

 According to the Ministry of Foreign Affairs, the two sides had cordial and fruitful meetings which took stock of all aspects of Nepal-China relations and agreed to promote cooperation in the areas of mutual interests.

In the meeting, both foreign ministers expressed their commitment to the timely implementation of the agreements signed and the understanding reached during high-level visits in the past.  China announced that China will carry out the feasibility study of the Keyrung-Kathmandu railway under grant assistance. 

We have raised all the issues related to China including the border, supply of goods, and other issues, said official requesting anonymity. During the meeting, according to the official, the Nepali side reiterated its position on One-China. 

As the two neighbors appear to move towards a rapprochement, more high-level exchanges are on the cards, with CPN (Maoist Center) Pushpa Kamal Dahal likely to visit China next month.