In 2016, Nepal took $215m in soft loan from China’s Export-Import Bank to construct the Pokhara Regional International Airport. The following year in May, Nepal officially joined China’s Belt and Road Initiative (BRI), a flagship project of Chinese President Xi Jinping. Since the signing of the BRI, China has been urging Nepal to select and propose specific infrastructure projects to be developed under the program. Initially, Nepal had proposed 36 projects, but they were later scaled down to nine. Now, both countries are holding talks to finalize the BRI implementation plan, which is expected to get a boost under Prime Minister Pushpa Kamal Dahal. On Aug 10 last year, former foreign minister Narayan Khadka and his Chinese counterpart Wang Yi pledged to conclude the implementation plan for BRI cooperation, and convene a meeting of the Joint Commission later that same year. However, the meeting could not take place, as Nepal was due to hold elections to the federal parliament and provincial elections on Nov 20.

Prime Minister Dahal of CPN (Maoist Center) is expected to accord priority to China’s BRI projects, unlike his predecessor Sher Bahadur Deuba of Nepali Congress, which is largely seen as ‘pro-West’. While Dahal will certainly try to make some progress on the BRI projects in order to appease Beijing, he is unlikely to accept loans under the program, which comes with lots of strings attached. Even if he were to warm up to the loan agreements, the move is likely to face fierce opposition from the NC.

Beijing is buoyed by Dahal’s appointment, but it will be folly of the Xi government to expect unquestionable cooperation from him. It must take a lesson from the latest controversy over Pokhara Regional International Airport. A tweet by the Chinese embassy on the eve of the airport’s inauguration had Nepal in a tizzy. The tweet mentioned that the airport construction was a flagship project of Nepal-China BRI cooperation, but officials and observers claim it is not. Foreign policy expert Rupak Sapkota insists that the airport project is not a specific project under the BRI, and that China was trying to give a message that it is a flagship project in Nepal, which is a part of a broader BRI map. “There is no clarity whether the BRI is more about the infrastructure projects or a central piece of China’s international engagement,” he says. “I think China will come up with a concrete concept this year, which happens to be the 10th anniversary of the BRI launch.” The construction of the new airport in Pokhara was contracted to China CAMC Engineering Co, and the loan for the project also came from China’s EXIM Bank. But the important thing to remember here is that the loan agreement was signed before Nepal became a part of the BRI. However, Wang Xin, charge d’affaires at the Chinese embassy in Kathmandu, has clearly said that the new airport is the bright name card of the China-Nepal joint project under the BRI. Sapkota is of the view that the governments from both countries should address the latest controversy and clear the confusion, if any. Former foreign minister Prakash Sharan Mahat, who signed the BRI agreement on behalf of the Nepal government, also says that Pokhara airport does not fall under the BRI. “The agreement for the airport construction loan was signed in 2016, whereas I signed the BRI agreement in 2017,” he says. “China has no basis to make such a claim.” This is not the first time China has claimed that cooperation under the BRI has already made progress in Nepal. Addressing a program titled Sino-Nepal BRI Framework Agreement: Shared Future for Trans-Himalayan Region on Sept 9, 2021, former Chinese ambassador Hou Yanqi had said: “A series of important consensus have been reached on the cooperation under the BRI, as well as the construction of the trans-Himalayan Multi-Dimensional Connectivity Network.” In reality, there had been no such “important consensus”. Observers say China is desperate to implement the BRI projects in Nepal, as the previous government under Deuba had made it clear that Nepal would not take any loans under the BRI. “By projecting Pokhara airport project as part of the BRI, Beijing is simply trying to show the world that the flagship program is gaining ground in Nepal,” says a senior government official. “Since the US is lumping together all its assistance programs as part of its Indo-Pacific Strategy, China is doing the same with the BRI.” Geopolitical analyst Chandra Dev Bhatta says Beijing’s rash and rushed approach will not only disrepute the BRI, but also create a trust deficit between Nepal and China. “It appears that China is using us to serve its broader strategic interests,” says Bhatta. Eight facts:

1.       Chinese President Xi Jinping launched BRI  in 2013
2.       Nepal signed agreement with China to take loan to construct Pokhara Regional International Airport in 2016
3.       Nepal agreed to become a party to BRI in 2017
4.       Second BRI summit listed Trans-Himalayan Connectivity as a key BRI project in 2019
5.       Nepal presented nine potential projects that could be developed under the BRI; it does not include Pokhara airport
6.       BRI implementation plan is currently under deliberation
7.       Pokhara airport was not a joint project of two countries; China was just a lender and Nepal have to pay
8. Nepal built this airport, just contract was awarded to Chinese company