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China said Tuesday it would “fight to the end” and take countermeasures against the United States to safeguard its own interests after President Donald Trump threatened an additional 50% tariff on Chinese imports, Associated Press reported.

The Commerce Ministry said the U.S.‘s imposition of “so-called ‘reciprocal tariffs’” on China is “completely groundless and is a typical unilateral bullying practice.” 

China has taken retaliatory tariffs and the ministry hinted in its latest statement that more many be coming. 

“The countermeasures China has taken are aimed at safeguarding its sovereignty, security and development interests, and maintaining the normal international trade order. They are completely legitimate,” the ministry said. “The U.S. threat to escalate tariffs on China is a mistake on top of a mistake and once again exposes the blackmailing nature of the US. China will never accept this. If the US insists on its own way, China will fight to the end," according to Associated Press.

China is organizing the Boao Forum for Asia (BFA) from March 25 to 28, in Qionghai City, South China’s Hainan Province. It is an annual event at which government officials, heads of international organizations, business leaders and scholars converge to discuss the most pressing issues of the day. However, there will not be high-level participation from Nepal as Nepal’s Ambassador to China Krishna Prasad Oli has been told to represent Nepal.

Last year, then Prime Minister Pushpa Kamal Dahal’s foreign affairs advisor Rupak Sapkota had attended the program. In the past, there used to be participation of the prime minister or president but nowadays Nepal is sending low-key officials. Officials say as Nepal’s top political leadership snubbed the invitation, China has not shown interest to lend the invitation to the top political leadership.

Launched in 2002, the forum has witnessed Asia’s regional integration as it pulled through the Asian financial crisis in 1997, the SARS epidemic in 2003, the global financial crisis in 2008 and the recently concluded Covid-19 pandemic.

In the first conference, King Birendra was invited in 2001 and in 2015 then President Ram Baran Yadav represented Nepal.  Now, the region once again finds itself on the cusp of change. “Our world is in the middle of a pivotal transition, where disruptive shifts are profoundly reshaping the international order,” BFA Secretary General Zhang Jun said at a press conference in Beijing. “What this means is that the BFA, as a high-level platform dedicated to dialogue and cooperation, now stands at a new horizon, where it is charged with both greater expectations and heavier responsibilities,” he added.

With the growth of its power, China’s overseas interests are rapidly expanding. Along with this, in addition to the extreme containment and suppression by Western countries, there are also various ‘stigmatizing’ hype such as ‘neo-colonialism’, ‘debt trap’, ‘China threat theory’ etc.. This highlights the sharp cognitive opposition between China and Western countries in expanding overseas interests.

Expansion methods

Win-win cooperation vs zero-sum game

The concept of win-win cooperation proposed by China emphasizes achieving complementary resources and shared advantages through close cooperation with host countries, thereby fostering mutual benefit and ultimately leading to common development and maximized interests. The ‘Belt and Road Initiative’, put forward by China in 2013 and based on the concept of win-win cooperation, has achieved numerous results, covering policy communication, facility construction, trade cooperation, investment growth, and project construction etc., injecting new momentum into global economic growth. China’s pursuit of a win-win development path in expanding its overseas interests is the right path for the world.

Driven by zero-sum game mentality, in international politics, Western countries focus on safeguarding their own interests, viewing China’s expansion of overseas interests as a threat to their own interests, and fearing that China’s strength could undermine their power and status in host countries. The zero-sum game mentality espoused by Western countries is detrimental to others and not beneficial to themselves, often leading to tension and conflict in international relations.

Expansion approach

Peaceful development vs ‘Thucydides Trap’

The term ‘Thucydides Trap’ is used metaphorically to describe the competitive situation among major powers in contemporary international relations. Specifically, when an emerging power rises and attempts to play a greater role on the international stage, it often clashes with existing powers in terms of resources, markets, influence, or geopolitical advantages. This situation of mutual confrontation and threat may ultimately lead to the outbreak of war. Based on the cognitive logic of Thucydides Trap, Western countries often pursue containment and suppression strategies towards the friendly cooperation between China and host countries in areas such as economy, military, and technology.

However, ‘Thucydides Trap’ is not an iron law, and war does not necessarily break out between major powers. China’s concept of peaceful development reflects the common pursuit of peace and development by countries around the world, offering the possibility to avoid the ‘Thucydides Trap’. Based on the concept of peaceful development, China has always been committed to becoming a builder of political peace, a contributor to economic development, and a maintainer of social order for host countries in the expansion of its overseas interests.

Expansion path

Co-consultation, co-construction, and sharing vs colonial plunder

The expansion of overseas interests by Western countries employs the bloody and brutal method of colonial plunder. Specifically, Western countries maintain their colonial rule through violent occupation of land and signing unequal treaties. By occupying, enslaving, and exploiting weak countries, they gain financial and trade privileges, as well as plunder natural, human, and strategic resources. They expand their sphere of influence and balance competitors through colonial expansion in order to ensure their own security and national interests. They regard themselves as disseminators of civilization, attempting to establish a kind of social structure and cultural identity in colonies that is similar to that of their homeland.

Guided by the principles of co-consultation, co-construction, and sharing, China promotes joint consultation with host countries in the expansion of overseas interests. This ensures that host countries have an equal voice and participation rights, enabling political disputes and economic conflicts to be resolved through consultations. Cooperative projects are jointly undertaken by both parties, with the results shared to foster mutual development and prosperity. Furthermore, it aims to involve citizens of host countries as participants, contributors, and beneficiaries of these projects, particularly ensuring that local residents also reap the benefits, thereby creating a conducive and friendly environment for the expansion of China’s overseas interests.

Expansion goal

Community with a shared future for mankind vs hegemony and power politics

Based on the concept of a community with a shared future for mankind, China is dedicated to promoting high-quality development in host countries during the expansion of its overseas interests, implementing global development initiatives, global security initiatives, and global civilization initiatives in these countries. China is proactively addressing various complex social issues, and encouraging more citizens of host countries to participate in Chinese projects and share dividends, thereby contributing Chinese wisdom and solutions to the economic and social development of host countries and demonstrating its responsibility as a major power. The concept proposed by China has garnered support and endorsement from the majority of countries worldwide, particularly those from the ‘Global South’.

The hegemonic behavior of Western countries manifests as gross interference in the internal affairs of other countries, manipulation of international affairs, and expansion of spheres of influence through military means. The core idea of power politics is that ‘power is truth’, referring to the policies and activities of Western powers that bully the weak, arbitrarily dominate other countries’ people, interfere in other countries’ internal affairs for their own interests, and infringe on other countries’ interests. Based on the logic of hegemonism and power politics, Western countries have seriously damaged international peace and stability, the well-being of people all over the world, and the common interests of all mankind through various perverse acts in the world.

Conclusion

In response to the cognitive opposition between China and western countries in expanding overseas interests, China should uphold the concept of peaceful development and win-win cooperation, and strive to build a community with a shared future for mankind. At the same time, in countries where China’s overseas interests are expanding, China should take practical actions of extensive consultation, joint contribution, and shared benefits to practice its own propositions and demonstrate international fairness and justice.

The author is  Dean of China’s Overseas Interest Studies Institute at Yangtze Normal University

After years of strained relations, China has recently intensified its engagement with the Nepali Congress (NC), Nepal’s oldest and largest democratic party. Over the past decade, the relationship between China and the NC had soured due to various political and diplomatic reasons. However, recent developments indicate a shift in China’s approach, as Chinese diplomats and leaders of the Communist Party of China (CPC) have begun actively engaging with NC leaders.

A notable example of this renewed engagement is the recent visit of an NC delegation led by senior leader Sujata Koirala to China. During the visit, the delegation toured several Chinese cities, including Chengdu, and held meetings with senior CPC officials. This marks a significant step in China’s efforts to strengthen ties with the Koirala family, a prominent political dynasty within the NC.

In early March, Sun Haiyan, Vice-Minister of the International Department of the CPC Central Committee, met with Koirala. According to a Chinese readout, Sun praised the NC and the Koirala family for their long-standing commitment to fostering China-Nepal friendship and for upholding the correct stance on issues related to Xizang (Tibet) and Taiwan. Sun emphasized the CPC’s willingness to enhance exchanges and cooperation with the NC and other major political parties in Nepal, urging both sides to focus on implementing the consensus reached between the two countries.

Koirala, in response, reaffirmed the NC’s firm support for the One-China principle and expressed her party’s eagerness to leverage the 70th anniversary of Nepal-China diplomatic relations to deepen mutual understanding and collaboration. This marks a notable shift from the past, when relations between China and the NC deteriorated significantly. One key incident was in 2016, when NC President Sher Bahadur Deuba shared a stage with a representative of the Tibetan government-in-exile at an event organized by the India Foundation in Goa. This incident, among others, led to a period of mistrust and strained ties.

Other factors contributing to the rift included China’s preferential engagement with Nepal’s communist parties, often at the expense of sidelining the NC, as well as the NC’s public criticism of China’s alleged border encroachment and its cautious stance on China’s Belt and Road Initiative (BRI). During this period, Chinese state media frequently portrayed the NC as a pro-Indian party, further exacerbating tensions.

However, relations began to improve following the signing of the Framework for Belt and Road Cooperation during Prime Minister KP Sharma Oli’s visit to China in December 2023. NC General Secretary Gagan Kumar Thapa and Foreign Minister Arzu Rana Deuba played pivotal roles in facilitating the agreement, despite strong opposition within their own party. Their support for the BRI marked a turning point in China-NC relations, even as senior NC leaders like Prakash Sharan Mahat and NP Saud continued to voice concerns about the initiative, arguing that it contradicted the party’s position against taking loans under the BRI.

Since the signing of the BRI agreement, there has been a noticeable increase in visits by NC leaders to China, and the Chinese Embassy in Kathmandu has actively engaged with senior NC figures. This represents a departure from China’s previous approach of primarily engaging with Nepal’s communist parties, a trend that had persisted for over a decade. During this period, China focused on fostering unity among Nepal’s communist factions, leading to a perception among NC leaders that they were being marginalized.

China’s recent outreach to the NC suggests a recognition of the need to broaden its engagement beyond communist parties. This shift is seen as an effort to build a more balanced and inclusive relationship with Nepal’s political landscape. While senior communist leaders have frequently visited China over the years, NC leaders have rarely done so. The current wave of engagement indicates that both sides are working to address past misunderstandings and strengthen bilateral ties.

This renewed engagement comes at a critical juncture, as China seeks to consolidate its influence in Nepal amid evolving regional dynamics. By fostering closer ties with the NC, China aims to ensure that its initiatives, including the BRI, gain broader political support within Nepal. For the NC, this represents an opportunity to reaffirm its role as a key player in Nepal’s foreign policy and to balance its relationships with both China and India.

Beijing's tariffs on certain US agricultural goods in retaliation for President Donald Trump's latest hike on Chinese imports came into force Monday, as trade tensions mount between the world's two leading economies, AFP reported.

Since retaking office in January, Trump has unleashed a barrage of tariffs on major US trading partners, including China, Canada and Mexico, citing their failure to stop illegal immigration and flows of deadly fentanyl.

After imposing a blanket 10 percent tariff on all Chinese goods in early February, Trump hiked the rate to 20 percent last week.

Beijing reacted quickly, its finance ministry accusing Washington of "undermining" the multilateral trading system and announcing fresh measures of its own.

Those tariffs come into effect Monday and see levies of 10 and 15 percent imposed on several US farm products.

Chicken, wheat, corn and cotton from the United States will now be subject to the higher charge.

Soybeans, sorghum, pork, beef, aquatic products, fruit, vegetables and dairy will face the slightly lower rate.

The tariffs will not apply to goods that left before March 10, however, as long as they arrive in China by April 12, according to AFP.

Analysts say Beijing's retaliatory tariffs are designed to hurt Trump's voter base while remaining restrained enough to allow room to hash out a trade deal.

The increasing trade headwinds add to difficulties faced by Chinese leaders currently seeking to stabilise the country's wavering economy.

Sluggish consumer spending, a prolonged debt crisis in the vast property sector and high youth unemployment are among the issues now facing policymakers.

Analysts say China's exports -- which last year reached record highs -- might not provide the same economic lifeline for Beijing as its trade war with Washington intensifies.

China announced tariffs on over $2.6 billion worth of Canadian agricultural and food products on Saturday, retaliating against levies Ottawa introduced in October and opening a new front in a trade war largely driven by U.S. President Donald Trump's tariff threats, Reuters reported.

The levies, announced by the commerce ministry and scheduled to take effect on March 20, match the 100% and 25% import duties Canada slapped on China-made electric vehicles and steel and aluminium products just over four months ago.

By excluding canola, which is also known as rapeseed, and was one of Canada's top exports to the world's No.1 agricultural importer prior to China investigating it for anti-dumping last year, Beijing may be keeping the door open for trade talks.

But the tariffs also serve as a warning shot, analysts say, with the Trump administration having signalled it could ease 25% import levies the White House is threatening Canada and Mexico with if they apply the same extra 20% duty he has slapped on Chinese goods over fentanyl flows.

"Canada's measures seriously violate World Trade Organization rules, constitute a typical act of protectionism and are discriminatory measures that severely harm China's legitimate rights and interests," the commerce ministry said in a statement, according to Reuters.

China will apply a 100% tariff to just over $1 billion of Canadian rapeseed oil, oil cakes and pea imports, and a 25% duty on $1.6 billion worth of Canadian aquatic products and pork.

"The timing may serve as a warning shot," said Dan Wang, China director at Eurasia Group in Singapore. "By striking now, China reminds Canada of the cost of aligning too closely with American trade policy."

"China's delayed response (to Ottawa's October tariffs) likely reflects both capacity constraints and strategic signalling," she added. "The commerce ministry is stretched thin, juggling trade disputes with the U.S. and European Union."

"Canada, a lower priority, had to wait its turn."

The Canadian embassy in Beijing did not immediately respond to a Reuters request for comment.

Canadian Prime Minister Justin Trudeau said in August that Ottawa was imposing the levies to counter what he called China's intentional state-directed policy of over-capacity, following the lead of the United States and European Union, both of which have also applied import levies to Chinese-made EVs.

In response, China in September launched an anti-dumping investigation into Canadian canola imports. More than half of Canada's canola exports go to China and the trade was worth $3.7 billion in 2023, according to the Canola Council of Canada.

"The investigation on Canadian canola is still ongoing. That canola was not included in the list of tariffs this time might also be a gesture to leave room for negotiations," said Rosa Wang, an analyst with agricultural consultancy JCI.

Beijing could also be hoping that a change in government in Ottawa makes it more amenable. Canada's next national election must be held by October 20.

China is Canada's second-largest trading partner, trailing far behind the United States. Canada exported $47 billion worth of goods to the world's second-largest economy in 2024, according to Chinese customs data.

China is Canada's third-most important pork export market. It takes products for which Canada does not have easy alternate markets, said Cam Dahl, General Manager of the Manitoba Pork Council.

“The things we export to China, heads for example, are parts of the animal that don’t have easy other markets," he said. "We can’t take that container that’s going to China and just ship it to Mexico.”

China is Canada's number-two market for canola, said Chris Davison, president and CEO of the Canola Council of Canada, Reuters reported.

"The (tariff) levels that are being talked about here are prohibitive levels, for sure. ... The impacts will be felt across the industry," he said, adding that he would like to see financial support from the government.

Canadian government spokespersons did not immediately respond to requests for comment.

"To be honest I don’t understand why they are doing this one at all," said Even Pay, agriculture analyst at Trivium China.

"I expect Beijing will use the election and change of leader as an opportunity to reset relations as they did with Australia," she added.

China in 2020 introduced a series of tariffs, bans and other restrictions on key Australian exports, including barley, wine, beef, coal, lobster and timber in retaliation to Canberra calling for a COVID origins probe.

Beijing did not begin lifting the bans until 2023, one year after Australian Prime Minister Anthony Albanese ousted Scott Morrison, who had called for the inquiry.

China has warned the US it is ready to fight "any type" of war after hitting back against President Donald Trump's mounting trade tariffs, BBC reported.

The world's top two economies have edged closer to a trade war after Trump slapped more tariffs on all Chinese goods. China quickly retaliated, imposing 10-15% tariffs on US farm products.

"If war is what the US wants, be it a tariff war, a trade war or any other type of war, we're ready to fight till the end," China's embassy said on X, reposting a line from a government statement on Tuesday.

It is some of the strongest rhetoric so far from China since Trump became president and comes as leaders gathered in Beijing for the annual National People's Congress.

On Wednesday, China's Premier Li Qiang announced that China would again boost its defence spending by 7.2% this year and warned that "changes unseen in a century were unfolding across the world at a faster pace." This increase was expected and matches the figure announced last year.

Leaders in Beijing are trying to send a message to people in China that they are confident the country's economy can grow, even with the threat of a trade war.

China has been keen to portray an image of being a stable, peaceful country in contrast to the US, which Beijing accuses of being embroiled in wars in the Middle East and Ukraine, according to BBC.

China may also hope to capitalize on Trump's actions relating to US allies such as Canada and Mexico, which have also been hit by tariffs, and will not want to ramp up the rhetoric too far to scare off potential new global partners.

The Premier's speech in Beijing on Wednesday emphasised that China would continue to open up and hoped to attract more foreign investment.

China has, in the past, emphasized that it is ready to go to war. Last October, President Xi called for troops to strengthen their preparedness for war as they held military drills around the self-governing island of Taiwan. But there is a difference between military preparedness and a readiness to go to war.

The Chinese embassy in Washington's post quoted a foreign ministry statement in English from the previous day, which also accused the US of blaming China for the influx of the drug fentanyl

"The fentanyl issue is a flimsy excuse to raise US tariffs on Chinese imports," the foreign ministry spokesperson said.

"Intimidation does not scare us. Bullying does not work on us. Pressuring, coercion or threats are not the right way of dealing with China," he added.

The US-China relationship is always one of the most contentious in the world. This post on X has been widely shared and could be used by the China hawks in Trump's cabinet as evidence that Beijing is Washington's biggest foreign policy and economic threat, BBC reported.

Officials in Beijing had been hopeful that US–China relations under Trump could get off to a more cordial start after he invited Xi to his inauguration. Trump also said the two leaders had "a great phone call" just a few days before he entered the White House.

There were reports that the two leaders were due to have another call last month. That did not happen.

Xi had already been battling persistently low consumption, a property crisis and unemployment.

China has pledged to pump billions of dollars into its ailing economy and its leaders unveiled the plan as thousands of delegates attend the National People's Congress, a rubber-stamp parliament, which passes decisions already made behind closed doors.

China has the world's second-largest military budget at $245bn but it is far smaller than that of the US. Beijing spends 1.6% of GDP on its military, far less than the US or Russia, according to the Stockholm International Peace Research Institute.

However, analysts believe China downplays how much it spends on defence.

Unseasonal rains have severely damaged physical infrastructure at Rasuwa and Tatopani, Nepal’s main customs checkpoints with China, leading to significant trade losses. According to the Nepal Himalayan Cross-Border Chamber of Commerce, floods have washed away roads and bridges, stranding imported goods. Around 300 to 400 containers remain stuck at Tatopani, while about 700 are stranded at Kerung. Even when the checkpoints were operational, 40 to 50 customs clearances remained incomplete daily.

Business owners have suffered heavy losses as perishable goods spoiled and items purchased on credit could not be sold on time. With prolonged delays, imported goods became more expensive, directly impacting consumers and reducing market activity. Consequently, businesses did not meet expected sales during the festive season. Additionally, export disruptions have affected national revenue and the livelihoods of workers dependent on the production of export goods. Despite these issues, the government has yet to devise short- or long-term strategies to ensure road connectivity after checkpoint blockages.

Repeatedly, disasters—including the 2015 earthquake and annual heavy rains—have disrupted these vital trade routes. Their geographic vulnerability to landslides and floods exacerbates the problem, with roads deteriorating every rainy season. However, the lack of durable infrastructure forces traders to rely on makeshift roads, posing significant risks. Reflecting on past conditions, former Industry Secretary Purushottam Ojha stated, “This did not happen before, but climate change has intensified floods and landslides. The government must adopt a strategic approach to maintaining supply chains considering climate change impacts.”

Every year, traders face financial losses due to supply delays caused by checkpoint blockages during the monsoon. Ahead of Dashain, they urged the government to invest in sustainable infrastructure, emphasizing the chronic lack of development at northern checkpoints. Nepal has 41 customs offices, of which only 28 to 29 operate regularly. The most rain-affected ones are the Rasuwa Customs Office in Timure, Rasuwa, and the Tatopani Customs Office in Larcha, Sindhupalchowk. According to Customs Department data, Rasuwa accounts for about four percent of Nepal’s total imports annually, while Tatopani handles around three percent. In the current fiscal year, Nepal’s total imports stood at Rs 988.58bn, with Rasuwa accounting for Rs 47.9bn and exports worth Rs 1.66bn. On average, Rasuwa contributes about one percent of Nepal’s total annual exports to China. Meanwhile, Tatopani recorded imports worth Rs 27.25bn in the first seven months of this fiscal year, though no exports have been reported so far.

Despite Tatopani’s significance as Nepal’s primary trade border with China, it perennially faces road infrastructure challenges. Floods and landslides frequently wash away the main road connecting Tatopani, forcing traders to transport goods at great risk. Business owners lament the government’s failure to conduct long-term repairs on the Barabise-Tatopani road. The route’s precarious location along the Bhotekoshi River, flanked by steep mountains, further heightens the risk of road collapses.

This recurring issue has worsened in recent years, especially during major festivals, leaving imported goods stranded for months. Such disruptions challenge the government’s revenue targets while raising business costs. Supply chain delays ultimately burden consumers with inflated prices.

Climate change has intensified extreme weather patterns, leading to increased incidents of floods and landslides that obstruct trade routes. Over the past three to four years, Nepal has experienced heavy rains from the monsoon through the festival season, worsening the situation at northern customs checkpoints. These unnatural floods have repeatedly collapsed roads and bridges, paralyzing trade.

Despite ongoing appeals, traders argue that the government has not prioritized road maintenance at Tatopani. This year, checkpoint blockages caused massive financial losses due to shipment delays. Kamlesh Kumar Agrawal, president of the Nepal Chambers of Commerce, highlighted the dire state of infrastructure, stating, “The northern border lacks proper infrastructure, and the temporary roads and bridges are inadequate due to natural disasters. This adds to traders’ expenses.”

Following a 26-day blockade during Dashain, traders met with the Commerce Minister to demand sustainable infrastructure development. Agrawal noted, “The government never outright rejects business concerns, but bureaucratic delays ultimately shift the burden onto consumers.”

Director General of Commerce Department of Xinjiang Autonomous Region of China, Chen Jung, and Consul General of Nepal in Lhasa, Laxmi Prasad Niraula, held a meeting today at latter's office.

During the meeting, they discussed various issues including relations between the two countries as well as business, commerce, transit, trade fair and trade facilitation committee meetings, according to the Consulate General of Nepal, in Lhasa.

Stating that the two countries have historic relations, Consul General Niraula extended gratitude for China's continuous support to Nepal.

He expressed the belief that Nepal will get such type of support in the days to come as well.

Lauding the role played by the Consulate General of Nepal to strengthen relations between the two countries, Director General Chen said China was always ready to support in strengthening relations between the two countries and in Nepal's development.

In the meeting, both sides agreed to further strengthen Nepal-China trade, commerce and transit sector as well as to take initiatives to export Nepal's agro products to China.

Similarly, commitments were made to take initiatives to resolve problems seen in checkpoints, developing physical infrastructures there, exchanging visits, participating trade fairs and festivals to be organized in both countries and moving ahead in a coordinative manner for people's welfare, added the Consulate General of Nepal.

Nepal and China have reaffirmed their commitment to the Belt and Road Initiative (BRI), highlighting the framework agreement signed during Prime Minister KP Sharma Oli’s visit to China in December last year. This development has been described as a milestone in enhancing bilateral ties.

In a political document presented to the Central Committee of his party, CPN-UML, Oli emphasized the significance of the agreement for Nepal-China relations. While the ruling coalition’s Nepali Congress (NC) has remained silent on the matter, China has actively engaged with Nepal’s political leadership to implement the agreement. Both Nepal’s Ambassador to China, Krishna Prasad Oli, and Chinese Ambassador to Nepal, Chen Song, have expressed optimism about the initiative, using strikingly similar rhetoric on its potential benefits.

A new era of cooperation

Ambassador Oli noted that the framework agreement marks a turning point in bilateral cooperation under the BRI, nearly seven years after the initial memorandum of understanding. He stated that projects under the BRI would help transform Nepal from a landlocked to a land-linked nation. Citing examples, he mentioned plans to enhance the operational capacity of Bhairahawa and Pokhara international airports.

A centerpiece of this cooperation is the proposed cross-border railway between Nepal and China, part of the Trans-Himalayan Multi-Dimensional Connectivity Network. This ambitious project is envisioned to facilitate the flow of goods, people and services, further deepening Nepal-China ties.

Ambassador Oli dismissed concerns over a so-called ‘debt trap’ linked to Chinese financing, calling such claims baseless. In an interview with The Global Times, he underscored the BRI’s global success, noting its partnerships with over 150 countries in its decade-long history.

Progress on infrastructure

Feasibility studies for the cross-border railway are underway and expected to conclude by 2026. Upon completion, the project will enter the implementation phase. Additionally, efforts are being made to strengthen Nepal’s transmission grid lines, which are critical for enhancing regional connectivity.

Ambassador Oli also expressed Nepal’s support for China’s Global Development Initiative and Global Civilization Initiative, reflecting broader alignment with Beijing’s strategic priorities.

According to Chinese official media outlets, Ambassador has said that Nepal supports the initiatives launched by China which were not mentioned in the bilateral documents.

In a meeting with Yang Wanming, President of the Chinese People’s Association for Friendship with Foreign Countries, according to The Global Times, Oli stated that Nepal supports the Global Development initiative and Global Civilization initiative proposed by China.  

China’s perspective

Chinese Ambassador Chen Song echoed the sentiments of deepening mutual trust and cooperation.

In an interview with The Global Times, he described the BRI framework agreement as a symbol of growing political and economic ties between the two nations.

According to Chen, the agreement will not only enhance bilateral relations but also contribute to regional stability and development by fostering collaboration between China and South Asian countries.

Chen highlighted the BRI’s role in strengthening people-to-people exchanges and cultural cooperation, particularly in the tourism sector, according to The Global Times.

Addressing debt-trap concerns

Ambassador Chen countered accusations of a ‘debt trap’, citing data from Nepal’s Public Debt Management Office. As of the 2023-24 fiscal year, Nepal’s external debt stood at Rs 1.25trn ($9.12bn). Of this, multilateral loans constituted 88.98 percent, while bilateral loans made up only 11.02 percent. Among bilateral creditors, Japan and India ranked first and second, with China accounting for a modest 2.82 percent of Nepal’s total external debt.

Chen criticized Western narratives about Chinese loans as attempts to discredit China’s partnerships with developing nations. He emphasized China’s commitment to offering low-interest loans, development assistance and investments tailored to Nepal’s needs.

Political dynamics

Domestically, the ruling UML has showcased the BRI framework agreement as a major achievement of Prime Minister Oli’s government. However, the NC has largely remained noncommittal, while the main opposition CPN (Maoist Center) has downplayed the agreement, seemingly to avoid crediting the Oli administration.

Meanwhile, China has intensified its engagement in Nepal, lobbying for further progress under the BRI framework. This proactive approach underscores Beijing’s strategic interest in Nepal as a critical partner in its broader Belt and Road vision.

In 2024, Nepal experienced significant turbulence both domestically and in foreign relations. In July, CPN-UML Chairperson KP Sharma Oli assumed the Office of the Prime Minister for the third time, supported by the largest party, Nepali Congress (NC). Despite forming a numerically strong government, the coalition has struggled to instill hope for stability. Doubts persist about the government’s longevity, despite leaders from both NC and UML insisting it will last until the 2027 national elections. Economically, Nepal’s struggles continued, showing little improvement. While external economic indicators improved slightly, domestic challenges remained unaddressed.

 Relations with China and the US remained stable, but ties with India deteriorated. Nepal’s engagement with long-standing development partners progressed steadily. The Oli administration promised economic reforms, improved service delivery, job creation, and fostering optimism among youth. Additionally, NC and UML pledged to amend the constitution based on lessons from its implementation. However, progress on these fronts remained limited.

Economic stagnation persisted, with some gains in the stock market overshadowed by poor revenue collection and low capital expenditure. The continued practice of last-minute expenditure resulted in inefficient investment and inflationary pressures. The real estate sector, a significant revenue source, remained in decline, with annual revenues dropping from Rs 70bn pre-covid to Rs. 46bn. In contrast, tourism rebounded robustly. Data from Nepal Tourism Board revealed that 1,104,702 tourists visited Nepal in 2024, returning the industry to pre-pandemic levels.

Despite these improvements, general pessimism grew as thousands of youths sought opportunities abroad for education and employment. Public services showed little improvement, leaving citizens disillusioned. Promised constitutional amendments remain stalled, with NC and UML yet to form the joint mechanism required to initiate the process. The government’s slow progress on its commitments is fostering doubts about its ability to deliver.

The coalition faced a major test in September when floods and landslides ravaged the country, causing over 250 deaths and infrastructural losses worth billions. While Prime Minister Oli attended the 79th United Nations General Assembly in New York, his administration’s inadequate disaster response undermined public trust. Effective coordination could have saved lives, but the government’s failure in crisis management became a defining moment of its tenure, eroding its credibility.

Domestically, the arrest of Rastriya Swatantra Party (RSP) President Rabi Lamichhane for alleged involvement in cooperative fraud, money laundering, and organized crime dominated headlines. Police filed charges in the Kaski district court, but opposition parties, including CPN (Maoist Center) and Lamichhane’s RSP, labeled the arrest politically motivated. Meanwhile, the government faced criticism for shielding NC and UML allies accused of corruption while targeting opposition leaders.

Within the ruling UML, former President Bidya Devi Bhandari’s return to active party politics sparked internal debate. Her participation in party programs signaled a comeback, with some leaders encouraging her involvement. The NC saw internal discussions on future leadership, with Shekhar Koirala campaigning for the presidency while the party President Sher Bahadur Deuba remained silent. NC General Secretary and president hopeful Gagan Kumar Thapa announced his candidacy, intensifying the contest. Similarly, the Maoist Center debated whether to reintegrate former Vice President Nanda Kishor Pun Pasang into its ranks.

Transitional justice saw a rare consensus among major parties on the need for a new bill, earning international praise. However, the government failed to appoint officials to transitional justice mechanisms, stalling progress. On the foreign front, Prime Minister Oli’s visit to China in December garnered significant attention. Marking a departure, he chose China for his first foreign visit, as he had in 2016 after awaiting considerable time for an invite from India. During the trip, Nepal signed a framework agreement for Belt and Road Initiative (BRI) cooperation, identifying 10 projects for implementation. China’s lobbying for swift action on these projects underscored its growing influence in Nepal.

Relations with India remained strained. Although bilateral engagements continued, Oli received no invitation to visit India. A notable achievement was a trilateral agreement among Nepal, India and Bangladesh to trade 40 MW electricity, allowing Nepal to sell electricity to a third country for the first time. Despite expectations of improved ties, relations between Oli and the Indian establishment remained lukewarm. Nepal’s relationship with the US remained stable as American officials visited Kathmandu to deepen engagement. However, the perception of US influence in Nepal’s domestic affairs continued to provoke mixed reactions.

Public sentiment grew increasingly pessimistic. Many youth believe the country’s trajectory will worsen, fueling frustration with major political parties. Anti-constitution forces have started gaining traction, exploiting public discontent. Despite their pledge to ensure stability, NC and UML face mounting skepticism about their ability to deliver meaningful change.

Writer and journalist Sudheer Sharma’s new book, Bhikshu, Byapar ra Bidroha, unveiled in August, offers a comprehensive account of the key figures, issues, and phenomena that have shaped Nepal-China relations. The book spans from the era of King Narendra Dev in the 7th century to 2008, when Nepal’s 240-year monarchy came to an end. Sharma’s other book, Himal Pari ko Huri, published simultaneously, explores new trends in bilateral relations post-2008, though this review focuses solely on Bhikshu, Byapar ra Bidroha.

In the introductory section, Sharma highlights a problem in Nepal’s public discourse about its northern neighbor. He identifies two contrasting perspectives: one group idolizes China and dismisses criticism, while the other harbors deep-seated prejudice. Sharma aims to provide an objective account of this trans-Himalayan relationship, presenting little-known historical facts and anecdotes. He maintains a neutral tone, avoiding personal biases in his analysis.

As a writer and journalist, Sharma excels in meticulous documentation, gathering new insights through his strong rapport with senior politicians and officials, and offering sharp political and geopolitical analysis. These strengths, evident in his acclaimed earlier work, Nepal Nexus, are similarly reflected in this book.

The book delves into the political, trade, cultural, and people-to-people relations between Nepal and China. Sharma credits King Narendra Dev and Princess Bhrikuti with laying the foundation of Nepal-China relations. He highlights the flourishing trade between Nepal and Tibet that began in the 7th century and thrived until the 1950s. Sharma also explores how this trade fostered robust people-to-people connections.

However, he documents the gradual decline of these ties after China took control of Tibet, imposed strict regulations on Nepali residents in Lhasa, and tightened visa rules. A study conducted by China in the late 1950s revealed that a Nepali shop in Lhasa, established a thousand years earlier, was still operational at the time. Three shops were found to be between 500 and 1,000 years old, and four others ranged from 200 to 500 years. Today, the number of Nepali shops in Lhasa has drastically declined, and Sharma notes that Nepal’s trade with Tibet—dating back 1,400 years to King Narendra Dev’s time—is nearing extinction.

In the chapter Bhikshu, Bidrohi, and Bampanthi, Sharma asserts that the foundation of Nepal-China relations is rooted more in cultural, religious, trade, and people-to-people ties than in political connections. He highlights the significant role played by Buddhist monks and nuns in fostering bilateral relations since ancient times. The chapter begins with a reference to an article by Chinese President Xi Jinping, published in Nepali newspapers, where Xi mentions the collaboration between the Chinese monk Fa Hien and Nepali monk Buddhabhadra over 1,600 years ago to translate Buddhist scriptures into Chinese.

Sharma also revisits the well-known narrative of Nepali Princess Bhrikuti’s marriage to Tibetan King Songtsen Gampo and mentions the Chinese monk Xuanzang (Huen Tsang), who visited Lumbini, the birthplace of the Buddha, leaving invaluable written accounts of his pilgrimage. This chapter offers a chronological account of Nepal-China engagements from the 7th century to the 1950s, demonstrating Sharma’s meticulous research and dedication to historical accuracy.

The chapter Mao and Mahendra provides a compelling overview of the relationship between Nepal’s monarchy and China, detailing personal connections between Nepal’s kings and Chinese leaders, which both sides leveraged for mutual benefit. For instance, Mahendra, as crown prince, secretly traveled to Beijing to meet Mao Zedong. The chapter includes several examples of the close proximity between the two sides.

Sharma discusses how the Communist Party of China (CPC) provided financial and other support to Nepal’s communist parties but refrained from supporting armed insurgencies, including the CPN-UML-led rebellion in Jhapa and the decade-long Maoist insurgency. Since the 1950s, China has consistently stated that it does not aim to export its revolution to Nepal. Although the CPC secretly offered financial aid to Nepal’s communist parties in the past, it never supplied arms or ammunition—a lesser-known aspect of Nepal-China relations.

Formal ties between the CPC and Nepal’s communist parties ended following King Mahendra’s royal coup. While China maintains that it does not export its revolution or ideology, Sharma highlights the irony that two major revolutions in Nepal—the Jhapa communist uprising and the Maoist insurgency—were launched in Mao Zedong’s name, despite receiving no Chinese support once they turned to armed struggle. Instead, the rebels were advised to join the political mainstream.

On the relationship between China and Nepali communist parties, Sharma writes: “China was always attracted to Nepal's communist parties due to two reasons: communism and nationalism. Communism is their shared ideology, and Nepal’s communist parties have viewed China as a protector of nationalism. This is why Nepal’s communist-led governments have historically maintained closer ties with China than other administrations.” He also discusses China’s changing approach to Nepal’s internal politics and its overt efforts to consolidate Nepal’s communist forces, suggesting that China may view Nepal’s communist parties as a potential substitute for the monarchy as a stable political institution.

The Khampa revolt is another major factor in Nepal-China relations. Sharma provides fresh insights into the Tibetan Khampas’ 18-year armed rebellion against China. According to the book, King Mahendra’s death marked a turning point for the Khampas, as his successor, King Birendra, adopted a less supportive stance. Following his state visit to China in 1973, King Birendra began military preparations to suppress the Khampas. Chinese Premier Zhou Enlai reportedly assured Birendra that the United States would not interfere, citing an agreement with President Nixon on the Tibetan issue. Upon returning to Nepal, Birendra initiated joint discussions with China on disarming the Khampas and began providing regular updates on their activities.

The book is a valuable resource for understanding Nepal’s diplomatic relationship with China. It examines key narratives, such as China’s policy shift after Nepal’s monarchy was abolished in 2008, its perception of Nepal as a gateway to India and South Asia, its primary concern with Tibet’s security, and its encouragement of Nepal’s communist parties as a reliable political force. However, critics may argue that while Sharma offers fresh insights and unearths historical documents, much of the book reiterates existing narratives about Nepal-China relations.

On Dec 5, Nepal and China signed the Framework for Belt and Road Cooperation (FBRC) during Prime Minister KP Sharma Oli’s visit to China. While both sides have refrained from disclosing the agreement’s full details, the government has repeatedly emphasized that Nepal is not obligated to take loans under the Belt and Road Initiative (BRI). However, this assurance has not fully dispelled concerns, as the exact modalities of financing remain unclear.

Under the agreement, Nepal’s Ministry of Foreign Affairs and China’s National Development and Reform Commission will act as the implementing agencies. It has been clarified that the BRI is not a bilateral treaty; rather, it will be governed by the laws of each participating country. Additionally, Nepal retains the option to collaborate with third countries in implementing the projects listed under the BRI.

The agreement refers to “aid financing,” a term that has sparked diverse interpretations. The ruling coalition insists that loans are not part of the arrangement, but the absence of concrete definitions leaves room for ambiguity. It is also unclear how this framework differs from the 2017 BRI agreement. Officials have revealed that 10 projects have been shortlisted under the BRI, ending years of speculation about its implementation in Nepal.

Chinese state news agency Xinhua offered some insights, citing the National Development and Reform Commission (NDRC). According to Xinhua, the agreement emphasizes the principles of planning together, building together, and benefiting together. It seeks to enhance cooperation in critical areas, including the economy, transportation, trade, and industrial development. The NDRC hailed the agreement as a step toward deepening political trust between Nepal and China and fostering high-quality Belt and Road collaboration.

In an interview with CGTN, Prime Minister Oli described the FBRC as a comprehensive umbrella agreement that encompasses diverse sectors such as infrastructure, culture, health, and education. He highlighted its potential to align Nepal’s development strategy with China’s, calling the agreement a significant milestone in bilateral cooperation.

Officials involved in the negotiations stated that the FBRC reflects Nepal’s proposals, with minimal changes from China. A previous draft implementation plan sent by China in 2020 had stalled due to Nepal’s indecision. In 2023, the Pushpa Kamal Dahal-led government came close to signing the plan, but the effort was abandoned at the last moment. Ahead of Oli’s visit, the Nepalese government formed a task force to revise the document, which ultimately produced the FBRC.

Semanta Dahal, a task force member, explained in an Onlinekhabar article that the Chinese draft resembled a broad agreement rather than a focused implementation plan. The FBRC, on the other hand, prioritizes economic and project development cooperation, retaining only the already-listed projects under the BRI. Dahal noted that a dedicated mechanism for future BRI discussions would be established soon.

The FBRC identifies 10 projects, providing clarity after years of uncertainty surrounding BRI’s implementation in Nepal. These projects include the Tokha-Chhare tunnel, the Hilsa-Simikot road, the Kimathanka-Khandbari road and bridge, the Keyrung-Kathmandu trans-border railway, Amargadhi City Hall, a 220kV transmission line, Madan Bhandari University, Kathmandu Scientific Center and Science Museum, the China-Nepal Industrial Park in Damak, and the Jhapa Sports and Athletics Complex.

Of these, the railway and tunnel projects are long-term endeavors requiring at least a decade to commence. Feasibility studies for these projects are underway with Chinese assistance. Negotiations for road projects are in progress, while the construction of the transmission line depends on a power trade agreement between the two countries. The remaining projects are relatively small, reinforcing Nepal’s cautious approach to avoid taking on large-scale loans under the BRI.

China has established mechanisms like the Silk Road Fund (SRF) and the Asian Infrastructure Investment Bank (AIIB) to support BRI initiatives. By mid-2023, the SRF had committed $22bn across 75 projects, while the AIIB, with 106 members, had approved $43.6bn for 227 projects globally. These initiatives span transport, energy, public health, and other sectors, promoting connectivity and sustainable development.

In recent years, China has shifted its focus toward smaller development projects that promise immediate returns. This approach reflects a growing reluctance to fund large infrastructure projects that lack financial viability. Consequently, Nepal and China have avoided selecting major projects under the BRI, except for the railway and tunnel.

The FBRC represents a cautious yet significant step in Nepal-China relations. While it marks progress in operationalizing the BRI, questions remain about financing and execution. The agreement signals Nepal’s intent to address its development needs without over-relying on debt. With ten projects identified and mechanisms for future negotiations in place, the FBRC lays the groundwork for collaboration, even as it underscores the challenges of aligning development ambitions with financial realities.

Prime Minister KP Sharma Oli’s first official visit to China on Dec 2-5 after assuming office in July has garnered significant attention both domestically and internationally. Central to discussions following the visit is China’s Belt and Road Initiative (BRI), which overshadowed other bilateral issues.

A key outcome of Oli’s visit was the signing of a Framework for Belt and Road Cooperation, marking progress in Nepal’s engagement with the BRI. For the first time, 10 specific projects under the BRI were identified. These projects are divided into two categories: long-term ventures like cross-border railways and tunnel projects, which require significant investment and time, and smaller, less capital-intensive initiatives.

To finance these projects, Nepal and China agreed on an “aid financing modality,” widely interpreted by economists as concessional loans. However, details of the agreement remain undisclosed, leaving even ruling parties unclear about the specifics. Prime Minister Oli has stated that Nepal will accept grants, not loans, under the BRI framework. Upon his return, he assured: “During negotiations, the issue of loans did not arise. Implementing specific projects may require separate discussions.”

The agreement represents a breakthrough in the ongoing narrative that BRI had stagnated in Nepal since the first framework agreement in 2017. Critics had attributed the delay to geopolitical factors, including external pressures. Following Nepal's endorsement of the US-backed Millennium Challenge Corporation (MCC) in 2022, China had been eager to advance the BRI, questioning why Nepal accepted the MCC but hesitated on the BRI. The new agreement allows China to showcase progress, countering claims of inactivity.

For Oli, the deal offers a political advantage. He faced pressure from within his party, particularly senior leaders like former President Bidya Devi Bhandari, to demonstrate progress on the BRI. The agreement has been welcomed by many leaders in Oli’s party, CPN-UML, and is likely to gain support from the CPN (Maoist Center) as well, though its Chair Pushpa Kamal Dahal may downplay the achievement.

The timing of the agreement is notable. In 2023, an implementation plan was nearly finalized under Dahal’s premiership, but he deferred the matter during his visit to China. Fringe communist parties, ideologically aligned with Beijing, have also expressed support for the deal. Notably, Oli’s previous tenure in 2016 saw the historic signing of the Transit and Transport Agreement with China to diversify Nepal’s trade and transit options, cementing his reputation as a leader seeking stronger ties with Beijing.

Foreign policy analysts argue that endorsing the BRI after the MCC helps Nepal maintain geopolitical balance. Internally, the deal has helped avert potential friction between the Nepali Congress (NC) and UML. Oli managed to secure Foreign Minister Arzu Rana Deuba’s backing, unlike Dahal, who failed to involve Narayan Kaji Shrestha from his party during earlier BRI discussions.

However, critics describe the agreement as more symbolic than substantive. The NC, a key coalition partner in the Oli-led government, has expressed concerns over its alignment with prior consensus. Former Foreign Minister NP Saud noted that the agreement contradicts the party’s stance to accept only grants under the BRI. He warned that this issue could escalate within the party. Similarly, NC leader Nain Singh Mahar stated that the deal diverges from the party’s position. The government is now under pressure to disclose the agreement's details to address these concerns.

Soon after his return, Oli met with a task force formed to build consensus between the NC and UML on the deal. The meeting aimed to preemptively address dissatisfaction within the coalition, as some NC leaders opposed to the BRI may leverage the issue politically.

Beyond the BRI, Oli’s visit emphasized implementing past agreements rather than signing new ones, aligning with long-standing Chinese priorities. While some expected Prime Minister Oli to negotiate a loan waiver for the Pokhara International Airport, he clarified that no such discussions occurred. Nine agreements were signed during the visit, accompanied by a joint press statement.

Chinese media highlighted the significance of Oli choosing China for his first bilateral visit. Hu Zhiyong, a researcher at the Shanghai Academy of Social Sciences, observed that this choice signals Nepal’s prioritization of ties with China. Qian Feng, from Tsinghua University’s National Strategy Institute, emphasized Nepal’s strategic importance in maintaining stability in Tibet and its growing role in BRI partnerships. Hu added that South Asian countries like Pakistan, Bangladesh, Sri Lanka, and the Maldives have benefited from BRI projects, and Nepal, too, seeks a share of this “big cake for cooperation.”

Prime Minister KP Sharma Oli has said Nepal-China relations were further strengthened with his recent China visit.

PM Oli said it while speaking at a news conference organized at Tribhuvan International Airport after he returned home from China, completing the four-day official visit today. The two-country relations were further strengthened, which benefits Nepal, he argued.

"Various agreements were made on the projects under the Belt and Road Initiative (BRI) during my visit, from which Nepal will reap utmost benefits," PM Oli reminded, adding that separate discussion and agreements would be made on each project.

The Head of the government also shared that Nepal and China signed the agreement on BRI cooperation framework in Beijing. The agreement was signed by Secretary at Foreign Ministry, Amrit Bahadur Rai, from Nepali side while the Vice Chair of the National Development and Reform Commission, Liu Sushe, from the Chinese side. 

The agreements were made in the program attended by PM Oli and his Chinese counterpart Li Qiang. Similarly, the both Prime Ministers signed the agreement on mutual assistance.

Some of the projects are on Tokha-Chhahare Tunnel Way construction, promotion of trade between Nepal and China, export of thermally processed buffalo meat from Nepal to China and exchange of certificates on completion of 9-story Durbar Square building by China. 

Also included in the agreement are on development projects, and economic and technological aid.

The discussions were held also on the issues like expansion of connectivity, development of industrial infrastructures, agriculture, trade, tourism, investment, science and technology, sports, natural disaster management, expansion of two-country relations at people-to-people level, and poverty alleviation.

Nepal will now be able to export thermally processed water buffalo meat to China. Officials of the two countries signed a protocol to facilitate water buffalo meat export to China during the China visit of Prime Minister KP Sharma Oli. This agreement is part of nine bilateral understandings reached between the two nations on Tuesday.

The protocol enables Nepali businesses to export cooked and processed water buffalo meat to China under Chinese guidelines. This follows the cabinet’s approval on June 30 of an agreement to export cooked buffalo meat to China.  Nepal and China held preliminary discussion on meat exports during former Prime Minister Pushpa Kamal Dahal’s China visit in September last year.

According to Global Times, China has beefed up efforts on the diversification of beef imports in 2024. This is expected to reduce market fluctuations due to over-reliance on any single market, while providing more opportunities for other countries through high-level opening-up.

Officials at the Ministry of Agriculture and Livestock Development say China’s General Administration of Customs (GACC) had provided Nepal with a 150-page document outlining stringent standards for meat imports. These include disease-free certification, hygiene standards and compliance with phytosanitary measures. Only the meat of water buffaloes under 30 months of age and raised under specified conditions will qualify for the export.

According to the MoALD, Nepal produces around 194,090 tons of water buffalo meat annually. Nepal’s water buffalo population is estimated at around 5.13m.

China, the largest importer of meat in the world, can be a lucrative export market for Nepal. The northern neighbor imported about 2.74m tons of beef in 2023, up 1.8 percent year-on-year, hitting a new high, according to Global Times. Imports over the first four months of 2023 stand at 1m tons, up 22 percent compared to the same period of 2023. It is difficult to get data on water buffalo meat consumption in China as Chinese customs import data categorise buffalo meat together with other cattle raised for meat under the category ‘meat of bovine animal’.

China mainly imports beef from countries including Brazil, Argentina and Uruguay. It recently lifted a ban on five Australian beef exporters as demand outpaces its domestic production.