17th Nepal-China (Tibet) Trade Fair on April 29

The 17th Nepal-China (Tibet) Economic and Trade Fair is going to be held in Kathmandu on April 29.

The trade fair is held every two years in one another country as per the agreement reached between the government of Nepal and the commerce department of the Tibet Autonomous Region of China in 1990.

According to the Trade and Export Promotion Center, the main objective of the fair is to further expand the bilateral economic and trade relations between Nepal and China (Tibet).

Around 125 businesspersons including a five-member high-level delegation will participate in the fair.  The official delegation will be led by the Vice Chair of the Tibet Autonomous Region Government of China, Long Fukuan.

There will be 50 exhibition stalls on behalf of China (Tibet) in the fair, including herbs, agricultural products, modern agricultural tools, tea, electrical appliances, household appliances, carpets, beverages, handicrafts, incense, two-wheelers, three-wheelers, four-wheelers, electric vehicles and beauty products.

Likewise, there will be 15 exhibition stalls on behalf of Nepal, including herbs, coffee, tea, handicrafts/carpentry, metalwork, carpet, pashmina and other products.

The fair will be open from 10 am to 6 pm and entry is free.

 

A great wall between the public and data

Located between China and India, Nepal ranks 108th out of 180 countries in the Transparency International’s corruption perceptions index (CPI), a very unenviable position compared to neighbors like Bhutan (26th), the Maldives (93rd) and India (93rd). What offers us a little bit of solace is a relatively better position than other neighbors, namely Sri Lanka (115th), Pakistan (133rd), Bangladesh (149th) and Afghanistan (162nd).

In my reading, a lack of transparency and open-access data policy is mainly to blame for a poor showing vis-a-vis CPI on the part of Nepal, which in 2015 became a federal secular democratic republic, a political order that is supposed to have democracy, transparency, and access to information at its core. 

Access to information is vital for a smooth operation of this political order because it helps not only to improve public service delivery but also increases public trust in government bodies. 

That is why the Constitution of Nepal has upheld the right to information (RTI), with Article 27 of the Charter declaring RTI as a fundamental right of every citizen of Nepal. 

With the aim of guaranteeing RTI, the government introduced the Right to Information Act 2007, set up a National Information Commission (NIC) in 2008, regarded as a very important step in promoting transparency and corruption in Nepal, and introduced some supporting rules in 2009. Section 4 of the Act has provisioned respect for and protection of the citizens’ right to information through classification and updation of information and dissemination of the same to the public, envisioning citizens’ ‘simple and easy’ access to information. Whereas Section 5 has a provision “to keep the information updated for at least 20 years.” 

Per the Act, both government and non-government entities must update information every three months and disclose the information even when the public does not seek it. 

Despite the open open-access data policy, none of the governmental entities (including the ministries), barring a few exceptions, have duly followed the RTI Act and other relevant rules. 

It is common for government officials to cover up corruption and malfeasance by hiding crucial information, including details of public officials' property, revenue losses, tax evasion and reports on suspicious financial transactions. 

Most of the government entities have appointed an information officer each for dissemination of information of public importance. But most of them are not very cooperative when it comes to providing data and dilly-dallying is quite common among them. 

This tendency to deny RTI is mainly due to 1) a culture of secrecy within government bodies, 2) lax implementation of RTI Act and its rules, and 3) no strict punishment for offices and personnel tasked with categorizing data and publishing them. 

It gives rise to some important questions: Are these entities functioning as per relevant rules and regulations? If  the officers have performed their tasks accordingly, then why are they hesitating to share data with the public?  

Does this unwillingness to share data reflect the concerned personnel’s vested interests? 

Whatever the reason behind this, correction measures should be taken and data made available to the people. In the absence of an open-access data policy and data-sharing mechanisms, it is impossible to verify whether the concerned personnel are discharging their duties in accordance with relevant laws or not. 

Following interventions are necessary to ensure the public’s easy access to data in Nepal: 

  • Strict implementation of RTI Act 2007 and its Rules 2009 
  • Implementation of new concepts in governance such as New Public Services and New Public Governance
  • Activities aimed at raising awareness among the public to seek data from both government and non-government entities 
  • Promotion of the culture of information dissemination and transparency through disruption of the culture of secrecy 
  • Comprehensive research on identifying the impediments to open-access data-sharing systems, ways to remove the hurdles and implement the identified correction measures 

 The author, a veterinary officer at the Department of Livestock Services, is a graduate of the University of Cambridge

Trust thy neighbors more

Over the past few years, China has achieved political, economic and diplomatic feats. No apparent observation, perhaps, can emasculate China’s global march—it is rising so gracefully, smoothly and enormously. China is most likely to grow from being a superpower to a mega-power. But in the evolving international system, it is anticipated to play rational, responsible and equable roles.

The most sensible foreign policy course of action for Nepal at this point of unparalleled rise of its immediate neighbor would be to strategically align with it by building mutual trust, while maintaining a delicate balance with another neighbor. Nonetheless, Nepal ought to maintain a pragmatic economic and security framework through increased mutual trust, strategic partnerships and technological cooperation with both the neighbors. Nepal’s economic, developmental and security architecture, despite many geopolitical challenges, should be guided by a sensible geopolitical assessment and wider techno-economic cooperation with immediate neighbors and other powers.

 

Is Nepal already in a geopolitical trap?

Over the past few years, Nepal has found itself in the midst of a tug-of-war among three major global powers: India, China, and the US. Each of these countries are vying for influence in Nepal’s economic, military, ideological and technological spheres.

Let’s begin with the US. The Biden administration in the US has made advancing democracy one of its key global priorities. In South Asia, Nepal appears to be in the high priority of the US democracy projects. The US has been inviting Nepal’s prime minister to its annual democracy summit. Both communist and non-communist prime ministers have attended the summit. The US is making efforts to counterbalance the influence of the Chinese Communist Party in Nepal and uphold democratic values in the region. In the meantime, the US is equally concerned about the influence of India’s Bharatiya Janata Party (BJP) which is pushing for the restoration of Hindu state in Nepal. A US document says: “The Nepali political class’s penchant for balancing relations with its large neighbors India and the People’s Republic of China (PRC) renders security cooperation, including with the United States, prone to political interference.” 

Despite claims that it does not export its communist ideology, China has been promoting its political model in other countries. Under the guise of showcasing its achievements, China has been exporting its ideology to South Asian countries. Chinese leaders are urging their Nepali counterparts, particularly those aligned with the communist ideology, to embrace the Chinese model. Every year, China invites a large number of Nepali communist leaders to its cities to showcase its development model. Of late, Nepali leaders have started saying that Nepal can replicate the same model which reflects a growing acceptance of the Chinese  model within the country.

Though India and the US are on similar pages on a range of issues, the two powers have divergent views about the democratic values in South Asia. India, on its part, is sending conflicting signals on the ideological front. While the Indian government seems committed to uphold democracy, secularism and inclusive constitution in Nepal, the ruling BJP harbors reservations about Nepal’s 2015 constitution, which, it perceives, is imbued with Western values. The BJP’s parent organization, the Rashtriya Swayamsevak Sangh, is reaching out across the political parties and the general people with Hindu-centric agendas. The BJP believes it can reduce Western influence on Nepal, dismantle secularism and restore Hindus state through such activities. Such activities are already polarizing Nepal’s political fabric.

In addition to ideological battles, Nepal is grappling with strategic challenges posed by major powers. China’s Belt and Road Initiative (BRI) and its insistence on the One China policy dominate all its engagements with Nepal. Likewise, China’s Global Security Initiatives (GSI) and Global Civilizational Initiatives (GCI) and Global Development initiative (GDI) are getting more prominence over economic issues. Nepal has consistently expressed its commitment to One China policy for over 50 years now. Still, China does not seem convinced and seeks reaffirmation on One China policy every time.

 

A press statement issued after Prime Minister Pushpa Kamal Dahal's visit to China last September also reiterated Nepal's firm stance against Taiwan Independence. His new Foreign Minister Narayan Kaji Shrestha echoed the same sentiment during his visit to China last month. Although China keeps emphasizing on the Belt and Road Initiative (BRI) in various meetings, tangible progress on infrastructure development under the BRI umbrella has not materialized yet. Government officials, politicians, and foreign policy analysts say that Nepal needs to capitalize on China's economic growth. However, this aspiration has yet to materialize due to the significant focus that both countries are placing on strategic concerns.

While Chinese investment in Nepal is on the rise and cooperation between the two nations has expanded in recent years, substantial investment projects that could catalyze economic growth remain elusive. Instead, Nepal’s attention is primarily directed towards ensuring that its territory is not used for anti-China activities. Regarding Chinese investment in Nepal, there have been occasional complaints from the Chinese side regarding obstacles faced by its investors.

Nepal engaged in a four-year debate on whether to accept the $500m support from the Millennium Challenge Corporation (MCC) of the US government. The MCC projects are finally into implementation. However, the project is not gaining the desired pace. Many attribute the slow progress to the government’s lackluster commitment to these projects. This tepid response was partly influenced by China’s strong opposition to the projects which labeled it as part of the Indo-Pacific Strategy (IPS). Nepali politicians, bureaucrats and experts continue to struggle in comprehending the US policy towards Nepal in the context of the IPS. Following discussions on the IPS, attention in Nepal shifted on the State Partnership Program (SPP) of the US government.

Under domestic pressure, the government led by Sher Bahadur Deuba of the Nepali Congress wrote a letter to the US government stating that Nepal won’t be a part of the SPP. Of late, there has been a notable increase in interest from US investors looking to invest in Nepal. However, Nepal has yet to effectively address this interest despite a substantial increase in US assistance through USAID.

All this shows that Nepal has already fallen into the geopolitical trap. Nepal is not seeing much investments in priority sectors as major powers are prioritizing their security and strategic interests. Though Nepal is pushing for more economic collaborations, strategic issues are dominating the bilateral negotiations and public discourse. Nepal’s current key priorities are economic recovery, minimizing the impacts of climate change and creating jobs but due to the geopolitical tensions these issues are getting a backseat in the engagement with major powers.

Nepal has struggled to take a clear stance on initiatives like the IPS, BRI, and other strategic endeavors. While managing these challenges should be the top priority of the government, the country is marred by internal political instability. Geopolitics is gradually creating rifts within Nepali society. Nepal needs to make concerted efforts to mitigate internal divisions and chart a path forward that safeguards Nepal’s interests amidst global power struggles.

MPs demand prompt resumption of Nepal-China transits points closed after pandemic

Lawmakers have demanded the prompt resumption of Nepal-China transit points closed with the outbreak of the COVID-19 pandemic.

Airing views in the 'zero hour' of the House of Representatives (HoR) meeting today, NC lawmaker Dilendra Prasad Badu expressed satisfaction over the reports that during Deputy Prime Minister and Foreign Minister Narayan Kaji Shrestha's recent visit to China, the two sides exchanged views on reopening the transit points along the Nepal-China border including Tinker in Darchula.

He said during the Prime Minister's China visit in the past, it was reported that the transit points would be resumed but this has not happened so far. "The Foreign Minister should clarify it," he asserted.

Thakur Prasad Gaire of CPN-UML urged the government to conserve Palpa's historic Rani Mahal (Palace) while Tara Lama Tamang demanded grants to sugarcane farmers.

Pradip Paudel of Nepali Congress drew the government's attention towards the issue of the server down in Tribhuvan International Airport. It was Badri Pandey from the same party who expressed his concerns over problems being faced by Bajura people in the aftermath of a landslide and a delay in constructing a bridge in Martadi. 

Devendra Poudel of CPN (Maoist Center) urged the government to establish the administration office at Galkot of Baglung to provide government services near to the locality of people who face challenges to visit the district headquarters to acquire administrative services.

Dhawal Shumsher JB Rana, Basudev Ghimire, Bindhyabasini Kansakar, Tejulal Chaudhary, Damodar Poudel Bairagi, Durga Rai, Pradip Yadav, Prabhu Hajara, Binita Kathayat, Dhruba Bahadur Pradhan, Nagina Yadav, Nirmala Koirala, Narayan Prasad Acharya, Nisha Dangi, Purna Bahadur Gharti Magar, Pratima Gautam, Pratiksha Mukhiya, Dikpal Kumari Shahi, Deepak Giri, Deepa Sharma and Dr Toshima Karki raised contemporary issues.

 

Nepal-China relationship under new coalition in Kathmandu

Deputy Prime Minister and Minister for Foreign Affairs Narayan Kaji Shrestha is paying an official visit to China from March 24 to April 1 at the invitation of his Chinese counterpart Wang Yi.

This visit marks the first significant diplomatic engagement by a senior minister since the formation of a new coalition government on March 4. Shrestha’s transition from the home ministry to the foreign affairs portfolio underscores the shifting dynamics within the government. In addition to bilateral discussions with his Chinese counterpart, Shrestha, a prominent Maoist leader, is scheduled to hold meetings with top officials and leaders of the Chinese Communist Party.

Given lingering suspicions and allegations surrounding China’s role in orchestrating the recent political realignment in Nepal, Shrestha’s visit carries considerable significance domestically and internationally. Despite assertions from ruling alliance leaders that the coalition shift was driven solely by internal factors, doubts persist regarding China's influence.

Notably, Shrestha’s departure for China lacked comprehensive briefings from all ministry departments, raising questions about preparedness amidst heightened Chinese pressure to advance the Belt and Road Initiative (BRI) agenda. 

During Prime Minister Dahal’s China visit last year, preparations were made to sign the BRI implementation agreement. But it was put off after Nepal sought some more time, citing the need for further homework. China has been pushing Nepal for BRI implementation, especially after Nepal ratified the US government’s Millennium Challenge Corporation (MCC) grant agreement.

While Shrestha has publicly advocated for prompt BRI implementation, the Dahal-led government has yet to reach a consensus on the matter, indicating a reluctance to hastily commit to China's initiatives. Even though Shrestha has said that implementation of past agreements remains the top agenda of his China visit,  highly placed government sources say the possibility of Nepal signing the BRI implementation agreement is very low. 

Nepal reportedly had proposed nine infrastructure projects under the BRI, but there has been no progress. 

Although Nepal signed the BRI framework agreement with China in 2017, no infrastructure project has moved forward so far. Of late, China has been trying to bring all areas of cooperation with Nepal under the BRI framework. Controversy has also arisen over China’s unilateral designation of Pokhara International Airport as a BRI project, exacerbating anxieties regarding debt sustainability. With the multi-million-dollar airport still unable to see international flights, there are concerns over how Nepal will repay the Chinese loan. 

Prime Minister Dahal has been urging the Chinese side to convert a significant portion, if not all, of the loan into a grant. He told a gathering in Pokhara a few days ago that efforts were underway to convince China on this matter. Dahal’s appeal for converting Chinese loans into grants reflects Nepal's growing apprehension towards accumulating debt, particularly in light of unfulfilled BRI promises and economic viability concerns.

The prime minister believes that if China converts the loan into a grant and makes it a gift project under the BRI, it would facilitate the BRI implementation agreement. China does not provide grants under the BRI, but the Chinese government could make such a decision if it desires. However, the Chinese side has not given a concrete response. 

Earlier last week, the Chinese Embassy in Kathmandu clarified that the Pokhara airport loan is not a noose around Nepal’s neck. It stated that Nepal’s external debt is higher from international institutions and other countries. China has expressed its willingness to bring international flights to Pokhara but has urged Nepal to provide new air routes for this purpose.

Previously, when the Nepali Congress was part of the ruling alliance, Prime Minister Dahal and other communist parties felt that relations with China were given low priority. China’s proactive engagement following the coalition reshuffle suggests a concerted effort to solidify ties with Nepal’s communist-led government. The absence of contentious issues such as the Nepal-China border dispute in the new alliance’s policy agenda signals an apparent alignment with Chinese interests, prompting optimism in Beijing regarding future cooperation.

Chinese activities seem to have increased in Nepal significantly following the formation of the new alliance. In the past, China has been slow to react to changes in government in Nepal. But this time, it issued a response soon after the new alliance was formed.

During her regular press briefing on March 4, Chinese Foreign Ministry spokesperson Mao Ning said: “We would like to work with the new government to uphold the Five Principles of Peaceful Coexistence, deepen traditional friendship, strengthen practical cooperation, advance the China-Nepal strategic partnership of cooperation featuring everlasting friendship for development and prosperity, and deliver more benefits to the peoples of the two countries.”

Two days later, Chinese Ambassador to Nepal Chen Song met with Foreign Minister Shrestha to extend congratulations and engage in in-depth and friendly discussions on bilateral relations and cooperation.

Vice-minister of the Chinese Communist Party Sun Haiyan also held talks with Nepali Ambassador to China Bishnu Pukar Shrestha right after the new alliance was formed.

During the meeting, she sought information about the recent political developments in Nepal. Vice-minister Haiyan had visited Nepal last month leading a delegation of the International Liaison Department of the Communist Party of China. During her interactions with Nepali political parties, she had remarked that efforts were being made to undermine Nepal-China relations.

Similarly, Lin Jian, a Chinese foreign affairs spokesperson, on March 22, reacted to Shrestha’s visit. In a regular press briefing in Beijing, he said: “The upcoming visit will be [Shrestha’s] first overseas visit after taking office as Nepal’s deputy prime minister and minister for foreign affairs.”

“China stands ready to work with Nepal to take this visit as an opportunity to further deliver on the important common understandings between leaders of the two countries, deepen political mutual trust, pursue high-quality Belt and Road cooperation, expand exchanges and cooperation in various areas and strive for new progress in building China-Nepal strategic partnership of cooperation featuring ever-lasting friendship for development and prosperity,” Lin said.

He added that China and Nepal were “traditional friends and neighbors linked by mountains and rivers. In recent years, our two countries maintained close high-level exchanges with deepening practical cooperation in various fields”. “Our two sides maintained close coordination and collaboration in regional and international affairs.”

Last September, Prime Minister Dahal paid an official visit to China and leaders of the two countries reached important common understandings on growing the China-Nepal relations.”  China expects its security concerns to be somewhat addressed under the communist government in Nepal, which is why Beijing appears more enthusiastic about the new alliance. Additionally, the Dahal-led government has fully banned activities concerning the free Tibet movement in Nepal. 

However, challenges persist in reconciling Nepal’s commitment to an independent foreign policy with the demands of regional stakeholders, particularly amid growing pressure to navigate competing geopolitical interests. Prime Minister Dahal’s emphasis on adopting a balanced diplomatic approach underscores the delicate balancing act facing Nepal’s leadership as it seeks to assert its autonomy while fostering fruitful relationships with key allies.

Nepal asks China to convert PIA loan into grant

Prime Minister Pushpa Kamal Dahal announced that diplomatic efforts have been initiated with China to convert a loan for Pokhara International Airport to a grant as it failed to garner income, instead piled up more debt.

This came after opposition lawmaker Chanda Chaudhary raised questions about the increasing loss and piling debt, Nepal Prime Minister said that talks are underway to convert the loan into a grant.

“In order to operate the flights to and from the Pokhara International Airport, a committee has already been formed to study government-private sector cooperation. On the basis of the report prepared by the committee, necessary preparations would be made for the operation of the airport. The loan acquired for the construction of Pokhara International Airport, diplomatic talks are underway to convert it into a grant. Necessary coordination would be made for all the necessary financial management,” PM Dahal said.

The Pokhara International Airport, opened on 1 Jan 2023, hasn’t seen any frequent international flights except for chartered Chinese flights, which appear on rare occasions.

On 21 March 2016, Nepal and China reached a loan agreement stipulating a total loan amount of 1.37bn Chinese yuan, out of which 355.9m Chinese yuan were constituted as interest-free-loans. The Civil Aviation Authority of Nepal (CAAN), the aviation regulating body of the Himalayan nation, is responsible for paying the loan amount by the year 2036.

Earlier, Nepal PM Dahal, upon returning to Kathmandu last year after his visit to China, announced that Chinese flights would come to Pokhara, helping to cover the loss.

While no such flights have commenced, the Prime Minister, referring to the visit, claimed, "During my recent visit to China (22 Sept 2023), a theoretical agreement was reached about commencing connecting flights from various cities of China to Pokhara, and I believe that international flights would land at Pokhara International Airport and help recover the loss.”

Days before the inauguration of the airport last year, the Chinese Ambassador to Nepal claimed in a tweet that the airport was a part of the Belt and Road Initiative (BRI) which was rejected by the Nepal Government.

But soon after the handover, the Pokhara airport exemplified the perils that came with importing China’s infrastructure-at-any-cost development model, disproportionately benefiting Chinese firms at the expense of the borrowing nation.

China CAMC Engineering, the construction division of state-owned conglomerate Sinomach, played a pivotal role in the Pokhara airport project. It imported building materials and machinery from China, and the airport itself was brimming with Chinese-made security and industrial technology. Despite China’s claims about the project’s quality, an investigation by The New York Times revealed an unsettling narrative.

Multiple individuals involved in the project and a thorough examination of thousands of documents indicated that China CAMC Engineering had consistently dictated terms to maximize profits and protect its interests. Simultaneously, it systematically dismantled Nepali oversight.

As a consequence, Nepal found itself entangled in significant debt to Chinese creditors without the expected influx of passengers to repay the loans.

The Finance Ministry of the Himalayan nation had signed a memorandum of understanding supporting CAMC’s proposal in 2011, even before an official bidding process had started. The Chinese loan agreement exclusively allowed Chinese firms to bid for the project.

CAMC initially submitted a bid for $305m, nearly double Nepal’s cost estimate

for the airport. This drew criticism from Nepali politicians, who accused the process of being rigged and the price inflated. Following the outcry, CAMC lowered its bid to $216m, reducing the cost by approximately 30 percent.

In 2016, China and Nepal formalized a 20-year agreement for the project, with a quarter of the funding provided as an interest-free loan. Nepal intended to borrow the remainder from China’s Export-Import Bank at a two percent interest rate.

As construction progressed, glaring issues came to light. The Civil Aviation Authority of Nepal was responsible for overseeing the Chinese contractor, but the lack of experienced personnel, combined with the inadequate allocation of funds for consultants, hampered the project.

A pivot balancing three great powers

Nepal’s strategic location between two major powers, India and China, makes it a crucial player in the geopolitical dynamics of the region and beyond. The country’s location between the two rising, competing and conflicting powers of Asia (China and India) makes it important for Western powers to strike a strategic balancing act in the region. In this situation, Nepal’s strategic location between two of the emerging countries of Asia makes it imperative for the US to launch a regional maneuver. 

In addition, the US and India maintain strategic relationships in the Asia-Pacific region and Quadrilateral Security Dialogue (QUAD). Global power is shifting toward the Asia-Pacific region with strategic bipolarity between the US and China creating several implications for the global order. These developments indicate that the US-led ‘unipolar world’ may not last last long, making way for a multipolar world with China as one of the power centers. 
In recent years, increased cooperation between India and the US through Washington, DC-led projects like the Millennium Challenge Corporation (MCC) is being seen as a counter to China’s BRI in Nepal. China’s debt-based approach to BRI raises concern about the impact of it on the stability and sovereignty of recipient nations, including Nepal. At the same time, MCC has made significant progress within a short span of time, particularly in Nepal’s energy sector, whereas none of the Chinese projects that Nepal signed under BRI in 2017 have materialized/progressed. 

The US believes China’s BRI project is not just an economic initiative but also a geopolitical one and is part of China’s border strategy to expand as well as deepen its global influence. It believes that one of the primary goals of BRI is to export Chinese development and influence, particularly in the developing world. The US-China bipolar strategic rivalry shows that both powers are in a race to influence each other’s ‘regions’. In this situation, the US strategic entry into Nepal and intense rivalry between BRI and MCC projects are reflective of these two countries’ growing competition in world politics.

China views a growing American role in Nepal’s development in recent years as a threat to its presence in the region. Historically, Nepal’s strategic location has shaped Beijing’s delicate balancing act. 

On its part, Nepal presents a range of opportunities for both India and the US, including ensuring stability and security, facilitating economic growth and promoting democratic values. Both countries have also collaborated on advancing Nepal’s legal system, protecting human rights, promoting gender equality and countering Chinese misinformation. Thus, strategic cooperation between India and the US has fostered sufficient trust to see no significant opposition from India regarding the US-led diplomatic efforts in Nepal. All in all, shared interests of India and the US in Nepal provide a strong foundation for cooperation and coordination between the parties involved. 

China has come up with three new initiatives—Global Security Initiative (GSI), Global Development Initiative (GDI) and Global Civilizational Initiative (GCI), which, per Chinese officials, fall under the BRI umbrella. These initiatives, according to the officials, aim to eliminate the root cause of international conflicts, encourage joint international efforts to bring more stability, improve global security governance and promote durable peace and development in the world. But Nepal has reportedly conveyed its unwillingness to join GSI due to risks of data security, unequal distribution of benefits, looming economic dependence, transparency and debt risks. China’s BRI was also seen optimistically initially, but there has been no progress in the past five years even after signing of an MoU with the strategic community seeing a risky amount of debt and a way for Beijing to use its debt leverage to pursue ambitious strategic plans in Nepal. Though 35 projects were originally identified under BRI, Nepal later brought them down to nine. Still, no government in Nepal has committed to moving ahead with these projects due to “concerns over unclear financial terms of Chinese loans”. 

According to diplomats, the Nepal-US relationship is entering a new phase. The US has three distinct interests in Nepal: Political, economic and strategic/military. In terms of strategy, Nepal’s geopolitical location as a gateway for emerging global powers India and China has shaped US interest in Nepal. Different aid programs and a series of high-level visits in recent years are a clear-enough indication of increasing American engagement in Nepal.
Given this context, Nepal must pragmatically balance competing objectives of India, China and the US to advance national interest and priorities. But our governments have largely failed to take timely decisions and initiatives for national development as well as economic upliftment.

The US’ shifting policy toward Nepal is understood as part of the current global power transition. In Nepal, the US-China rivalry has become more visible over the last few years, presenting a great challenge of taking both MCC and BRI together, and balancing the interest of prevailing superpower and emerging superpowers.

 

Views are personal

China's economic development can also benefit Nepal: Experts

Experts claimed that neighboring China's economic development can also benefit Nepal.

At an interaction 'China's Economic Development and New Opportunities for Neighboring Countries' organized by China Media Group and co-organized by Nepal-China Youth Friendship Association here on Wednesday, the speakers said that China's economic development will benefit other neighboring countries.

On the occasion, former Nepali Ambassador to China Leelamani Poudyal said China's economic policy would have an impact in the world.

He said Nepal could benefit from stability and economic development in China. "China's economic policy during the global recession in 2008 had helped the world economy," he said.

Diplomat Hiranya Lal Shrestha said China has made great strides in economic development in a short span of time. He said the visit of Chinese President Xi Jinping to Nepal has given some hope for Nepal's development.

Wang Xin, representative of the Chinese Embassy in Nepal, said China's economy has been able to take a leap due to rapid industrialization development and research. He also claimed that China contributed 42 per cent to the global economy in 2023.

President of the Federation of Export Entrepreneurs Shankar Pandey, Chairman of Nepal-China Cultural and Educational Council Dr Harish Chandra Shah, Chairman of World Cultural Net Deepak Sarkar, General Secretary of Nepal Himalayan Cross-Border Commerce Association Ram Chandra Parajuli, Secretary of China Study Center Prakash Babu Poudel, among others, said Nepal-China relations have not developed as they should have been.

Chief of China Media Group, South Asia Bureau Zhang Yue and President of Nepal-China Youth Friendship Association Bishnu Sapkota stressed the need to work for Nepal's development by removing the confusion among the people about Nepal-China relations.

Ready to work with left govt in Kathmandu: Beijing

China has said that it is ready to work with the new government in Kathmandu to advance the China-Nepal Strategic partnership of cooperation featuring ever-lasting friendship for development and prosperity, and to deliver more benefits to the people of the two countries.

On March 8, four parties– CPN(Maoist), CPN-UML, Rastriya Swatantra Party and Janata Samajbadi Party- formed a new left government. Speaking in a regular press briefing at the Ministry of Foreign Affairs Spokesperson Mao Ning said: China noted that Nepal has formed a new government coalition and reshuffled the cabinet recently. We sincerely hope that relevant parties of Nepal will work together in solidarity, advance the work related to the formation of the new government in a smooth manner, and realize political stability, economic growth and improvement of people’s livelihood.”

She further said that  as a friendly neighbor and cooperation partner, China highly values its relations with Nepal. We would like to work with the new government to uphold the Five Principles of Peaceful Coexistence, deepen our traditional friendship, and strengthen practical cooperation. China has become the first country to make an official comment about the formation of a new alliance in Kathmandu. For the long time, China is motivating Nepal’s communist parties to form an alliance and government. China prefers a communist government in Kathmandu in order to fulfill its interests.  

 

China commits USD 490,000 to support WTO accessions and least-developed countries

The Government of China has pledged USD 490,000 to the WTO's Least-Developed Countries (LDCs) and Accessions Programme (also known as the China Programme). The China Programme — initiated in July 2011 under the WTO’s Aid for Trade initiative — aims to enable LDCs to better integrate into the global economy by strengthening their participation in WTO activities and helping those not yet members join the organization.

WTO Director-General Ngozi Okonjo-Iweala and China's Minister of Commerce Wang Wentao signed the renewal of the Programme's Memorandum of Understanding (MoU) on the eve of the 13th WTO Ministerial Conference (MC13) to be held in Abu Dhabi on 26-29 February. 

The Government of China and the WTO review the contents and consider the extension of the MoU on an annual basis. The China Programme provides financing to support:

  • WTO accessions internships
  • WTO accessions round table meetings
  • LDCs' participation in WTO meetings
  • South-South Dialogue on LDCs and Development
  • LDCs' Trade Policy Review follow-up workshops 
  • LDCs' Experience Sharing Programme 

This has also contributed to facilitating the participation of LDC delegations in WTO ministerial conferences. 

More information can be found here.

WTO Director-General Ngozi Okonjo-Iweala said: "I welcome this new contribution by China, which will contribute to facilitating the accession of LDCs to the WTO and to supporting their participation in the global economy. This important contribution once again demonstrates China's consistent  commitment to the objective of promoting LDCs' development and trade integration, as well as its solid support for the Aid for Trade initiative of the WTO." 

Minister Wang said: "Empathizing with the acceding countries, China has been taking every solid step possible to help the countries in need. The China Programme, initiated in 2011, funds internships and LDCs' participation in WTO sessions and holds activities, such as Trade Policy Review (TPR) follow-up workshops and South-South dialogues, to help LDCs and developing members prepare a talent pool familiar with WTO rules, strengthen policy coordination, and better integrate into the multilateral trading system. In the past dozen or so years, the China Programme has achieved a lot, helping eight LDCs join the WTO."

Since 2008, China has contributed US$ 8.89 million to assist developing members and observers, especially LDCs, to integrate into the multilateral trading system.

Dissecting the Mandarin mindset: A shift in China’s approach vis-a-vis Nepal

Vice-minister of the International Department of the Communist Party of China (CPCID), Sun Haiyan, visited Nepal in the last week of Jan 2024. During her four-day visit, she engaged in meaningful discussions with the leaders of major political parties, raising various aspects of bilateral relations.

In contrast to previous visits by Chinese delegations, Sun’s visit garnered significant attention from the Nepali government and political parties. It served as a platform to address long-standing issues that had remained unattended. By bringing these matters into open discussion, she actively sought suggestions and recommendations from prominent Nepali parties to chart the future course of Nepal-China relations. Her expressed desire was to elevate the bilateral ties to a new level, fostering mutual trust and respect.

Undoubtedly, Nepal seeks to maintain positive and neighborly relations with both China and India, with all major political parties prioritizing these two nations in their foreign relations. The adherence to the ‘one-China’ policy remains a longstanding and principled position for Nepal, dating back to the 1950s. Furthermore, Nepal is unequivocal in its commitment to preventing the use of its territory against China by any third country or non-state actors. 

Against this backdrop, the Nepal-China relationship appears generally normal and warm, with occasional minor irritants arising from misunderstandings and miscalculations. However, Madam Sun’s statements go beyond addressing these issues and are directed at external narratives that she believes some sections of Nepali society are adopting and endorsing. It is evident that Sun’s remarks aim to dismiss misconceptions and reinforce the importance of a robust and positive relationship between Nepal and China, urging a deeper understanding of shared values and mutual benefits that underpin their diplomatic ties.

Certainly, it’s essential to consider the broader geopolitical landscape when analyzing her statement and the concerns voiced by other Chinese leaders during their recent visits to Nepal. A significant factor in this context is the global positioning of China and the US policy of ‘containment’, particularly evident in the Indo-Pacific region encompassing the heartland and rimland.

Let’s delve into Vice-minister Sun’s statement and the concerns she expressed during her visit to Nepal. In her statement, she pointed out that some countries are actively working to destabilize the robust relations between Nepal and China, while also highlighting attempts to tarnish the reputation of the Belt and Road Initiative, often labeled as a ‘debt trap’. The underlying context of her statement revolves around the global power struggle, where China leads one axis, and the US leads another. The ideological differences between a socialist China and a capitalist US have contributed to conflicting relations that have, to a significant extent, divided the world’s nations and populations.

Chinese leaders, as articulated in their statements, have made it clear that they will not tolerate any attempts by the US and its Western bloc allies to set the stage against China. This geopolitical backdrop forms the nucleus of Vice-minister Sun Haiyan’s concerns, highlighting the complexities and tensions arising from the broader global power dynamics between the two major players, China and the US. The fact that Nepal has initiated steps to implement the MCC project, involving a substantial grant from the US, while progress on BRI projects remains in the consultation phase, is a matter of concern from the Chinese perspective. And, it is quite natural.

The delay and apparent reluctance in executing Chinese investments, especially in comparison to the timely implementation of projects backed by the US, may indeed be viewed as a genuine concern by Beijing. The reference to Sri Lanka’s Hambantota port, labeled as a ‘debt trap’, serves as a cautionary example, emphasizing China’s stance that such narratives are false and designed to undermine its growing global influence. Delay in the completion of Chinese-funded projects in Nepal has been a recurring concern, and Vice-minister Sun, along with Chinese Ambassador Chen Song, also raised this concern. The intention was to identify the reasons behind these delays and work collaboratively to address the issues, ensuring that Chinese aid is not perceived as a burden to Nepal.

Along with these concerns, Sun emphasized three key areas: The status and future of Nepal-China ties, the desired nature of these relations in changing circumstances, and the role Nepali political parties can play in strengthening bilateral ties.

While the general secretary of the CPN-UML, Shankar Pokherel, responded to the concerns raised by Vice Minister Sun, there was a notable absence of responses from leaders of other political parties during the consultation. Despite the silence on these specific issues, all political leaders affirmed their commitment to enhancing relations with China, expressing Nepal’s eagerness to benefit from China's economic growth. They also reiterated their commitment to the ‘one-China’ policy and support for the Belt and Road Initiative.

Ambassador Chen clarified that the BRI involves more than just concessional loans; it also encompasses grant elements. This statement comes in response to Nepal’s long-standing request for Chinese grants, particularly for major projects under the BRI. However, the ambassador also raised a crucial, unanswered question concerning the delays in projects involving Chinese companies. He pointed out that these companies, which successfully complete projects within set deadlines in other countries, face challenges in doing so in Nepal. Ambassador Chen emphasized that both sides should assess the situation and work toward resolving the issues.

The Nepal government should immediately hold consultation with the Chinese side and move toward implementing the projects keeping the grant element in priority as informed by the ambassador. But, the question left unanswered so far must be mutually addressed. That is the question of Chinese investment and its security. In this regard, the question of Ambassador Chen is serious. He queried the Nepali leaders as to why the same Chinese companies, which were completing projects in other countries within set deadlines, have been unable to do so in Nepal. And he quipped,  “Is it only due to us? No. You have to assess it.” Now it is our part to find fairness. Nepal should seriously do homework to benefit from the two rising economies of the world, which happen to be our neighbors. Until and unless we receive financial support from China and India, we cannot transform Nepal’s national aspiration of ‘Prosperous Nepal, Happy Nepal’ into reality.

Saud’s approach with big powers

Sun Haiyan, deputy minister of the International Liaison Department of the Chinese Communist Party visited Nepal from Jan 26-29. Among other engagements, she held a meeting with second-rung leaders of the national parties represented in the federal parliament. At the meeting, she said that some forces were trying to spoil Nepal-China relations. Sun didn’t name names but she was hinting at the US and India. 

Of late, bilateral exchanges between the two countries have increased. China has also become more vocal and loud in Kathmandu. At the same time, India and the US have also expedited bilateral exchanges with Nepal at multiple levels. Meanwhile, the current government led by Pushpa Kamal Dahal is grappling to maintain cordial ties with all three powers. 

The Ministry of Foreign Affairs is led by Nepali Congress’s Narayan Prakash Saud who is an inexperienced politician in the realm of foreign policy and international relations. This article delves into how the current government is dealing with India, China and the US. 

India

With India, the Dahal-led government has adopted the approach of focusing more on development and economic partnership. Foreign Ministry officials say the signing of power trade agreement with India to export up to 10,000 MW electricity is a key remarkable development in bilateral relations. The agreement, they say, has also created a conducive environment for foreign investment in Nepal’s hydropower sector. Another significant development linked to this deal is India’s nod to allow Nepal to export 40 MW electricity to Bangladesh, which is likely to be operationalized from July this year. After a long time, the dream of regional power has been materialized.

Similarly, officials claim several connectivity and other bilateral projects are moving ahead, and the government has been able to secure Indian support for survivors of the Jajarkot earthquake. India has also increased the grant amount by InRs 1bn to be provided to Nepal under the fiscal year 2024-25. In the new provision, India will be providing Nepal with a total grant of InRs 6.50bn.  

As far as the long-standing issues such as border disputes and the report of Eminent Persons’ Group is concerned, it seems that the present government has adopted a different approach. The Dahal government is unlikely to push India to receive the EPG report. 

As for the Treaty of Peace and Friendship 1950, according to a top diplomat, the present government is of the view that there should be an all-party consensus within the country before approaching India. On border disputes, the government reckons that both political and bureaucratic levels should work simultaneously. 

Speaking at a program a few days back, Foreign Minister Saud said that border disputes between Nepal and India should be resolved on the basis of political consensus. “We have a joint technical committee in this regard. The committee should be activated after which the leadership of both countries should resolve this problem diplomatically based on the facts,” he said. 

China

After the formation of the Dahal-led government, bilateral engagement and exchanges between Nepal and China have increased notably. China seems serious about expediting the works of some projects, such as Ring Road expansion and maintenance of Araniko Highway, among others. Similarly, the two sides have started the paperwork to expedite the construction of cross-border transmission lines while preparations have begun to construct an agro industrial park in Chitwan and Gorkha. 

Over the past few months, both air and road connectivity between the two countries have widened. But the current government still faces the criticism of giving less priority to China, particularly concerning the Belt and Road Initiative (BRI) projects. Beijing has been pressing Kathmandu to sign the BRI implementation plan at the earliest, but the Dahal-led government has not shown much enthusiasm for it.  

A few days back, Deputy Prime Minister and Minister for Home Affairs Narayan Kaji Shrestha said at an event that Nepal and China were working to finalize the BRI implementation plan. But the Ministry of Foreign Affairs has made it clear that Nepal will not take loans from China to realize the BRI projects.

 With big projects, such as those envisioned by the BRI, showing no signs of progressing, China has of late directed its focus on small projects in Nepal, ones that could immediately bring changes in people’s life. A senior official at the Prime Minister’s Office says as the Nepali Congress has been dictating the conduct of foreign policy, there has been little progress in regard to bilateral partnership with China.

While Beijing is pleased with the position taken by Prime Minister Dahal and the senior leaders of major parties against the independence of Taiwan, China still seems wary of the growing influence of Western countries in Nepal.

US

Foreign Minister Saud says there has been substantial improvement in the relationship with the US. For some years after 2018, the Nepal-US ties mainly revolved around the issue of ratifying the Millennium Challenge Corporation (MCC) through parliament. The much controversial issue has now been resolved following the parliamentary endorsement of the MCC Nepal Compact, but some technical details are still there. 

In the MCC, rising cost of the proposed projects is one of the key issues which needs to be resolved through bilateral talks and negotiations. Nepal has already made it clear to the American side that it is not in a position of investing more money in the projects.  

In the past, the US’ Indo-Pacific Strategy (IPS), seen by many as a tool to curb China’s growing influence, had also impacted the Nepal-US relationship. But the American side has managed to downplay the IPS concerns, though some of its components are under implementation. 

During his visit to the US, Foreign Minister Saud held talks with his American counterpart Antony Blinken and other high-level government officials. Along with increasing the volume of bilateral assistance, American private companies have shown interest to invest in Nepal’s tourism, agriculture, medical and other areas, and they are seeking an appropriate environment. In 2023, there was a series of visits from the American side. In the meeting with Saud, Blinken said Nepal is a valued partner in the Indo-Pacific region which has given a clear message that America accords high priority to its relationship with Nepal.


 

CESIF holds discussion on ‘Small Scale Aid in Borderlands and Cross-border Ties’

Centre for Social Inclusion and Federalism (CESIF) organized a round table discussion on ‘Small Scale Aid in Borderlands and Cross-border Ties’, reflecting on two of its publications: “Dynamics of Small-Scale Foreign Aid in Nepal’s Borderlands” and “Evolving Nepal-China Cross Border Relations and Its Impact on Borderland Citizens.”

The Executive Chair of CESIF, Vijay Kant Karna reflected in his opening remarks the importance of research on Nepal’s trade and border relations with China and India.

Madhav Sapkota, Member of Infrastructure Development Committee (HoR), Hon’ble Samjhana Thapaliya, Member of International Relations and Tourism Committee (HoR), Former Secretary Krishna Gyawali, Former Secretary Lal Shankar Ghimire and Secretary of Ministry, Commerce and Supplies, Madhu Marasini were the prominent speakers during the discussion, reads a statement issued by CESIF.

Presenting the findings on “Dynamics of Small-Scale Foreign Aid in Nepal’s Borderlands,” Milan Acharya, a researcher at CESIF, said that China’s small-scale aid focuses solely on the northern frontier districts bordering Tibet Autonomous Region. Of late, India’s small-scale aid and projects have increased in the northern region. The research found that China has a tendency to override state mechanisms and procedures and its small-scale aid is unregulated compared to that of India’s.

Sharing the findings of the research “Evolving Nepal-China Cross Border Relations and Its Impact on Borderland Citizens,” Prabisha Basnet, a researcher at CESIF said, “The Dalai Lama issue remains a major obstacle, with China viewing reverence as a security threat. Unilateral border closures, stringent checks, and declining trade also impacted cross-border marriages and cultural exchanges.”

The dialogue brought together diverse views from the parliamentarians and experts, according to the statement.

Sapkota, representing a northern bordering district Sindhupalchowk, shared his experience of China’s aid in Nepal. He specified an example of the high maintenance cost of a school constructed by China.

Samjhana Thapaliya raised concerns about the border issues with India in Saptari which need to be resolved by both neighbors, India and Nepal.

Former Secretary Krishna Gyawali congratulated CESIF for the findings and further commented on small aid in Nepal.

He said that although small aid assistance is very important, its sustainability after the departure of donors’ funding also needs to be taken into account. He saw lobbying from politicians as the most important factor for small scale funds at the local level.

Secretary Gyawali noted that the objective of small-scale aid must be aligned with national interest, with appropriate monitoring, operation maintenance and accountability mechanisms. Former Secretary Lal Shankar Ghimire expressed his concern on Nepal having an agreement with Tibet, a province of China instead of its central government.

Overall, the participants were united in expressing that small scale aid is important from both India and China. However, it needs to be regulated by the Nepali state mechanism. For this to go ahead, there has to be an institutional cohesion between ministries. 

More than 100 people killed in earthquake in northwest China

More than 100 people have been killed after an earthquake hit northwestern China while many people were asleep, Aljazeera reported.

The earthquake, measured at 6.2 according to state news agency Xinhua, struck at about midnight in Gansu Province near the border with Qinghai, causing significant damage, state media reported on Tuesday.

The tremor was felt as far away as Xi’an in northern Shaanxi province, about 570 kilometres (350 miles) from the epicentre.

Gansu provincial authorities told a press conference that as of 7.50am (23:50 GMT on Monday), 105 people had been confirmed dead, and 397 injured. More than 4,700 houses had been damaged, they added. Power and water supplies were disrupted in some villages, Xinhua said.

According to CCTV, at least 11 people were also killed in the city of Haidong in Qinghai. Haidong is situated close to the epicentre about 100km (60 miles) southwest of Gansu Province’s capital, Lanzhou.

People living close to the epicentre rushed out onto the street as they felt the earthquake. Some buildings collapsed.

“I live on the 16th floor and felt the tremors so strongly,” a man named Qin was quoted as saying in the state-run Global Times. “The moment of the earthquake was feeling like being tossed up after surging waves… I woke my family up and we rushed down all 16 floors in one breath.

Qin added that it was minus 12 degrees Celsius (10.4 Fahrenheit), and that while some of his neighbours had put on down jackets or wrapped themselves in blankets others were bare-chested, according to Aljazeera.

Rescue work was under way with Chinese President Xi Jinping calling for “all-out efforts” in the search and relief work. Nearly 1,500 firefighters were deployed with another 1,500 on stand-by, according to state media. More than 300 officers and soldiers were also mobilised for disaster relief.

Supplies including drinking water, blankets, stoves and instant noodles were also being sent to the affected area.

Footage on state television showed emergency vehicles driving along snow-lined highways, and rescue workers pictured shoulder-to-shoulder in the trucks.

The US Geological Survey reported the quake was a magnitude 5.9, while the European Mediterranean Seismological Centre (EMSC) said it was a magnitude 6.1.

The earthquake struck at a depth of 10km (6 miles) at 11:59 pm local time on Monday (15:59 GMT), according to the USGS, which initially reported the magnitude at 6.0. Multiple aftershocks were reported.

Gansu has a population of about 26 million people and includes part of the Gobi Desert.

Earthquakes are not uncommon in China.

In September 2022, a 6.6-magnitude quake hit Sichuan Province leaving almost 100 dead.

A 7.9-magnitude quake in Sichuan in 2008 left more than 87,000 people dead or missing, including 5,335 children who were in school at the time it happened.

At least 242,000 people were killed in 1976 after an earthquake struck Tangshan in the worst natural disaster in Chinese history.

CESIF organizes round table discussion on Nepal-China Bilateral Relations

Center for Social Inclusion and Federalism (CESIF) organized a round table discussion on Nepal-China Bilateral Relations, reflecting on the Prime Minister’s visit to India from September 23-30, 2023.

The discourse was held at Basera Boutique Hotel on December 12, 2023 and brought together distinguished parliamentarians, experts, journalists, former bureaucrats and diplomats.

Raj Kishor Yadav, Chairperson of the International Relations and Tourism Committee at the House of Representative, was the chief guest speaker of the program, reads a statement issued by Center for Social Inclusion & Federalism.

Similarly, Tsering Lhamu Lama (Tamang) and Sishir Khanal, both members of the International Relations and Tourism Committee, Dr Minendra Rijal, former Defense Minister of Nepal and Central Working Committee member of the Nepali Congress and Ambassador Madhu Raman Acharya, former Foreign Secretary of Nepal and Permanent Representative of Nepal to the United Nations, New York, were the prominent speakers.

The Executive Chair of CESIF, Ambassador Vijay Kant Karna reflected in his opening remarks that the Prime Minister’s visit was an important event but had limitations. Although a 12-point agreement was announced in the joint statement of both prime ministers, earlier agreements are yet to be followed up by both countries. “The visit was unsuccessful in attracting significant Chinese investments in infrastructure development,” Ambassador Karna said.

The dialogue brought together diverse views from the parliamentarians and participants.

Raj Kishor Yadav expressed the necessity to maintain a balanced relationship between China and other world and regional powers.

He further noted that our foreign policy must avoid “fear psychosis” when dealing with foreign countries.

Similarly, Tsering Lhamu Lama (Tamang) expressed the importance of opening border points between Nepal and China. Lama representing Karnali Province, reminded that five of the border points are in Karnali, which can hugely benefit the economy of the province. Lama concluded that the visit was successful as it was also able to secure the agreement with China to build a road to Man Sarovar from Nepal, according to the statement.

Likewise, Sishir Khanal noted that the Prime Minister’s visit was not clear enough in its objectives. He further said that the visit did not make any significant contributions towards the relationship between Nepal and China, including the BRI agreement and the border points. He raised a concern as Nepal formally accepted the “One China Principle,” moving on from the “One China Policy”.

Dr Minendra Rijal said that the joint communique has a language that is rather imposing on Nepal. He expressed concerns about debts Nepal is taking from China, including the amount for the Pokhara International Airport.

Moreover, Ambassador Madhu Raman Acharya pointed out that there was no substance in the agreement except the transmission line between Kerung and Rashuwagadhi. He said that among the seventy agreements since the former PM KP Sharma Oli visit to China, only a few are being implemented. He also expressed concerns about the joint communique’s language against Taiwan’s independence.

Overall, the participants were united in expressing that the agreements signed during this and previous visits have not been successfully implemented. There was also a concern that official agreements to implement BRI in Nepal are not yet public, which is allowing China to shift goalposts.

The participants opined that Nepal needs to understand China's strategic concerns better and express Nepalese interests specifically with China.