The Nepalese Prime Minister, Pushpa Kamal Dahal, is scheduled to visit China on September 23 at a time when people hit the streets of Kathmandu in a bid to oppose China for its new map, which did not exhibit Kalapani, Lipulekh and Limpiyadhura regions as part of Nepal.
Nepal Student Union, affiliated with the Nepali Congress, orchestrated a demonstration outside the Embassy of China in Kathmandu in protest against this move. Expressing his grudge against China, Balen Shah, Mayor of Kathmandu Municipality, even cancelled his visit to the country.
For quite some time, the relations between Nepal and China have not been as warm as they used to be when KP Sharma Oli was the Prime Minister between 15 February 2018 and 13 May 2021. Relations between the two deteriorated after the publication of news in Nepalese media about the possible encroachment of Nepalese territory by China in the Humla district in 2020. Immediately afterwards, the Chinese Embassy in Kathmandu denied any such encroachment. Reciprocating the Chinese views, Nepal’s government also stated that there was no territorial dispute between the two countries. Later, the new government formed under Nepali Congress leader Sher Bahadur Deuba in May 2021 constituted a committee headed by the Home Ministry Joint-secretary, Jaya Raj Acharya, to investigate the case. The committee, after a field visit to Humla district, submitted its report to the government in September 2022, in which it found that there were some genuine problems regarding the Nepal-China border and the problem could be settled only after the formation of a joint group of experts between the two countries.
Immediately afterwards, the Chinese Embassy in Kathmandu denied any such encroachment Reciprocating the Chinese views.
Following this event, the Nepalese people became even more suspicious of China’s motives, when a day before the inauguration of the Pokhara International Airport on January 1 this year, the Chinese Embassy in Kathmandu pointed out that it was a flagship project of China-Nepal Belt and Road Initiative (BRI) cooperation on its Twitter. Quickly afterwards, the Nepalese government rejected this Chinese claim.
Nepal received a US$215.96 million soft loan from the EXIM Bank of China for the construction of the Pokhara International Airport in 2016, when the country did not even have an agreement with China on BRI. It was only a year after, in 2017, that Nepal formally signed on to the BRI with China. Initially, the country had selected 35 projects under the BRI, but, later on, it downsized it to nine projects. But even six years after the signing of the agreement, no project has been launched under the BRI.
Nepal has been incurring a huge economic loss due to the multi-million-dollar Pokhara International Airport. No regular international flight operates at this airport even eight months after its inauguration. So, the country is not even in a position to pay off the loan.
Fear looms large amongst the Nepalese people, that any effort to implement projects under the BRI could push the country into a debt trap, as has happened in Sri Lanka, and thereby undermine the sovereignty of the country. It is well known that, in most of the deals under the BRI, there is a lack of transparency, which quite often serves China’s strategic interests rather than that of the recipient country. This was also one of the reasons why the previous Nepali Congress-led government under Sher Bahadur Deuba had made it amply clear to China that it wanted only grants and not commercial loans from the latter for the development of infrastructure projects under its ambitious BRI.
Nevertheless, it is not understood why Pushpa Kamal Dahal, after becoming Prime Minister, had hastily allowed a Chinese team to conduct a detailed study of the Kathmandu-Kerung railway, knowing well that this could prove another white elephant for Nepal. This Trans-Himalayan Tibet-Nepal Railway project could cost about US$4.8 billion or some 10 per cent of Nepal’s GDP for the completion of the Nepal section of the railway. This multi-billion-dollar railway, that would have to pass through the fragile Himalayan region, would be of strategic interest to China, but it is not likely to prove economically beneficial to Nepal. In such a situation, what will happen if Nepal fails to repay the loans for this project?
Now, in his effort to bring Nepal’s relations with China on the right track, Prime Minister Dahal wants to make some important deals with China during his forthcoming visit to to the country, which includes opening a new border point for trade between the two nations. On this occasion, Nepal is likely to propose the construction of two border transmission line projects with China—the 220kV Chilime-Kerung cross-border lying 16 km from the Nepal-China border at Rasuwagadhi and the Kimathanka border point in Sankhuwasabha district of Koshi Province. Nepal did not have any transmission line for the exchange of electricity with China before. Besides these projects, Nepal will seek China’s support in electrifying some of its border areas near the Nepal-China border through the Chinese power distribution system. Most importantly, the two countries are also considering joint investments in mega hydropower projects such as the Arun Kimathanka, with a capacity of generating 454MW. A deal between the two countries could also be made for the development of an underground electricity network system along the Kathmandu Ring Road that is being widened by China.
Over and above all of this, Nepal and China are likely to resume bilateral military and defence engagements. Towards this end, the Nepal Army could send some of its officials to China to pursue the National Defence Course. Besides, the Nepalese army and the People’s Liberation Army of China are expected to resume joint military exercises under the banner of ‘Sagarmatha Friendship’, which has remained stalled since 2019.
The Nepal Army could send some of its officials to China to pursue the National Defence Course. Besides, the Nepalese army and the People’s Liberation Army of China are expected to resume joint military exercises under the banner of ‘Sagarmatha Friendship.
It is a test of diplomatic skill for Prime Minister Dahal as to how he can remove the Nepalese people’s distrust of China by serving the interests of the people of Nepal during his China visit. He should not sign any fresh agreement without giving due consideration to its pros and cons. At the same time, he should also not shy away from raising boundary issues or issues related to writing off loans for projects financed by China that have proved counterproductive to Nepal. Trust deficit, if any, between the two countries could be addressed and better relations established—if he can do so.
Source : ORF