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Nepal moves closer to China but dodges security alliance

Lekhanath Pandey in Kathmandu
September 27, 2023

A visit of Nepalese PM Pushpa Kamal Dahal to China saw the two nations pledge to boost trade amid plans of new transport links through the Himalayas. But Dahal said Nepal would not join any security alliances.

Nepal's Prime MInister Pushpa Kamal Dahal takes a bouquet of flowers from a girl in China
Dahal (center) backed China on the issues of Taiwan and TibetImage: Huang Zongzhi/Xinhua/picture alliance

Nepal is working to boost ties with China, with Nepalese Prime Minister Pushpa Kamal Dahal agreeing to work with Beijing in areas like trade, tourism, transportation, energy, and infrastructure while touring China. Dahal arrived in China on Saturday and is scheduled to spend a week in the neighboring country.

Nepal is wedged between China and India, making the Himalayan nation economically dependent on both Asian giants. This has for decades forced Kathmandu into an awkward balancing act. Currently, India is Nepal's most important trade partner, followed by China. This might yet change, as China is eager to make Nepal part of its global Belt and Road Initiative (BRI) which foresees a chain of transport links to deliver Chinese goods to their buyers in the West.

But it was exactly this aspect that has so far fallen short of expectations during Dahal's visit. In spite of Dahal's meetings with China's President Xi Jinping and Premier Li Qiang, and his pledges to improve cross-border connectivity with new ports, roads, railways and airways, Dahal was not willing to sign off on a Chinese draft implementation plan for the BRI.

A map of Europe and Asia showing China's Belt and Road ports and transport links

One of Kathmandu's main concerns is the section on security and legal cooperation within the plan, a Nepalese diplomatic source told DW over a phone call from Beijing.

"There is a proposal of strengthening legal cooperation, law enforcement cooperation and security cooperation in order to facilitate the Belt and Road cooperation," and the Nepalese side has yet to obtain a clear understanding of it, the diplomatic source added.

Officials in Kathmandu have already signaled concern that any Chinese loans in commercial terms for the BRI projects could potentially lead to a "debt-trap."

China and Nepal, however, pledged to accelerate the consultations to finalize the text on the BRI implementation plan at an early date, according to a joint statement.

Dahal backs China on Taiwan, Tibet

During his meeting with President Xi, Dahal expressed Nepal's support for the China-led Global Development Initiative (GDI) and signaled willingness to join it in the future. However, in another signal of Kathmandu's reservations towards its powerful neighbor, Dahal stopped short of suggesting that Nepal would join other Beijing-led undertakings, including the still-hazy Global Security Initiative. Dahal said Nepal could not be part of any security alliances.

Nepal's PM Dahal shakes hands with Xi Jinping
Before his visit to China, Dahal signaled concern over taking out loans for infrastructure projectsImage: Ding Lin/Xinhua/picture alliance

At the same time, Dahal clearly signaled support for Beijing on the Taiwan issue, reaffirming China's stance that the self-ruled island is a part of China. He said the Nepali side was against "Taiwan independence" while also saying that any Tibet issues are China's internal affairs. Dahal said that his nation would never allow any separatist activities against China on its soil.

Nepal hopes for more Chinese tourists

During the visit, the two sides reached an agreement on the construction of the Nepal-China Power Grid Interconnection Project (Chimile-Kerung). The 220-kV cross-border transmission line will be built under a Chinese grant assistance. Both sides are working towards finalizing the China-Nepal Electric Power Cooperation Plan, aiming to bolster the energy sector.

The tourism issue was also figured prominently, with plans to organize promotional events in both countries and designate 2025 as the Nepal Visit Year in China, aiming to boost tourism. Beijing and Kathmandu also pledged to encourage their airlines to resume and open more flights and air routes, including ones connecting Nepal's scenic tourist city of Pokhara.

Visit managed to 'build confidence'

Analysts have given mixed reactions about the results of the ongoing visit. Former foreign minister and a leader of the opposition Communist CPN-UML party, Pradeep Gyawali, said Dahal has already lost the opportunity to seal deals on the BRI implementation plan and the power trade agreement between the two sides.

However, Chandra Dev Bhatta, a geopolitical analyst based in Kathmandu, observed that the two neighbors still found some areas of cooperation.

The visit "has built confidence and given an opportunity to revisit the entire gamut of bilateral cooperation issues, including the pending ones," he told DW.

Lila Nyaichyai, who teaches international relations at Kathmandu's Tribhuvan University, notes that there were no exclusive new agreements, but both of the countries renewed their commitment to execute previously pledged projects.

"In one way, such an understanding is a bridge for continuing and deepening bilateral cooperation, especially in economic front," she told DW.

Skipping contentious issues

The Nepali PM's visit comes shortly after Kathmandu, along with several other nations, protested China's recently unveiled map, which erroneously placed Nepal's claimed Himalayan territories — Lipulekh, Limpiyadhura and Kalapani — inside India's territory.

Nepal's Foreign Ministry has requested China to rectify or amend the map, and Dahal's partners in the ruling coalition suggested that the prime minister should address  the map issue with the Chinese leadership. Still, the joint statement remained silent on the map issue and many other controversial issues.

Edited by: Darko Janjevic