China’s attempts to change its relations with Nepal into a strategic partnership, focusing on the Belt and Road Initiative and the Boundary Management System, have encountered significant challenges due to disagreements. Specifically, Nepal’s reluctance to fall into debt traps caused by high-interest loans from the Belt and Road Initiative and continued failure to ratify the Boundary Management System agreement. The two countries’ inability to reach a consensus on these vital issues, combined with Nepal’s measured resistance to China’s dominance, highlights the uncertainty in their strategic relationship.
In 2019, Xi Jinping visited Nepal and declared that China–Nepal relations would change from a comprehensive partnership to a strategic partnership. The focus of relations has shifted towards enhancing strategic and security. But neither country can come to an agreement on the two most important pillars of this new relationship, calling its sustainability into question.
These pillars are the Boundary Management System (BMS) and the Belt and Road Initiative (BRI). Xi proposed the BMS — which commits both countries to return people who are found crossing the border illegally. Nepal signed an agreement, but it has yet to be ratified. In 2017, Nepal signed the Memorandum of Understanding to join the BRI, but some point out Nepal’s failure to implement projects. In June 2024, China and Nepal conducted two important meetings to discuss border-related issues and BRI implementation. The outcome of these meetings was bleak, partially because of disagreements over the BRI and BMS.
On 20 June 2024, representatives of China and Nepal met in Beijing for a meeting of the Joint Expert Group to conduct a discussion related to border issues, but did not produce a bilateral statement. The lack of a bilateral statement encourages speculation. One particular speculation is that this meeting failed to yield positive outcomes to resolve border issues, which could be because of the failure to reach a consensus on ratifying the BMS.
While the Chinese side pressed Nepal to ratify the BMS, Nepal urged China to follow the mandates of the boundary protocol, which require both sides to first engage in border investigation, then meet and resolve border issues and finally ratify the BMS. In Nepal, border inspection is a priority because there have been increased cases of encroachment, illegal construction and missing border pillars.
China’s push for a BMS is driven by the need to establish a comprehensive security mechanism at the border as soon as possible, to guard the political stability of Tibet. Since the Tibetans’ 2008 protest in Nepal, Chinese scholars and leaders have pushed for border pacification to be China’s top priority in Nepal. Tibetans are one of the primary targets of the BMS. Reports claim that the BMS also sought to repatriate Tibetans fleeing Tibet within a week, though the content of the agreement is yet to be made public.
Following the border talk, on 26 June 2024 China and Nepal held the 16th Meeting of the Nepal–China Diplomatic Consultation Mechanism. Instead of joint statements, after the meeting Nepal made a press release, while China published news about the meeting. It is evident that a lack of agreement on the BRI is a major issue. For instance, the Chinese side mentioned the BRI twice in approximately 300 news reports. In contrast, Nepal’s press releases do not mention the BRI at all.
The BRI has become a sensitive issue in Nepal. Nepal is reluctant to accept high-interest loans because it is wary of getting trapped in unsustainable debts owed to China, which has happened with Sri Lanka and other countries. In 2023 the above concerns spurred a controversy in Nepal, when the Chinese embassy mentioned that Pokhara International Airport was built under the BRI.
Some Nepalese lawmakers also expressed concern over the lack of transparency in the implementation of BRI projects. But China is not interested in providing grants, which has led to BRI diplomatic stagnation. Nepal also worries about maintaining strategic balance with India, which is Nepal’s largest trading partner.
Amidst the contention over these issues, it is interesting to observe other aspects of the press releases. The Chinese side highlighted: ‘The Nepali side reiterated its firm adherence to the one-China principle and will never allow any force to use its territory for anti-China activities’.
But this commitment, usually evident in press releases or joint statements, is missing from the Nepali side. Nepal only mentioned that ‘Vice Minister Weidong appreciated Nepal’s commitment to the One China Principle’. There is no mention of zero tolerance for anti-China activities, and no mention of Tibet or Taiwan as integral parts of China. This departure from tradition underscores contention in the relationship.
With the change from bilateral relations to a strategic partnership, China’s pressure to sign the BMS underlines its role in China’s overall strategic and security objectives in Nepal. These two meetings revealed that the BRI and BMS constitute China’s two most important diplomatic and security elements, driving its interest in Nepal.
Without consensus on these two issues, the strategic partnership between the two remains peripheral. Nepal’s avoidance of mentioning the BRI and its commitment to anti-China activities is a small but significant gesture of resistance to China’s hegemony.
In July 2024, Nepal witnessed the formation of a new government that catapulted Khadga Prasad Sharma Oli, chairman of the Communist Party of Nepal (Unified Marxist-Leninist), to the prime ministership in a coalition government with the Nepali Congress party. The Chinese government have already pressured Oli on the BRI.
But the situation is different this time. Nepali Congress has long been opposed to Nepal accepting BRI loans because of Nepal’s high debt burden and argue Nepal should only accept BRI grants. Oli needs Nepali Congress support and will not be easily swayed by China, which further complicates the implementation of the BRI.
Dolma Tsering is a postdoctoral researcher at the International Center for Cultural Studies, National Yang Ming Chiao Tung University, Taiwan.
Courtesy: East Asia Forum
The views expressed in this article are the author’s own and do not necessarily reflect Coverpage’s editorial stance
