Is Nepal The Next Victim In China’s Geopolitical Game?

Nepal, a landlocked nation nestled in the Himalayas, occupies a strategic position between two of Asia’s giants: India and China. In recent years, China’s influence in Nepal has grown rapidly, raising concerns about its implications for Nepal’s sovereignty, political landscape, and economic dependencies. This is especially concerning given China’s history of trapping countries in debt cycles, as seen in Sri Lanka and Pakistan. Nepal’s growing dependence on China for loans and investments has raised the risk of falling into a similar debt trap, making China’s increasingly hard influence on Nepal a topic of growing concern and interest, not only in South Asia but on the global stage.

On the other hand, India and Nepal share deep-rooted bonds of culture, religion, and economic cooperation. These ties have traditionally defined the relationship between the two neighbours, creating an aura of camaraderie that transcends borders. India views Nepal as a close ally with whom it shares historical and cultural affinities. However, China’s expanding footprint in the region has raised concerns about India’s strategic interests.

Nepal’s upcoming Prime Ministerial visit to China on September 23rd, 2023, has further amplified the geopolitical complexity of the region. As per the leading news article in Nepal, the agenda for discussions during this visit appears to emphasize economic cooperation, including agricultural development, checkpoint openings, and hydropower initiatives. However, it also brings into sharp focus China’s increasing hard influence in Nepal for its interests.

This article aims to dissect Nepal’s multifaceted relationship with China and India, exploring the delicate balance of power, the economic opportunities, and the geopolitical challenges that define this ever-evolving trilateral dynamic. As we navigate through the intricate web of interests and aspirations, we will strive to gain a nuanced understanding of how Nepal aims to forge its destiny amidst the ever-shifting tides of geopolitics, including the upcoming challenges that Nepal may face if precautionary steps are not taken to minimize China’s interference in internal matters.

Foundations of China’s Multifaceted Relationship with Nepal

Nepal and China have historically had limited ties, but Nepal has had strong cultural, historical, and religious ties with Tibet. Buddhism, the second-most prominent religion in Nepal, is deeply rooted in Tibet, and Tibetan culture can be seen throughout Nepal, from language to art.

In 1950, China illegally annexed and occupied Tibet. Mao Zedong considered Tibet to be China’s “right-hand palm,” with five fingers on its periphery: Ladakh, Nepal, Sikkim, Bhutan, and Arunachal Pradesh. Mao believed that it was China’s responsibility to “liberate” these regions.

Also Read, TIBET: A Lost Cause?

Since then, China has gradually increased its influence and interference in Nepal. Diplomatic relations between the two nations were forged in 1955, setting the stage for China to involve itself in Nepal’s internal affairs. Nepal should take this seriously, given China’s history of expansionism and examples of other countries that have been negatively affected by China’s influence.

China often uses a salami-slicing strategy to slowly and gradually gain an advantage over its neighbours. This can be seen in the acquisition of Tibet, the capture of Aksai Chin, and the annexation of the Paracel Islands. China also targets countries that do not share borders with it but can be used for other purposes, such as debt-trap diplomacy. Sri Lanka, Pakistan, and some African countries are examples of this.

Nepal should be wary of China’s expansionist ambitions and take steps to protect its sovereignty and territorial integrity. This may include diversifying its economic and diplomatic ties, strengthening its military, and building closer relationships with other countries such as India that are concerned about China’s growing power and ambitions.

China’s Strategic Interests in Disrupting India-Nepal Brotherly Relations

The complex triangular relationship between India, Nepal, and China has drawn significant attention in recent years. China’s growing influence in Nepal is a source of concern for India, which has traditionally seen Nepal as its sphere of influence. To understand China’s attempts to disrupt India-Nepal relations, we must examine the strategic interests and geopolitical dynamics at play.

China has several strategic interests in Nepal, including:

• Weakening a strong rival: China has long viewed South Asia as a region where it can counterbalance India’s influence. Nepal, nestled between these two Asian giants, provides an ideal arena for China to challenge India’s traditional hegemony.

• Proximity to Tibet and anti-China activities: Nepal shares a border with the Tibet Autonomous Region of China. This geographical proximity is of significant strategic importance to China. Beijing has concerns about Tibetan refugees and potential anti-China activities emanating from Nepal. By establishing influence in Nepal, China seeks to mitigate these perceived threats and maintain tighter control over its Tibetan border.

• Expanding its Belt and Road Initiative (BRI): China’s ambitious Belt and Road Initiative (BRI) is a cornerstone of its foreign policy, aiming to enhance connectivity and expand its economic reach. Nepal’s strategic location as a potential gateway to South Asia makes it a valuable component of the BRI. By fostering closer ties with Nepal, China can advance its infrastructure projects and trade routes in the region.

• Competition for Regional Supremacy: China’s global ambitions include asserting itself as a dominant regional power. A cooperative and friendly Nepal aligning with China bolsters its standing in South Asia and weakens India’s role as the primary regional influencer. This competition for supremacy is a driving force behind China’s efforts to disrupt India-Nepal relations.

China has been using a variety of methods to disrupt India-Nepal relations, including:

• Economic investment: China has invested heavily in Nepal, including in infrastructure projects and key industries. This has given China significant economic leverage over Nepal and has reduced Nepal’s dependence on India.

• Diplomatic pressure: China has been putting diplomatic pressure on Nepal to distance itself from India. For example, China has criticized Nepal’s participation in the Indian-led BIMSTEC regional grouping and has discouraged Nepal from participating in Indian military exercises.

• Military threats: China has also engaged in military brinkmanship to intimidate Nepal. For example, in 2019, China deployed troops to the Nepalese border after Nepal revised its constitution to include a new map that showed disputed territories as part of Nepal.

Benefits and Safety of Nepal’s Relationship with India

India and Nepal have a long and deep-rooted relationship based on shared history, culture, and religion. The two countries have an open border, and there is a large movement of people and goods between them. India is Nepal’s largest trading partner and the source of most of its foreign investment.

China, on the other hand, is a relatively new player in Nepal. China has been increasing its investment in Nepal in recent years, but the relationship is still developing. China has also been accused of trying to interfere in Nepal’s internal affairs. Additionally, China has a history of annexation and debt-trapping nations.

Nepal’s relationship with India is more beneficial and safe for Nepal than its relationship with China for the following reasons:

• Trade and investment: India is Nepal’s largest trading partner, and Nepal has a trade surplus with India. India is also the largest source of FDI in Nepal. Chinese investment in Nepal is still relatively small, and Nepal has a trade deficit with China.

• Connectivity: Nepal is landlocked and relies on India for access to the sea. India has allowed Nepal to use its ports and transit facilities duty-free. China has also offered Nepal access to its ports.

• Security: India and Nepal have a close security relationship. India has been providing military assistance to Nepal for many years. China is also trying to increase its military cooperation with Nepal, but there is some concern in Nepal about China’s intentions.

• People-to-people relations: There are millions of Nepalese people living and working in India. There are also close cultural and religious ties between India and Nepal. The relationship between Nepal and China is not as close at the people-to-people level.

In addition to these benefits, Nepal’s relationship with India is also safer than its relationship with China. China has a history of bullying and coercing its neighbours. India, on the other hand, has a long history of respecting Nepal’s sovereignty and independence.

Overall, Nepal’s relationship with India is more beneficial and safe for Nepal than its relationship with China. Nepal should continue to nurture its close ties with India and be wary of China’s growing influence in the region.

China’s Visible Interference in Nepal

From 2015 onwards, China has been increasing its influence in Nepal, a strategically located Himalayan nation. This has raised concerns about the extent of Beijing’s influence over Nepal’s political decisions and its sovereignty.

• Political Influence: China has been involved in Nepal’s domestic politics, engaging with Nepali political leaders and party factions. This has fueled speculations about China’s efforts to shape Nepal’s political landscape in its favour. China is using Nepali politicians as puppets to safeguard its interests.

• Soaring Debt Burden: Nepal’s fiscal year 2021-22 witnessed a historic milestone as its total debt surged past the trillion-rupee mark. This alarming increase in debt has raised concerns about Nepal’s ability to repay its debts and revive its economic autonomy. 

• Exploiting Natural Resources: Nepal is a resource-rich country, with abundant water, hydroelectric potential, and minerals. China has been deepening its economic and political ties with Nepal to gain access to these resources. China is looting the natural resources of Nepal like the British looted its former colonies. It seems like Nepal is becoming a modern-day Chinese colony.

Tibetan Refugees in Nepal: A Complex Reality

The Tibetan refugee crisis began in 1959 when the Dalai Lama fled Tibet to seek asylum in India. Nepal has historically been a sanctuary for Tibetan refugees, offering them safety and shelter as they embarked on perilous journeys to India. The Tibetan diaspora in Nepal is an integral part of the nation’s social fabric, encompassing generations who have grown up in exile.

• The Quest for Legal Protection: Tibetan refugees in Nepal currently lack legal refugee status. While Nepal is a signatory to international refugee conventions, it has not established a legal framework for the protection of refugees, including Tibetans. This legal void places the Tibetan community in a precarious position, where their rights and status remain undefined.

• Intimidation and Surveillance: Reports of Tibetan refugees facing intimidation and surveillance by Chinese agents operating within Nepal have surfaced. This environment of fear and self-censorship can have a chilling effect on the Tibetan community’s ability to express themselves and advocate for their rights.

• Challenges Faced by Tibetan NGOs: Tibetan non-governmental organizations (NGOs) operating in Nepal have played a pivotal role in providing support and services to the refugee community. However, these organizations have increasingly encountered scrutiny and restrictions. They navigate a complex landscape where the interests and concerns of both the Nepalese government and Chinese authorities must be considered.

Nepal’s Sovereignty Amidst China’s Growing Involvement

China’s growing involvement in Nepal raises concerns about its impact on Nepal’s sovereignty. China’s investment in Nepal’s infrastructure, military cooperation, economic engagement, and political involvement can all be seen as potential threats to Nepal’s sovereignty.

• Infrastructure: China’s investment in Nepal’s infrastructure, including roads, railways, airports, and hydropower projects, can be seen as a positive development for Nepal. However, if these projects are not managed carefully and if Nepal becomes overly dependent on Chinese funding and expertise, it could risk compromising its sovereignty. Excessive influence or control by China over critical infrastructure could limit Nepal’s ability to make independent decisions regarding its development and transportation networks.

• Economy: China’s economic involvement in Nepal, including investments, trade, and financial aid, has both benefits and potential sovereignty concerns. Nepal should be mindful of its economic dependencies on China. An overwhelming presence of Chinese investments and trade could lead to economic leverage, where China might exert influence over Nepal’s economic policies and decision-making. This could limit Nepal’s sovereignty in shaping its economic future.

• Politics: China’s engagement with Nepali politics, including support for political parties and leaders, has been a source of concern for Nepal’s sovereignty. China’s involvement in Nepali politics, particularly its efforts to forge relationships with various political groups and parties, can be seen as interference in Nepal’s internal affairs. If foreign powers, including China, have undue influence over Nepal’s political decisions and governance, it could undermine the country’s sovereignty and its ability to make independent political choices.

• Military: Nepal’s military cooperation with China has evolved, and while it can enhance defence capabilities, it also presents sovereignty-related concerns. Nepal must be cautious not to become overly reliant on Chinese military aid and support. Heavy dependence on China for military equipment and training could compromise Nepal’s sovereignty by making it beholden to Chinese interests in defence and security matters.

Lessons from Others: How Nepal Can Avoid Its Losses

China’s approach to lending and financing infrastructure projects in other countries has raised concerns about debt dependency and sovereignty. Examining the experiences of Pakistan and Sri Lanka can provide valuable lessons for Nepal.

Sri Lanka’s Experience

• Hambantota Port: Sri Lanka’s Hambantota Port became a symbol of debt-related challenges. Unable to repay Chinese loans, Sri Lanka handed over the port to China on a 99-year lease. This raised concerns about the loss of sovereignty over a strategically located asset.

• Loan Terms: Sri Lanka faced criticism for accepting high-interest loans and engaging in projects without conducting thorough feasibility studies. It is essential for borrowing countries to carefully review loan terms, interest rates, and repayment schedules to ensure they are sustainable.

Pakistan’s Experience

• CPEC Debt: Pakistan’s China-Pakistan Economic Corridor (CPEC) has brought significant infrastructure development but also increased its debt burden. The terms of CPEC loans and their impact on Pakistan’s economy have been subjects of debate.

• Strategic Assets: Concerns have arisen about the potential use of strategic assets, like the Gwadar Port, in case of repayment difficulties. Borrowing countries should be cautious about the collateral or concessions they provide in loan agreements.

Nepal can learn valuable lessons from China’s engagements with Pakistan and Sri Lanka, particularly in terms of managing debt and safeguarding national interests.

• Sustainable Borrowing: Nepal should carefully assess the terms and conditions of loans from China, ensuring they are sustainable within the country’s economic capacity. Avoid accumulating excessive debt that could strain the economy.

• Transparent Agreements: Ensure transparency in all agreements and negotiations with China. Publish details of loan agreements and project terms to allow public scrutiny and accountability.

• Guarding Sovereignty: Nepal should be cautious about offering strategic assets as collateral in loan agreements. Protecting national sovereignty over key infrastructure assets is paramount.

• Avoid Over-Reliance: While engaging with China is essential, Nepal should also diversify its economic and geopolitical partnerships. Over-reliance on a single partner can lead to vulnerabilities.

• Public Awareness: Engage the public, civil society, and media in discussions about major projects and their financing. Public awareness and support can contribute to greater accountability.

• Contingency Planning: Develop contingency plans for potential scenarios where debt obligations become challenging to meet. Explore options for renegotiating loans or seeking assistance from international organizations.
• Strengthen Institutions: Nepal should strengthen its institutions and capacity to make independent decisions. This will make Nepal more resilient to external influences.

• Educate Policymakers: Policymakers should be educated about the potential risks and benefits of China’s engagement. This will help to ensure that decisions are made in the best interests of Nepal.

• Promote National Interest: Nepal should promote its national interest in all engagements with China. This includes being clear and assertive about Nepal’s priorities and concerns.

Nepal’s sovereignty is precious and should be protected at all costs. By taking the necessary precautions, Nepal can avoid its losses and ensure a prosperous and independent future for its people.

Need to Strengthen Ties with India to Avoid China’s Influence

Nepal must strengthen its ties with India to avoid falling under China’s influence. China has an expansionist policy and a history of exploiting countries that become dependent on it, while India follows the principle of Vasudhaiva Kutumbakam (The world is a family). Pakistan and Sri Lanka are two examples of countries that have been nearly bankrupted by Chinese debt. 

Sri Lanka knocked on India’s doors for help in its time of need, and India saved Sri Lanka to the best of its ability. Pakistan, on the other hand, has remained dependent on China and has started to face the consequences. Nepal should learn from Bangladesh since it has chosen to maintain a close relationship with India over China and remains a respected country in the world.

India is Nepal’s largest trading partner and source of foreign investment. It is also a close security partner, providing military assistance to Nepal and helping to protect its sovereignty from external threats. Additionally, there are millions of Nepalese people living and working in India.

Nepal can strengthen its ties with India by increasing trade and investment, enhancing security cooperation, and promoting people-to-people ties. By doing so, Nepal can avoid falling into China’s trap and ensure a prosperous future for its people.

Nepal’s PM’s Visit to China: A Balancing Act Amidst Geopolitical Uncertainties

Nepal’s Prime Minister, Pushpa Kamal Dahal, is scheduled to visit China on September 23rd. This visit comes at a time of heightened geopolitical tensions in the region, and it will be a delicate balancing act for Nepal.

On the one hand, Nepal has a close relationship with China, which has become its largest trading partner and a major source of investment in recent years. On the other hand, Nepal also has a close relationship with India, its traditional ally.

Dahal’s visit to China will be closely watched by both countries. It will be seen as a test of Nepal’s diplomatic skills and its ability to maintain a balanced relationship with both of its major neighbours.

Dahal’s visit to China could be an opportunity for Nepal to deepen its economic ties with China but it’s also important to safeguard its sovereignty and independence considering the history of China. Nepal must carefully balance its economic interests with its security concerns. It must also ensure that its relationship with China does not compromise its relationship with India.

Nepal’s foreign policy is at a crossroads, as it seeks to navigate the complex geopolitics of its relationships with China and India. The delicate balance of power, economic opportunities, and geopolitical challenges define this ever-evolving trilateral dynamic. As we have explored the multifaceted aspects of Nepal’s relationships with these two giants, it is clear that Nepal’s sovereignty and national interests must be at the forefront of its decision-making.

China’s rapid rise as a regional and global power presents both opportunities and risks for Nepal. While economic cooperation and infrastructure development are essential, Nepal must be vigilant in protecting its sovereignty and avoiding the debt trap pitfalls that other nations have faced. Transparency, sustainable borrowing practices, and diversification of economic and geopolitical partnerships are key strategies to safeguard Nepal’s interests.

At the same time, Nepal should recognize the significance of its historical, cultural, and economic ties with India. Strengthening these bonds and pursuing a balanced foreign policy approach can help Nepal mitigate undue external influences while securing its sovereignty.

As Nepal’s Prime Minister embarks on his visit to China, the world watches closely. This is an opportunity for Nepal to assert its autonomy, strengthen economic ties, and uphold its sovereignty amid geopolitical complexities. The lessons learned from other nations, the importance of national interest, and the value of a diversified and resilient foreign policy should guide Nepal’s path as it navigates the ever-shifting tides of geopolitics in the Himalayan region. Ultimately, Nepal’s destiny will be forged by its ability to protect its sovereignty and make choices that serve the best interests of its people.