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China-Nepal Bilateral Cooperation

  • 30 Nov 2020
  • 7 min read

Why in News

Recently, China and Nepal have discussed various issues of bilateral interest, including bolstering military cooperation between the countries, issues pertaining to resumption of training and student exchange programs and follow up on defence assistance that have been impacted due to the Covid-19 pandemic.

Key Points

  • Historical Background:
    • In 1955, Nepal established diplomatic relations with China.
    • It recognised Tibet as part of China in 1956 and signed the Treaty of Peace and Friendship in 1960.
    • In the 1970s, when King Birendra of Nepal proposed Nepal as a “zone of peace” between India and China, India did not show keen interest, while China was quite supportive. These and many such issues created a rift in Nepal-India ties; while at the same time China has been proactive to support and aid Nepal.
    • Indo-Nepalese relations took a turn in 2015, when India imposed an informal yet effective blockade on Nepal, thus causing acute fuel and medicine shortages in Nepal.
      • Nepal imports almost all of its oil through India, as road links to China through the Himalayas had been blocked since the earthquakes of April and May 2015.
    • As tensions with India mounted, China reopened its border with Nepal, in Tibet.
    • After the recent visit of Chinese President, Nepal has reiterated its commitment to ‘One-China policy’, promising not to allow any forces to use its territory against China.
  • China’s Interest:
    • Although Nepal and India have an open border and free mobility of people across borders; it is China that is increasingly working to take over India’s position of the largest trading partner of Nepal.
      • India is the largest economy of south Asia and has been emerging as a leader of south Asian countries.
      • China wants to contain India's growing power and status which may become a threat to Chinese dream of becoming the superpower.
    • The growing influence of India in Tibet had grave security considerations for China.
    • Thus, preserving the balance of power in southern Asia in its favour and securing Nepal’s active cooperation to prevent its rivals use of the country for anti-Chinese activities became principal strategic objectives of Beijing’s Nepal policy.
    • Nepal’s northern border with China lies entirely with Tibet and China sees security cooperation with Nepal as critical in controlling the Tibetan matters.
  • Nepal’s Benefit:
    • For Nepal, China serves as a potential supplier of goods and assistance that it needs in order to recover its economy.
      • Almost half the population of Nepal is unemployed and more than half is illiterate. At the same time, more than 30 per cent of the people in Nepal live in poverty.
      • To deal with its internal problems, Nepal needs to engage with China to overcome its poverty & unemployment.
    • Nepal with China will gain the mileage in negotiations and counter India’s Big Brother approach.
    • Through China Nepal Economic Corridor, Nepal seeks to end Indian dominance over its trade routes by increasing connectivity with China.
  • India’s Concern:
    • Given the difference in the strategic weight of China and Nepal, security diplomacy can be used as a tool by China to interfere in the internal affairs of Nepal.
    • Since Nepal acts as a buffer state for India, seeing it slip into China's sphere of influence, will not be in India's strategic interest.
    • Also, China’s interest in “security diplomacy” is not limited to Nepal.
    • China's deep pockets make it difficult for India to control the expansion of China's influence in India's neighbourhood.
    • China Nepal Economic Corridor can lead to China dumping consumer goods through Nepal which will worsen India’s trade balance with China further.

Way Forward

  • India must not deny every Chinese investment in infrastructure because of the China Pakistan Economic Corridor (CPEC).
    • The corridor provides a likelihood of greater tourism and people to people contact which is important for bridging the trust deficit that exists today between India and China.
    • It will also lead to the rapid development of one of the poorest regions in the world which lie in Nepal and parts of northern and northeastern India.
  • Nepal has sought to increase connectivity with China since a blockade along its border with India resulted in several months of acute shortage of fuel and medicine in 2015 and 2016.
    • Though India has all the rights of such blockades, however, India must refrain from such blockades as it affects India's credibility in the eyes of Nepali citizens.
    • India should act as a bridge rather than a blockade in realizing Nepal's dream of becoming a land-linked country from a land-locked one.
  • Given the importance of ties with Nepal, often romanticised as one of “roti-beti” (food and marriage), India must not delay dealing with the matter, and at a time when it already has a faceoff with China in Ladakh and Sikkim.
  • Since the free movement of people is permitted across the border, Nepal enjoys immense strategic relevance from India’s national security point of view, India should work towards ensuring stable and friendly relations with Nepal.


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