China’s rise will help NepalIts push for a global value chain and India’s growth will both allow Nepal more opportunities.
When the Chinese Ambassador to Nepal started tweeting in June, it made the headlines and announced the arrival of risk-taking diplomats who are willing to take on a larger social media presence. I have been following the former Chinese Ambassador to India, who was very active on twitter and his tweets from the sidelines of the Wuhan Summit between Indian Prime Minister and Chinese President was very similar to how US diplomats tweet. It is very interesting to see how diplomats from a country where Twitter along with many other social media platforms are restricted use the platform in other countries. The future will only tell us whether these are steps towards opening up, or if the hypocrisy will continue.
Keeping track of what is happening in China and understanding the implications to the world is like keeping a tab of stocks in the stock market—it needs a deep understanding and a constant as well as consistent appraisal of the situation. For those who have been following the developments regarding China, they can only come to an agreement that the last five years have been transformative. The rise of Trump in the United States and his potential re-election means that China will hog the stage at every meet that talks of globalisation. They will use the tariff war to recalibrate themselves with a clear message that they are the future leaders of the global economy. In Africa, we often see that before meetings with government officials, it becomes important to watch CGTN, the Chinese international broadcast that forms the basis of the discussions of ice-breaker conversations. Unlike the past, when people used CNN or the BBC, or Al Jazeera for a short while, as their primary news source, Chinese media is gaining ground everywhere. In Europe, it is very surprising to note how people are watching the French edition of CGTN. Chinese social media platforms have expanded deeply and it is not surprising to find a paid supplement of China Daily when you buy a copy of the Wall Street Journal in New York. For Nepal, it is only a matter of time before we will see a CGTN style channel that will be in Nepali and focus not only on the Nepalis in the country but also on the larger diaspora. These moves by Chinese media are about influencing public opinion very much on the lines of what the BBC did many decades ago.
There are more books written on China than ever before but there are some that really stand out. The former European Union Minister of Portugal Bruno Macaes in his book Belt and Road: A Chinese World Order provides a picture that we all want to see to help us understand a country that has strong media restrictions. He argues about how China has been planning on sustaining its economic leadership by connecting itself with as many countries as it can. He talks about how Pakistan and Myanmar may become China’s California. He cites China’s intent on developing the Kra Isthmus Canal in Thailand that will make China less dependent on the Malacca Straits. In Africa, when the port of Djibouti was built by the Chinese, it competed with the port of Doraleh that was built by the United Arab Emirates government. Geopolitics is important. UAE eventually sold the port to China, therefore allowing China complete control over the ports. He cites that two-thirds of the world’s top sixty container ports had received some degree of Chinese investment by 2015. This speaks volumes when it comes to controlling trade and the movement of goods and services.
China also tries to promote the concept of the global value chain revolution, which means the free movement of knowledge along with goods and services. This means it will control more value chains than ever before. For instance, he argues that if the world is pushing electric vehicles, they need to realise that the core of the EV is the battery, and cobalt is an important material used in batteries today. Now the country that will control the production and sale of cobalt will be the country that will, in the end, lead the production of electric vehicles. As of now, China controls most of the production of cobalt that comes from Congo, by far the largest producer in the world. Similarly, it is trying to integrate environment sensitivities into projects as part of its comparative advantage.
When I saw that Nepal was mentioned just twice in the book, I asked the author why that was the case. He responded that he would like to write a whole book on Nepal. It does not generally strike people that Nepal is next door to China and that this country is the key link between China and India. For the next decade, it looks like the confrontation of China and India with the US will continue to grow over trade and investment. In the unlikely scenario of Trump losing the next US presidential elections, there may be some changes. But given the way the US is playing catch up in technology—especially in the communications and environment sphere—it will have to keep the tariff wars going. China and India have renewed their dialogue from where they were left off in Wuhan in 2018. Both these countries dominated the world economy until the 17th century and again will be two dominant forces by 2040. Nepal was the entrepot and key transit for trade and business between India and China. Most of the major palaces were built by the Mallas on the taxes they collected on trade and the minting of coins; because of this people had resources to engage in art, literature and culture. The advent of the inward-looking, isolation-oriented Shah kings cut off Nepal from these links. This was further exacerbated by a bankrupt East Indian Company that in the end was taken over by the United Kingdom directly. Nepal once again has the opportunity of leveraging the growth of its neighbours. Of course, for this, perhaps, the focus should come from the highest levels of government, bureaucracy, businesses and academia.
Shakya tweets at @sujeevshakya.