Nepal and China enjoy a long, deep-rooted and illustrious history of friendship, cooperation and exchanges. The bilateral friendly relationship has been developing from strength to strength after the establishment of diplomatic relations in August 1955 and has reached a new height in recent years. China is one of the world's first civilisations and was one of the world's foremost economic powers for most of the two millennia until the beginning of the 19th century.

Today, China has again emerged as the world's largest economy by GDP at purchasing power parity, and the second-largest economy by nominal GDP. This unprecedented rise has contributed to China becoming the single largest market source for global outbound tourism and is ranked as the world's largest per capita spender in tourism in 2017. Nepal-China relations have always remained trouble-free and cordial. Three fundamental pillars of bilateral relations, namely cultural, political and economic, have been growing steadily since millennia.

Core interest

China has relentlessly and unambiguously supported Nepal’s core interest in upholding its independence, sovereignty and territorial integrity since the establishment of the People’s Republic of China. China has continued to support Nepal’s development endeavours through government channels without intervention in its internal matters. Nepal and China are enhancing mutually beneficial cooperation, upholding the two countries' strategic partnership of cooperation featuring ever-lasting friendship for development and prosperity.

Nepal, for its part, shows unflinching commitment to China’s core interest and attaches great importance to its relations with China, and resolutely adheres to the One China policy; Taiwan and Hong Kong as inalienable parts of China; and Tibet and Xinjiang affairs as China’s internal affairs; and firmly supports China in safeguarding national sovereignty and territorial integrity. Nepal will not allow any anti-China activity on her soil. Relations between Nepal and China became more robust when the two countries solved all border disputes by signing the Sino-Nepal boundary agreement on March 21, 1960, making Nepal the first neighbouring country of China to agree to and ratify a border treaty with China.

The Covid-19 pandemic has exposed the governance capabilities of all countries in the world. Despite its large territory and population, the Chinese government was very successful in mobilising the entire state machinery and all possible resources in this battle, proving to be the most effective governance in emergencies like the pandemic.

The pandemic has changed the way of life of citizens around the world, and exposed the vulnerabilities and weaknesses of emergency response mechanisms in developing countries like Nepal. China played a vital role in saving lives during the outbreak and extended extensive cooperation globally, including Nepal. China provided the largest quantity of Covid-19 vaccines and life-saving supplies to Nepal and emerged as a genuine, reliable and generous friend in weal and woe. China’s continued cooperation in tourism, investment and trade is of paramount importance for the recovery of ailing economies in the post-pandemic era. The two countries also maintain close communication and collaboration in international and regional affairs aiming to achieve mutual benefit, regional stability and common development goals.

Chinese financial and technical assistance to Nepal is critical to its development efforts in the areas of, particularly, physical connectivity (railways, information ways, airways, pipelines, highways and cross-border energy and tourism), human resources development, health, education, water resources and sports. Nepal also intends to receive China’s support in tourism, investment, trade and productive capacity. Nepal hopes to receive continued support from China on territorial integrity, sovereign independence and peace and stability.

China expects Nepal to support its major issues including Tibet, Taiwan, Hong Kong and Xinjiang, and wants Nepal to maintain social stability, political neutrality, and most importantly, maintain independence in decision making. However, due to the undue concern of external powers about China’s role in Nepal’s development efforts, safeguarding the common interests remains a huge challenge for Nepal.

China-Nepal relations have been growing in a consistent, steady and healthy manner, which sets a model of peaceful coexistence between countries of different sizes. However, all South Asian Association for Regional Cooperation (SAARC) countries, except Bhutan, have been able to gain more advantage than Nepal from China’s enormous development. Nepal lacks the proper approach, consistency and ability to make decisions in time and convey her development interests and priorities consistently because of political instability.

Therefore, political consensus on fundamental issues and development cooperation policy with clarity of purpose is imperative to achieve stability and rapid economic development. Nepal should prepare a roster of priority projects and programmes with a predictable policy regime with commitment and consistency on funding modality. Proper execution of the plans of the projects and programmes is equally critical for receiving substantial development cooperation from China. There is also a need to constitute a high-level mechanism with full executive power to resolve issues for speedy implementation of the projects and programmes.

Way forward

Socio-political stability and prosperity in Nepal and China is the mutual interest of both countries. The two sides should continue to adhere to good neighbourly relations and deepen win-win cooperation, so as to achieve mutual benefit and pursue stability and development. As Chinese logistic infrastructure is highly efficient with up-to-date facilities for transit, Nepal should benefit by connecting with Europe; Southeast, North and Central Asia and the Middle East via China. Connection to the outside world is only possible through the Chinese railway network. Therefore, railway connection should be taken as a precursor of all types of connectivity. Nepal should further upscale cooperation in various fields of trade, tourism, investment and capacity of production as there seems to be immense potential opportunities to boost the economy and enhance people’s wellbeing.

In order to jointly pursue common prosperity and dedicate themselves to maintaining peace, stability and development in their respective countries and the region, the way forward for Nepal-China relations could be through strengthening mutual political trust, dialogue, exchanges and understandings, and extending mutual support to each other's core concerns, sensitivities and interests.

This can be done by intensifying the implementation of the agreements and memorandums of understanding, including BRI; by prioritising the connectivity and socio-economic development endeavours under the broader theme of the trans-Himalayan multidimensional connectivity network to secure common prosperity, regional peace and development; by speeding up the construction of cross-border railways in order to develop Nepal from a landlocked to a land-linked country; by activating all bilateral consultative mechanisms (joint commissions and working groups) for promoting relations in culture, trade, investment, power and the economy; and finally by strengthening cooperation at the United Nations and intergovernmental platforms for safeguarding common interests, collaborating in regional issues and supporting each other on matters of mutual interest for maintaining regional peace and stability.