On the last leg of a nation hopping tour in South Asia—Pakistan, Afghanistan and India—Chinese State Councillor and Foreign Minister Wang Yi spent 48 hours in Kathmandu from March 25-27. This official visit takes place only a month after the ratification, despite China's utter dislike, of a $500 million American grant assistance under the Millennium Challenge Corporation (MCC) by Parliament, a deal Beijing has labelled a potential Pandora's Box for Nepal.

There was widespread apprehension that the parliamentary passage of the MCC, which China views as part of America's Indo-Pacific Strategy designed, putatively, to strategically "encircle" it, might have severe implications for its approach in its relations vis-à-vis Nepal. There was also speculation among the Nepali ruling elite that China would now more forcibly pressurise Nepal to take forward the implementation plan of the Belt and Road Initiative (BRI) Framework Agreement that the two countries signed in May 2017. The deal is literally hanging in limbo in the absence of a plan. An implementation agreement between the parties can only thrash out the issues surrounding the selection of projects and their priorities, sources of the budget, modalities and cost of financing, human resource management, supervision and monitoring of the selected projects and succession plans and sustainability of the same.

Reactive posture

But nothing concrete regarding the BRI transpired during Minister Wang's visit. Instead of appearing bullish in expectations, Wang's diplomatic demeanour this time around seemed to be more inclined towards "controlling" damage in relations caused by Beijing's reactive posture on the MCC and its ultimate failure to prevent it from getting parliamentary approval. This time around, his entire South Asia tour reflected that pattern.

His visit to Pakistan, which China calls an all-weather strategic partner, to address a conference of Islamic countries was meant to win the sentiments of the Muslim world as the latter is drawing flak from the West for its alleged brutal treatment of Uyghur Muslims back home; right across the region bordering Pakistan and Afghanistan. A visit to Kabul to pat the back of the Taliban government was to show the United States that the incumbent Afghan government has some friends. Wang's visit to India, which is termed as not invited but "forced" by some sections of the Indian media, was to shed some "frost" in the relations that had gathered since the 2020 Galwan Valley skirmishes between the two countries. China is reportedly keen to invite Indian Prime Minister Narendra Modi to the BRICS (Brazil, Russia, India, China and South Africa) summit scheduled for June.

In a nutshell, the Wang diplomacy of "engaging despite odds" not only in Nepal but with all the other neighbours he visited, at least in format, tried to cultivate an image of a tolerant, magnanimous, flexible and accommodating China in a fashion that suitably corroborates its position as the world's second most powerful country and its ambition to enhance global influence to the next level.

In Nepal's case, at one point in time, it appeared as if any bilateral cooperation with China—economic, cultural, diplomatic and others—would only be possible under the larger umbrella of the BRI. But during the current visit of the Chinese delegation, the two countries could not sign any concrete agreement to further the BRI, particularly the BRI Implementation Plan, but signed or exchanged nine cooperation agreements/documents that don't necessarily link to the BRI "project". Of course, some exchanges among them, like the minutes of the meetings, are only valedictory; but some others, such as an agreement to carry out a detailed feasibility study of the much-debated Kerung-Kathmandu 72-km railway line, are ultimately sure to be part of the BRI sooner or later.

Despite all the tall talk of mutuality and cooperation, Nepal is facing an almost economic embargo-like behaviour from Chinese authorities right since the 2015 earthquake and later under the pretext of adhering to Covid-19 protocols. The movement of cargo containers across two key land transit points, Rasuwagadhi and Tatopani, has been limited to four-five lorries per day (less than 10 percent of the normal flow) for imports from China. And exports from Nepal were reduced to almost nil, and the movement of Nepali traders was made excruciatingly difficult. The issue remains unresolved despite several assurances to support a return to normalcy. Even during this visit, Nepal urged the Chinese side to remove such non-tariff barriers at these two key customs points.

Among other outstanding issues, the suspected border encroachment by China in the remote western district of Humla was raised by the Nepali side. Still, it could not make it to the "official agreement" and only found a mention in the press release from Nepal's Ministry of Foreign Affairs: "Underlining the importance of continuously maintaining Nepal-China border peaceful and tranquil in the spirit of the Boundary Treaty, the two Foreign Ministers agreed to carry out joint inspection of Nepal-China boundary through mutual consultation."

Frequent calls

Lately, China was perceived to have cultivated more intense "brotherly" relations with the major communist parties of Nepal, clearly, at the expense of state-to-state sovereign engagement. This became more apparent recently by the frequent calls from Chinese Communist Party leaders to Nepali communist top hats when political opinion was vertically divided regarding the MCC with some for and others against it. It gave the impression that China was more interested in placating some chosen communist outfits of Nepal than consolidating official diplomatic relations.

China's objective in sending Foreign Minister Wang on an official visit immediately after the MCC ratification was undoubtedly to reaffirm that party-to-party "communist brotherhood" is no substitute for the sanctity of sovereign bilateral relations. It is difficult to claim how successful Minister Wang was in achieving this objective, but he certainly has made a meaningful stride in the right direction. The Chinese establishment must also have realised the futility and perils of deviating to ideologically inclined engagement instead of sticking to the classical "non-aligned" and "non-interference" modus operandi in neighbourhood diplomacy. Regardless of what happened in the past, Nepal-China relations are bound to reset, specifically, in the post-MCC context.