Diversifying trade with China is the need of the hourPrime Minister KP Sharma Oli is on a seven-day official visit to China. The visit comes on the heels of a gradual improvement in Nepal’s relations with India.
Prime Minister KP Sharma Oli is on a seven-day official visit to China. The visit comes on the heels of a gradual improvement in Nepal’s relations with India. Nepal-India ties were strained following the promulgation of Nepal’s constitution in September last year—resulting in a border blockade and subsequent shortages of essentials, including fuel. This had forced Nepali leaders to look towards China as a way to reduce Nepal’s dependence on India. Mukul Humagain and John Narayan Parajuli spoke to former Nepali Ambassador to China, Tanka Karki, about Nepal-China relations, Chinese perceptions of Nepal, Oli’s priorities and the agendas that Nepal should pursue.
What in your view is the most important basis for Nepal-China relations?
Since times immemorial the two countries have shared close ties. If you believe in folklore, people-to-people relations between Nepal and China began with Manjushree. The relation strengthened after the rise of Buddhism. From the 5th century there has been documentation of people from both the countries travelling across each other’s borders. Diplomatic relations existed between the two countries since the 7th century. The principles enshrined in the Panchsheel Treaty of 1955 between Nepal and China truly capture the essence of the relations we share—mutual respect for each other’s territorial integrity and sovereignty, non-interference and non-violence—which both the countries have sincerely abided by.
What agendas do you think PM Oli should be pursuing during his visit to China?
Now that we have decided our political system, economic development is our main agenda. There are plenty of untapped resources in the country, but we lack the capital and technological know-how to exploit them, making us dependent on other countries.
In the past Nepal has depended on India for most of its trade. We have an open border with India on three sides, but only two open trade points with China. Such an arrangement has created problems for us every time we have had a conflict of interest with India. India has time and again employed an economic blockade as an instrument to control Nepal. Therefore, as a landlocked country it is imperative for Nepal to diversify its trade with its northern neighbour. For this more trade points need to be opened. So PM Oli needs to secure a trade and transit agreement with China. An agreement for the supply of petroleum products is also equally important.
Moreover, as China is the world’s second largest economy, we should be able to attract Chinese foreign investments. By using the Chinese money to harness our resources and then exporting them to India, we can actually create a basis for trilateral cooperation. This agenda, which has already been raised during Indian PM Modi’s visit to China in 2015, should be discussed in Beijing. It should be made clear that Nepal has no objection to such an arrangement. PM Oli should clarify that Nepal has no intention of playing one neighbour off against another and simply wants the development of all the three countries.
You were serving as an ambassador to China when President Xi took office. During that time he initiated the Look East policy. Where does Nepal fall in this policy?
For China, of course, Nepal is important because of the 1,400-kilometre long border that Nepal shares with Tibet Autonomous Region. This is the most sensitive area for the Chinese in terms of security. So Beijing wants to maintain good relations with Nepal. But in today’s age, economic development and capabilities matter the most in international relations. China believes in growing peacefully—a belief that does not follow a zero sum game like in the colonial times. It does not want to threaten its neighbourhood or the rest of the world with its rise and instead wants other countries to benefit from its growth, especially the immediate neighbours including Nepal. So the Chinese are connecting Nepal to the ‘one road one belt’ initiative through the Shigatse Railway Service.
Moreover, Nepal has always supported and respected China and its policies in the international arena. Nepal firmly stands for a One China policy, so the Chinese do not doubt our friendship.
How about the friendship on a more people-to-people level?
The common people in China refer to Nepalis as good friends. Moreover, as a large number of the Chinese follow Buddhism and know that Buddha was born in Nepal, they have a soft corner for us. High-level Chinese officials are also well-aware of Nepal and the complexities we face in conducting our international relations. Thus, they always advise Nepal not to compromise its relations with other countries to improve its relations with China. They simply assert that we should not forget China while dealing with others and not forget others while dealing with China. This is a wise advice—a result of a good foreign policy they have in place.
Going back to PM Oli’s visit, even if he manages to secure a trade and transit accord, could it just be a symbolic gesture? Does Nepal comprehend Chinese security concerns in opening up more border points with Nepal?
Nepal needs to be far-sighted and plan our policies accordingly. Obviously it will take years to open more border points with China and to build the required infrastructure. But if Nepal and China are committed to do so, the idea will eventually materialise and have a positive impact on our economy and development.
Chinese security concerns are an issue, but as long as we respect the One China policy and make sure that infiltration to Tibet does not take place from the Nepali side, the Chinese should be okay with opening more border points with Nepal. But for that we also need to strengthen our defence capabilities.
In the past, whenever a tiff with India escalated, we spoke of opening up new border points with China, but then forgot about it as soon as relations normalised with New Delhi. Is it possible that the trend will follow this time around too?
Diversifying trade routes with China is the need of the hour. Nepali people also want this. Their voice should be respected. The political leaders need to realise this and work towards it.
Why in your assessment has Nepal failed to establish stronger ties with China so far?
No doubt Nepal is partly responsible for not strengthening the relations with China. This is because we kept pursuing a foreign policy based on Cold War considerations. We kept staying away from China in the name of democracy; and we kept a distance from India in the name nationalism. That was wrong. Countries in today’s time are driven by their economic and development needs, not ideology, when they plan their foreign policy. But Nepal always gave its ideologies—democracy and nationalism—undue importance. This needs to change. Our geostrategic location is complicated but we need to maintain cordial relations with both our neighbours and work for our advantage without pitting one against the other. Even China-India relations have come a long way from the 1960s and their cooperation has significantly increased in recent years.
In recent times, China has been increasing its engagement with new political forces in Nepal like the Madhesi parties, unlike in the past when it only dealt with the traditional forces. What do you make of this?
China has always maintained the policy of dealing with the establishment. It does not care who comes to power—the Congress, communists or Madhesis. It will engage with the one who forms the government. It applies this policy everywhere around the world. But now that Nepal is adopting federalism, China might want to increase its interaction with other forces as well. The Chinese are very pragmatic when it comes to their foreign policy. But the establishment will always be the most important force for them.
Some in Nepal believe that China’s influence in Nepal’s domestic affairs is increasing. Do you agree?
The Chinese only advise. Intervention in the domestic affairs of the other countries has never been their interest. If you observe President Xi’s visits, he travels to Saudi Arabia and then to Iran; he visits India and maintains good relations with Pakistan. This proves that they believe in increasing cooperation and reducing conflicts and not interfering in other countries’ internal affairs.
In recent years a lot of Chinese investment is coming our way. How do you analyse this development?
For foreign investment to be encouraged, a secure and profitable market is necessary. But in Nepal, the environment conducive to attracting Chinese investment, or any other foreign investment for that matter, is still not there. To attract more Chinese money, we can make our investment environment friendlier. The country is in need of an economic overhaul.
Lastly, how optimistic are you about PM Oli’s visit?
Overall I believe that this trip will definitely bring a new thrust to Nepal-China relations and further improve the ties. Some tangible results might also come out of this trip. But most importantly, the Nepali side needs to project its new status and independent foreign policy.