Chinese Ambassador to Nepal Chen Song’s remarks regarding the trade of electricity and other goods between Nepal and India as well as the economic growth of Nepal’s southern neighbour have ignited a controversy.

Addressing a discussion titled ‘China in global economy and its impact in Nepal’, organised in Kathmandu on Saturday by the Foundation for Trans-Himalayan Research and Studies and Friends of Silk Road Club Nepal, the Chinese ambassador said: “Unfortunately, you have a neighbour like India, but fortunately you have a neighbour like India, because India is a huge market with huge potential you can tap in to.”

He added: “But at the same time, India's policy towards Nepal and other neighbours is not so friendly and not so beneficial to Nepal. So we call that policy of constraints.”

Sources at the Ministry of Foreign Affairs said that the Indian Embassy has taken up the matter with the ministry, but top officials are clueless about how to respond.

There are calls to protest the statement by the Chinese ambassador against another neighbouring country of Nepal.

Foreign Minister NP Saud told the Post that the ministry has taken the Chinese envoy’s statement into notice.

“When the Nepal government formulates your economic policies, you have to take your decisions under those circumstances,” the ambassador said.

“It’s not because of the opening of the door of China that China’s economy is booming. It’s because we have a very solid foundation, because almost at the same time, India also opened its door, but we did not see any economic boom in India. Only in recent years, we see that India’s economy is starting to soar.”

Some diplomats and foreign policy observers say the Chinese ambassador’s statement violates diplomatic norms and has unnecessarily stirred controversy over Nepal’s relations with neighbouring countries.

“I read the statement made by the Chinese ambassador,” Arun Subedi, who served as foreign relations adviser to former prime minister Sher Bahadur Deuba, said. “The [Pushpa Kamal Dahal] government should send a diplomatic note and protest the remarks.”

The Chinese ambassador also compared Nepal’s trade with India which some government officials find “out of context and uncalled for”.

“The question is what our response would be if the Indian ambassador was to make a similar statement,” said Subedi. “The government is silent as the remarks come at a time when China conspicuously refused to use the new map of Nepal while showing its territory.”

The Chinese ambassador’s statement was undiplomatic, an official at the prime minister's office said, requesting anonymity. “He cannot make such comments on the internal affairs of Nepal. Nor can he comment on our relation with another neighbour that we are hugely dependent on.”

“Last fiscal year, you exported Rs10 billion [worth] of electricity to India. How much did you import from India? My Nepalese friends, you imported Rs19 billion of electricity from India. You had a deficit in electricity trade, one of the products you are proud of, and you think that will bring you economic independence,” the ambassador can be heard saying in the video widely circulated on social media.

Some Indian foreign policy observers said that Beijing is once again meddling with New Delhi’s affairs in the neighbourhood.

“China-India relations failed to normalise, so Beijing is back at poking Delhi in the neighbourhood,” Constantino Xavier, a fellow in Foreign Policy and Security Studies at the Centre for Social and Economic Progress (CSEP) in New Delhi, writes on the social network X, formerly known as Twitter. “The Chinese ambassador portrays India as an obstacle to Nepal’s development. Also lectures Nepal on how to run its economy, create ‘equal social structure’ and accept the ‘BRI gift’.”

The Chinese envoy also drew comparisons between Nepal and India’s trade in areas other than power.

“In the first month of this fiscal year, do you know how much cereals Nepal imported from India? In one month, not in one year,” the Chinese envoy asked, mentioning that the country imported cereals worth Rs7 billion from India.

“So multiply by twelve so each year you import Rs100 billion worth of agricultural products from India. So I will say that the Nepalese government put a priority on the agricultural sector. That is very important.”

The ambassador then commented on Nepal’s performance in the industrial sector. “Also you don’t have very strong industrial bases. Your manufacturing sector has been shrinking from 14 percent of GDP now to below 10 percent.”

He said Nepal is importing every industrial product from India, China, and from around the world, but not producing anything in the country.

“So one of the issues Nepalese politicians, leaders, and friends say during our meetings is that Nepal has a huge deficit in trade with China,” the envoy said.

He said the Chinese welcome Nepal to export products to China. “But the problem is that you’re not producing any, not any agricultural products, not any industrial products.”

Former Nepali ambassador to Denmark Vijay Kant Karna said the Chinese ambassador crossed the diplomatic line by commenting on Nepal’s internal affairs.

“His statement is undiplomatic. It also shows the Chinese are seeking ‘some say and share’ in Nepal’s foreign policy conduct,” said Karna.

“Why are they posturing so aggressively? In my personal observation, the Chinese side has maintained very hawkish and aggressive behaviour in Nepal after the visit of the Chinese President to Nepal, which we never found in other South Asian nations.”

Karna went on, “During the visit, there was an agreement to elevate the bilateral relations to strategic partnership, but what does that mean and entail? From the MCC [the US-funded project] to this episode, why are the Chinese making unwarranted comments on Nepal’s internal affairs?”

Noted lawyer Bipin Adhikari, however, thinks that the Chinese envoy has spoken Nepal’s reality. “It may be undiplomatic, but whatever the Chinese ambassador has said, he has spoken the reality. It seems he is speaking in Nepal’s interest,” Adhikari wrote on X.

Meanwhile, the International Relations and Tourism Committee of the House of Representatives is going to discuss the matter in its meeting scheduled for Wednesday.

The committee has called a meeting with Foreign Minister Saud to discuss the upcoming foreign visits of Prime Minister Puhspa Kamal Dahal, according to a notice issued by the committee. Prime Minister Dahal is scheduled to visit New York to attend the 78th session of the UN General Assembly. He will also remain busy in other engagements on the sidelines of the UNGA that kicked off in New York on Tuesday night.

Leading a delegation, the prime minister will leave for New York on September 16 from Kathmandu. After completing his engagements in New York, the prime minister will embark on an official visit to China on September 22 directly from the US.

The visits of prime minister to New York and China, and some of the latest issues like China’s denial of using Nepal’s updated map issued in 2020 and the statement made by the Chinese ambassador, among others, will be discussed in the meeting where the committee will seek the position of the government of Nepal on these issues, Chairman of the committee Raj Kishore Yadav told the Post.