The geopolitical rivalry between Beijing and Washington played out in real time in Kathmandu on Tuesday, as officials from the two powers held near parallel meetings and sent pointed messages to the Nepal government.

The overlapping diplomatic outreach by Beijing and Kathmandu brought to mind tensions last seen during the 2022 ratification of the US Millennium Challenge Corporation (MCC) Nepal Compact. At a time when Kathmandu was hosting US Assistant Secretary of State Samir Paul Kapur, a senior diplomat from Beijing was also in town and meeting senior government officials on Tuesday.

Hours after Kapur concluded his meeting with Foreign Minister Shisir Khanal and Finance Minister Swarnim Wagle, Deputy Director General at the Department of Asian Affairs at China’s Ministry of Foreign Affairs, Cao Jing, held talks with Foreign Secretary Amrit Bahadur Rai and Joint Secretary at the North East Asia Division at the Foreign Ministry, Bhrigu Dhungana. Cao reiterated concerns that Beijing has been raising with Nepal for quite some time. Cao flew from Beijing to Kathmandu only on Monday, coinciding with Kapur’s visit.

“The meeting between the foreign secretary Rai and Cao is a regular one, regular desk work and follow-up on the matters and agendas between Nepal and China,” said Lok Bahadur Poudel Chettri, spokesperson at the ministry.

However, sources privy to the meeting say otherwise. They say Cao raised several issues related to Washington, DC, while also inviting Khanal and Rai to visit China.

In her talks with Rai and Dhungana, she cautioned them about the possible ramifications of the MCC Compact, urged Nepal not to join the US State Partnership Program (SPP) — which has already been rejected by the Nepal government in 2022 — and not to be a part of the Starlink satellite network, owned by the US billionaire Elon Musk, an official told the Post.

The MCC has set an August 2028 deadline to wrap up its two projects in Nepal, and if they are not completed on time, the deadline can be extended by another year.

Ahead of Cao’s meeting with Khanal, Assistant Secretary Kapur, besides seeking to enable the climate for US foreign direct investment, also raised the issue of identity cards for Tibetan refugees living in Nepal.

While appreciating Nepal’s generous support for Tibetan refugees, Kapur asked officials to issue identity cards to the refugees so that they come under the tax net. The refugee community has reported difficulties with doing business, opening bank accounts, accessing education, and engaging in economic activities.

In a brief comment, Khanal told the Post that he communicated the sensitivity of the Tibetan refugee issue to Kapur, as it concerns Nepal’s northern neighbour. Khanal reportedly told Kapur that the Nepal government is doing its best for the welfare of refugees. “We are hosting them on humanitarian grounds and will continue to do so,” the minister told the visiting US official, according to officials.

During his visit to Bauddha, Tibetan monks welcomed Kapur to the Bauddhnath Stupa on Tuesday. He had lunch at a Bauddha-area restaurant.

On Wednesday, even before Kapur had wrapped up his visit, the Deputy Chief of Mission at the Chinese Embassy, Zhou Pan, met joint secretary Dhungana, who is in charge of the China desk at the Foreign Ministry, to register reservations about Kapur’s statement on the issuance of identity cards to Tibetan refugees.

On Tuesday, Kapur had asked Khanal to address Tibetan refugees’ longstanding grievances. Nepal has stopped issuing new identity cards to Tibetan refugees since 1995. The issue resurfaces during each and every high-level visit from the US, especially during talks with home and foreign ministers and officials.

It is not known whether Zhou submitted a written protest to the foreign ministry against Kapur’s statement or only raised concerns verbally. Neither Dhungana nor Zhou responded to multiple phone calls made by the Post.

Kapur had brought up the refugee issue just a week after the Chinese ambassador to Nepal, in a meeting with then Home Minister, Sudan Gurung, had expressed strong reservations over Tibetan refugees’ activities in Nepal.

Cao raised similar concerns with Rai and Dhungana. She cautioned both officials against attending the swearing-in of the Tibetan government-in-exile in Dharamshala, India, scheduled for May 27, and sending any congratulatory message to the new government.

Penpa Tsering, who was re-elected Sikyong, or the leader of the Tibetan government-in-exile, in February for a second five-year term with over 60 percent votes from Tibetans in exile, is set to be sworn in that day.

With foreign secretary Rai, Cao also discussed inviting Foreign Minister Khanal to China at a convenient date. Similarly, she also stated that time has come to hold the 17th round of Nepal-China bilateral consultative meeting in June. “It’s China’s turn to host the meeting, where the entire gamut of bilateral relations will be discussed. No date has been fixed, but tentatively both sides are preparing to convene in June,” a foreign ministry official said.

“They [the Chinese] are more concerned about growing engagements between the US and Nepal rather than pushing their own agendas, like projects under the Belt and Road Initiative (BRI), and implementation of past accords and agreements.”

There are rumours circulating in mainstream and social media about the MCC staying beyond August 2028, if the two ongoing projects are not completed by the deadline. But according to a senior official at Millennium Challenge Account-Nepal (MCA-Nepal), the Nepali body implementing the MCC projects, MCC headquarters is yet to formally communicate term extension.