Nepal’s Prime Minister Pushpa Kamal Dahal embarks on a four-day official visit to India on Thursday, at a time when the geo-strategic maneuvers between India and China are fast heading towards a potentially hostile climax. For Nepal, which sits at the middle of this Asian strategic axis, the traditional cliché of ‘balanced diplomacy’ is unlikely to be redundant any time soon, particularly in the light of China’s new-found assertiveness as the second most powerful nation in the world. China has also firmly set its stage to be a crucial player in South Asia, too, while India appears resolved to compete rather than cooperate with China in this game of influence. If Dahal realises the complex fallouts of Chinese assertiveness and Indian annoyance in regional trade-offs, it could be a fresh point of departure in Nepal’s diplomacy.

For better or worse, Chinese assertiveness is likely to rule the roost in regional geo-politics. Indications are aplenty. During 11th G20 Summit in Hangzhou, Chinese President Xi Jinping exhibited confidence, perhaps as never before, to assert China’s role as the second most powerful country in the world. He warned (erstwhile?) rich Western countries to ‘stop empty talk’ and deliver on the promises they made to the rest of the world. He asked its competing neighbour and another emerging global power, India, to come up with some ‘concrete big projects’, ostensibly, in response to Indian reservations against Chinese investment in the ambitious $46 billion China-Pakistan Economic Corridor (CPEC) project. China’s $12 trillion economy is already the world’s second largest, and three of the top five Forbes Fortune 500 companies are Chinese. Even by the most pessimistic estimates, its GDP will grow by at least 6.5 percent this year, which means the economy will swell by another $800 billion.

In the balance

China’s new assertiveness is manifested in three distinct approaches: One, despite being officially a communist country, China has not only sailed through the tides of globalisation but has also tried to redefine it as a tool to turn the 21st century into an ‘Asian Century’, implying that Asia is under undisputed Chinese influence. The departure point to such influence seems to be China’s claim to territorial sovereignty over the South China Sea. Two, China wants to use its historic Silk Route economic diplomacy, reincarnated as one-belt-one-road (OBOR), as a multi-pronged weapon to expand its market access to West Asia, Europe and Africa, mainly by avoiding the overcrowded Malacca Strait bottleneck. The CPEC is one of its crucial components. Three, the communist regime is putting all its efforts into ensuring regime security. In addition to traditional Tibet and Taiwan distractions, anti-Beijing protesters have won quite a number of seats in the Hong Kong legislature and Uyghur protests in Xinjiang province have been continuing for about a decade now. Evidently, China sits on a political volcano, and is determined to prevent even the slightest puff of air, which demands democracy or political freedom, from seeping into any corner of the country.

China’s new proactive strategies are a clear departure from the unidirectional pursuit of the past to capture global markets by flooding them with goods at unbeatable prices. And this change has generated equally strong global reactions and fallouts. For example, immediately after the G20 Summit on September 5, US President Barak Obama flew to Laos to address the summit of the Association of Southeast Asian Nations (Asean) on the theme of his ‘rebalancing’ diplomacy in Asia Pacific, which meant countering China in the South China Sea. Indian Prime Minister Narendra Modi registered his dislike for China’s engagement with Pakistan through CPEC. Both Japan and India are on the same plank with Obama on the issue of the South China Sea. China-related phobia, paranoia and proclivity to complain are now the mainstay of global, regional and sub-regional diplomacy.

How much are the politics of parleys, pressures and protests likely to change China’s modus operandi and preferences? Perhaps very little. One, the world has not fully comprehended how China sets its objectives and formulates its strategies. Two, it now stands on very solid economic fundamentals. And three, it has pressing compulsions to stick to all three strategies to ensure political stability at home and work to prolong the one-party communist rule as long as possible.

Growing giant

In 1985, exports and imports of goods and services between the US and China were about equal in either direction, which totalled approximately $3.8 billion. A very interesting facade to this trade was that all US policies were directed at not letting the Chinese take over the entire US market. But in 2015, the US trade deficit with China hit $367 billion. The US could export merchandise worth only $116 billion against imports of $483 billion. Similarly, India suffered a trade deficit with China of $53 billion in the last fiscal year. Before the Indian economy was liberalised in 1991, India’s exports to China totalled a mere $18 million while imports amounted to $31 million. Currently, China has a trade surplus with about 128 countries.

These figures establish the fact that despite efforts by these countries not to succumb to such huge losses, China persistently pushed into their markets undeterred by lashes and roadblocks. China’s GDP per capita has now reached $12,000, and with its increased economic and military might, it is safe to suggest that it is more unlikely to yield to pressures and tactics designed to scuttle its geo-strategic ambitions, more specifically at the regional level. South Asia is one of these regions that is likely to see friction between a resurgent China and an apprehensive India. The main bone of contention is the CPEC. This corridor passes through the Gilgit-Baltistan area of Pakistan-occupied Kashmir and reaches the newly developed Gawdar port in the restive Baluchistan region. But China is not likely to forsake CPEC which is being promoted as a crucial component of OBOR. India, too, seems determined not to let the project be completed.

A boxing ring

There are additional irritants. China is a major stumbling block to India’s bids to join the Nuclear Suppliers Group (NSG) and become a permanent member of the UN Security Council. Chinese diplomats privately say that if India doesn’t want China to become a member of even a poor man’s club like Saarc, how can it expect them to cooperate in India’s bid? Fortunately or unfortunately, Nepal is located in the middle of these two giants, both of which are presently in an unrelenting mood. It is also important to see how Indian policy towards China emerges in the near future.

For now, there already are indications that Nepal is literally becoming a boxing ring for the two. Ideally, Nepal should have been in a position to take advantage of this competition, with appropriately customised foreign policy reflecting present realities. Nepal’s best policy would be to prevent the country from being turned into a board for their strategic ‘chess game’ or to present it not only as a fighting platform but also as a referee. The question is whether Nepal is diplomatically prepared for all these eventualities. Can Dahal offer suitable proposals to his Indian counterpart to this end during his sojourn to New Delhi ?

Wagle, a former editor of the economic weekly Arthik Abhiyan, is an eco-political analyst