From yam to bridgeChina’s One Belt One Road initiative presents great opportunities for Nepal due its strategic location
The One Belt One Road (OBOR) initiative promoted by Chinese President Xi Jinping has received an affirmative response from partner states including Nepal. The initiative is comprised of policy coordination, transportation connectivity, enhanced trade relations and financial cooperation in addition to people-to-people contact between the countries; and Nepal enjoys special advantages in this regard.
China borders five of the eight South Asian countries—Afghanistan, Pakistan, India, Nepal and Bhutan—along its Xinjiang and Tibet autonomous regions. The region is a gateway for China’s ‘Western-oriented opening up’ and starting point for the westernward ‘corridor development’.
Nepal’s strategic location is a geographical advantage for the country. Since China does not have diplomatic ties with Bhutan, the 1,415-km Nepal-China border is a major bridge between China and South Asia. Nepal offers 184 of the 312 passages linking Tibet with South Asia. Moreover, Nepal is also the hub for China-South Asia cultural and religious exchanges. Cultural exchanges between China and Nepal going back more than 2,000 years which led to the spread of Buddhism across the Himalaya provide a sound foundation for people-to-people contact under the OBOR framework. Further, Nepal’s peaceful coexistence and non-aligned foreign policy is in line with China’s ‘independence and autonomy’ policy. The rise of Asia is going to define the 21st century, and even China-India relations have been developing at both government and people-to-people levels.
Sandwiched between China and India, Nepal receives much attention from the West, particularly from the US and Europe. The US intensified its involvement in Nepal in the name of efforts against terrorism after the September 11 incident. This is intended to, one, push Indo-US relations in a direction that serves US interests; two, strengthen the encirclement of China by using ‘Tibetan independence’ elements and enhance US influence along the border; and, three, use intelligence and surveillance facilities to monitor developments in South and Central Asia and neighbouring regions. The OBOR initiative, which is characterised by harmony, equality and win-win cooperation, will increase Nepal’s weight in reaching a balance with all the players. Europe is also using its NGOs to enhance its influence in Nepal while Japan is trying to make use of its status as a former number-one investor in Nepal for its own interest.
Regionally, the reluctance of India and abnormal China-India-Nepal trilateral relations constitutes another roadblock. Being the most important external influence in Nepal’s politics, India has openly declared its ‘special interest’ in Nepal. China-India-Nepal trilateral relations did not develop in a healthy way. Politicians and scholars from the three countries have a different understanding of the ties, and they attached a different or asymmetric importance to the relationship. A low level of political trust between China and India offers Nepal an opportunity to develop ‘equidistant’ diplomacy toward its two major neighbours. Also, Nepal has changed its national government seven times in the eight years since 2008 when it became a federal republic.
Points for the Chinese
Despite such disadvantages, this is the best time to develop China-Nepal relations. The OBOR initiative provides a good opportunity towards this end. Let’s help Nepal establish itself as a ‘peaceful and neutral state’ and thereby eliminate the risk of being sacrificed as a battlefield for big power games. A strict differentiation of relations with the neighbours and with others is needed. Strict ‘neutrality or being at equal distances’ from China and India is needed and a policy of ‘not choosing sides’ needs to be encouraged. China needs to value Nepal’s geostrategic location as not only a bridge between China and South Asia but also a ‘safety valve’ for Asia.
China is advised to stick to a policy of not interfering and not allowing external interference in Nepal’s domestic affairs. This will help contain ‘Tibetan independence’ elements and eliminate potential threats with the establishment of a China-Nepal border region free of such activists. India might be encouraged into agreeing to China’s entry into the South Asian Association for Regional Cooperation (Saarc) which will, in turn, support its diplomacy in the Indian Ocean region. This will also help Nepal in enhancing its relations with Central Asian states so as to help alleviate its energy thirst.
China needs to actively participate in the reconstruction process in Nepal as it is the key to China’s engagement in South Asia. As a landlocked and one of the least developed countries, Nepal might achieve rapid development from the connectivity offered by OBOR. This will provide an example to other countries. The transit economy will also help the development of a China-Nepal-India economic corridor, Bangladesh-China-India-Myanmar (BCIM) and China-Pakistan Economic Corridor (CPEC). China should consider supporting the implementation of Nepal’s new constitution by providing training to law experts and law enforcement personnel along with equipment aid.
Nepali politicians and traders are concerned by the large trade deficit with China despite rapid development in bilateral commerce in recent years. From a long-term perspective, the trade deficit is not in China’s interest either. Nepal expects an expanded trade preference arrangement and desires Chinese investment in Nepal to produce commodities which can be exported to China (particularly to Tibetan communities along the border) or South Asia. This will encourage direct investment by Chinese enterprises in Nepal and enhance China-Nepal economic cooperation with the use of complementary economic resources. China could consider improving market access for commodities as proposed by Nepal.
Nepal is rich in tourism resources, but the services being provided by Air China, China Eastern Airline and China Southern Airline in Nepal can hardly meet the expanding needs of tourists. Priority should be given to expanding road and transportation facilities, improving tourism routes and reducing ticket prices to a level that is affordable for middle-income tourists. Currently, we are talking about the trans-Himalayan cooperation mechanism that should be transformed from Track 2 to Track 1, that is, a regional cooperation organisation.
Tao is executive director, Institute of South Asian Studies, Sichuan University