The so-called Nepali nationalists must be greatly disappointed by the way Nepal-China relations are currently being discussed in Kathmandu. Most media reports read as if Kathmandu has rejected assistance from China that could have been used to overcome many problems like underdevelopment, unemployment and even economic dependency on India. The Nepali intelligentsia and even the general public read those media reports and started criticising the government for not being able to implement the Nepal-China agreements signed last year during KP Oli’s visit to China. 

Chinese officials based in Kathmandu and also those in China have expressed a similar opinion. As a result, the non-implementation of Nepal-China agreements has become an established public belief in Nepal. Hence, it has become a tough issue for politicians and bureaucrats to deal with. 

One might have noticed that China has been pushing Nepal to help initiate a new project, the One Belt One Road (OBOR) initiative. Generally speaking, there is no harm in helping an immediate neighbour like China in its long-term strategy to create prosperity. However, the way the Chinese side has been trying to push Nepal into signing the deal has helped to create anxiety on the Nepali side. In fact, China has been reluctant to implement many aspects of the agreements signed last year, but it continues to press Nepal with regard to OBOR only. If the agreements signed between Nepal and China during the official visit of KP Oli are followed, the Chinese side may agree to conclude a commercial deal to supply oil to Nepal. 

Other projects

In this context, China would encourage companies to speed up negotiations and the concerned agencies to formulate affirmative policies on the issues of pricing, taxation, transportation, quality control and customs and frontier formalities. The Chinese side has also agreed to build oil storage facilities in Nepal and send experts to carry out feasibility studies on oil and gas resources. Also, the two sides have agreed to establish a Dialogue Mechanism on Energy Cooperation to facilitate long-term cooperation in this area including a trans-border power grid, hydropower and solar power. Enhancing cooperation in disaster preparedness and mitigation and carrying out rain water harvesting and livelihood projects in Nepal to improve the living standard of locals are other agreed items. 

But China hardly cares about other projects except OBOR. Though Nepal had agreed to import 33 percent of its fuel requirement from China to end the Indian monopoly in Nepal, Petro China Company and Nepal Oil Corporation have not yet signed a memorandum of understanding. The reason is unsettled issues regarding prices and customs duty. The then commerce minister Ganesh Man Pun had urged China not to impose customs duty on the oil to be supplied to Nepal so that Chinese and Indian products would cost the same. But the government was replaced before Pun could pursue the matter further.

Take another agreed agenda, tourism promotion. Nepal offered free visas to Chinese visitors even though China was not ready to reciprocate. Today, the Nepal government has not been able to justify the move as it has become a burden to Nepal. Chinese tourists have been taking advantage of this system to acquire US dollars by using the currency exchange facility. As far as the agreed infrastructure support is concerned, Kathmandu is fed up by the sluggish way the upgradation of the Ring Road in Kathmandu is being implemented by China. The West Seti Hydropower Project is another example of non-implementation of agreed schemes. The Nepal government and China Three Gorges Corporation (CTGC) signed a pact to construct the 750 MW storage type hydropower project in the Far Western Region in 2012, butnothing has happened even though five years have passed.

Similarly, Chinese reluctance to reopen Kodari Highway has forced many Nepalis to rethink their positive image of China. The Kodari highway had become a lifeline for more than a dozen districts in the mid-hills, not only to import cheap garments but also to import building materials needed for the reconstruction of the infrastructure destroyed by the April 2015 earthquake.

Geopolitical complexity

China needs to take the recent statement of Foreign Minister Prakash Sharan Mahat seriously before pushing a ‘weak’ and ‘poor’ neighbour like Nepal any further. Speaking at the OBOR Nepal Conference last month, he pledged strategic cooperation and enhancement of connectivity with China and expressed the Nepal government’s anxiety saying, “China needs to understand that Nepal has a geopolitical complexity.” Though he didn’t go in details about the complexity, people understand it as a diplomatic message to fulfil the basic needs of Nepali citizens before pushing China’s strategic plan. 

Unless China is ready to reopen Kodari highway and encourage the resumption of other border linkages, Nepal’s dependency on India will not be reduced and emotional blackmailing by the Chinese side will not be useful anymore. Eventually, Nepali nationalists including the media, which now have a very positive perception about China, will change their pro-Chinese sentiments and start questioning the Chinese side about any push China may try to make in the future. 

Pyakurel teaches Political Sociology at the School of Arts, Kathmandu University