Northern ties

Nepal and China established official diplomatic relations in 1955. It turned out to be a milestone as several bilateral agreements followed. 

 

Till today, the two countries have signed the Nepal-China Joint Consultation Mechanism, Joint Committee on Economic and Trade Cooperation, Agreement on Trade and Payments, Agreement on Trade and Civil Aviation and other pacts, which turned out to be a boon for economic advancement. It has been six decades since these two immediate neighbours agreed to tie the knot of reciprocated cooperation and sharing. However, after the Indian trade embargo, Nepal-China relations, once again, are being seen through a strategic lens. It is true that Nepal has lagged behind in diversifying its trade relations with the two economically strong neighbours.

 

Political bonds

Looking back, Nepal and Tibet have fought two wars which were resolved through the Kyirong and Betrawati treaties. Nepal used Tibetan salt for a long time as Tibet used Nepali silver coins as legal tender. These were the key factors that established not merely state links but also people-to-people connections in the past. Nepal has never wavered in maintaining relations with its two next-door neighbours China and India on the basis of equi-proximity and equidistance. However, on occasion, China does not seem to have been satisfied with India’s influence in Nepal’s domestic affairs at the micro level. Regarding the recent Sino-India agreement to use Lipulekh as a trade transit point, China seems to be open to discussing and resolving it.

 

What China wants from Nepal is equally crucial at the political level and vice-versa. China wants Nepal to lend a hand in stopping anti-China activities on its soil. During the then prime minister BP Koirala’s visit to China, the two sides agreed to set up a boundary commission to mark out the border to steer clear of future tension. Nepal has not only acknowledged Tibet as an integral part of China but also supported it on several issues at the international level. Likewise, China was the first to endorse Nepal’s Zone of Peace proposal. Nepal has been keen to bring China into the South Asian Association for Regional Cooperation (SAARC) as its ninth member, but India does not share this enthusiasm.

 

Cultural ties

In the fifth century, a Buddhist scholar from Nepal went to China and worked with Chinese scholar Faxian to translate Pali and Sanskrit Buddhist texts into Chinese. After that, Buddhism is believed to have spread rapidly in China. Nepalis living along the northern border have a keen attachment with China in terms of marriage, market and culture. Likewise, 16 percent of the tourists visiting Nepal last year were Chinese, as per the Economic Survey 2014-15. China has also been providing scholarships to Nepali students at various Chinese universities. Disseminating knowledge and sharing culture has played a significant role in instilling harmony by bringing people of both the countries together.

 

Economic thruway

Intense consultations are underway to sign a Bilateral Investment Promotion and Protection Agreement (Bippa) between Nepal and China. 

 

When this happens, Nepal will find a new way to boost its economy. China has been persistently providing financial aid to Nepal, and was actively involved in post-quake search and rescue and rehabilitation work. Building trans-Himalayan highways should be accorded priority as it will not only foster bilateral affinity but also contribute to Nepal’s economy. China has extended its railway up to Shigatse, and it can be brought up to Kyirong which lies across the border from Rasuwa in Nepal. From Kyirong, the railway line can be extended to Kathmandu with a slight effort. China has already given the green signal for this project.

 

To expand connectivity across South Asia, China has urged Nepal to accept the Eurasian Transport Corridor project. Nepal has signed the Silk Road Economic Belt agreement, and this will undeniably help to boost its economy. China, a permanent member of the United Nation’s Security Council, has helped Nepal in various development projects, and obviously it has a strong global negotiating stance. 

 

To remove non-tariff barriers and reduce the cost of trade and build the railway line, Nepal should work hard to invigorate political relations. Nepal could enhance socio-economic development by bringing in Chinese investment, particularly in the hydro sector. Since the establishment of formal diplomatic relations, the friendship between Nepal and China has been reinforced through reciprocated belief and assistance. Putting political interests aside, the six-decade long mutual relations with the neighbouring country must be given priority.