Geopolitics: Global Trends and Nepal’s Foreign Policy

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August Analysis

A. Global Trends

A.1 US

Lowest point in US-China relationship

The relationship between US and China has hit the lowest point since normalization of ties began four decades ago with several episodes exacerbating the situation: COVID 19 and anti-Chinese racism, trade conflict, tensions in South China Sea, battle over technology, expulsion of media workers, expulsion of students, repression of Uighur Muslims, and grievances regarding Taiwan and Tibet.[1] In recent months, US is hitting at the core foundations of China’s rise as a superpower.[2] It has punished Chinese companies involved in island-building campaign in South China Sea;[3] suspended relations with Hong Kong;[4] accused China of trying to steal technologies and using hackers; shown concern about Tik-Tok and WeChat’s corporate ownership[5] and Huawei’s growing clout in the internet.[6] Not everybody, however, is buying into the US narrative. According to Shira Ovide, a technology blogger, US politicians and big technology companies[7] are fanning China fears in a way that makes it difficult for people to trust them.[8]

Pompeo clarifies the paradigm shift

The US Department of State has been trying to explain China’s threats and clarify a paradigm shift in US strategy to counter those threats and portray Communist Party of China as a major adversary. In a recent speech,[9] Pompeo insisted that the earlier engagement strategy had failed. “We must admit a hard truth that should guide us in the years and decades to come, that if we want to have a free 21st century, and not the Chinese century of which Xi Jinping dreams, the old paradigm of blind engagement with China simply won’t get it done. We must not continue it and we must not return to it.” Pompeo said the “only way to truly change communist China is to act not on the basis of what Chinese leaders say, but how they behave.”

Pompeo stated that over decades, US engagement policy—introduced by President Nixon in 1972—has built up “massive imbalance,” which, coupled with “Chinese Communist Party’s designs for hegemony” has generated threats to US ideals and the free world. US engagement policy was intended to induce China to change, but Pompeo believes that the Chinese Communist Party (CCP) has used the opportunity to become stronger and more menacing. He highlighted the spread of the pandemic, repressions, and trade abuses as examples of the gap between expectations and reality regarding China. Pompeo blamed the Chinese Communist Party as “Frankenstein” driven by Marxist-Leninist ideology, which has subverted corporate entities all over the world and whose goal is “global hegemony of Chinese communism.” He claimed that General Secretary Xi Jinping is a true believer in a bankrupt totalitarian ideology.

Pompeo outlined several strategic shifts in the US policy. The first is “to induce China to change in more creative and assertive ways.” Second is to change the American people and US partners’ perceptions about the Chinese Communist Party. Pompeo’s argument was that the CCP is a threat to US and to the free world. Chinese businesses and PLA are controlled by the CCP. Therefore, Chinese businesses and the PLA are a threat to US national security interests and the free world. Another strategy is to push for fairness and reciprocity. “I call on every leader of every nation to start by doing what America has done – to simply insist on reciprocity, to insist on transparency and accountability from the Chinese Communist Party,” he said. The fourth is a possible alliance. “Maybe it’s time for a new grouping of like-minded nations, a new alliance of democracies,” he said. The fifth was a change in the defence strategy. According to Pompeo, US emphasis on cyber and space capabilities constitutes a dramatic shift in focus regarding strategic defense.

A.2 India

Indian PM Modi’s independence day speech

During his independence day speech,[10] PM Modi of India highlighted several ideas that have a direct bearing on foreign policy and international relations. First, although he reasserted the notions of “whole world is one family” and global inter-dependence, Modi insisted that these ideas should be founded on self-reliance. He expressed the desire to become a hub of global supply chain. Second, he emphasized cooperation and partnership in South Asia and India’s “extended neighbourhood.” Third, PM Modi emphasized the need for national security and consolidation of India’s defense capabilities; a part of the strategy was integration of India’s border regions like Ladakh and Andaman and Nicobar islands. All these three ideas have significant implications for India’s relations with Nepal.

Shift in India’s foreign policy?

Events in recent months have raised the question of whether India is going to shift foreign policy. Refusing to be pigeonholded as an US ally, India has so far adopted a non-aligned policy with the Indian PM Modi touting the Sanskrit slogan: all the world is a family—Basudaiva Kutumbakam. In recent months, however, India has felt that its sensitivity to China has not been reciprocated and there are signs that it may take a harder stance or finally choose a side: the Quad?[11] Similarly, border clash with China has resulted in nationalistic jingoism and prompted big Indian companies to seek alternative supply chains. Weaning away from China, however, is difficult for businesses and holds much uncertainty.[12] In the face of continued border differences, India has stood up to China and made its position clear. For example, speaking at a US-India Strategic Partership Forum, India’s External Affairs Minister Dr S Jaishankar said that “India will match or respond to China’s capabilities in the same measure if Beijing continues to assert herself and influence areas or geographies.”[13]

While China continues military build-up,[14] India’s defense establishment continues to adopt an aggressive stance, with its Chief of Defense Staff insisting that India’s military options are open if talks do not yield results.[15] Confrontation between China and India escalated when Indian army trying to assert control over the southern banks of Lake Pangong.[16] India is also investing on potential military alliances. India’s participation in G7, has inflamed China as US has sought to deny China’s participation in the grouping. Similarly, Australia backed India in border tensions with China, further riling China.[17] In March, India collaborated on a Quad plus dialogue over the coronavirus pandemic, which included other countries like New Zealand, Vietnam and South Korea. The Times of India said “the effort is also an attempt to keep the Quad Plus countries within a certain sphere of influence and strategic direction.”[18] What started as a partnership for disaster relief in 2004 has turned out to be an alliance to limit China’s assertiveness in the Asia-Pacific. However, given New Zealand’s economic ties with China and Vietnam’s defence policy,[19] the two countries might want to avoid being trapped in great power rivalry.

According to Victor Gao and Prem Shankar Jha, after coming to power, Prime Minister Modi took a series of steps to bolster strategies ties with the US and contain China, threatening security of China’s global trade and supply routes.[20] India appears to be opting for economic ties with China and strategic ties with US, but the main question is how it can balance these two interests. Chinese experts have questioned the sustainability and benefits of India’s attempts to decouple,[21] including moves like banning Chinese apps, holding Chinese goods from clearances[22] and boycotting Chinese goods.[23] While the social media has inflamed passions and made bilateral relations a hot topic of discussion,[24] the two countries have been unable to ease border tension.[25]

A.3 China

China’s response

Chinese media have interpreted recent US efforts as a “new shock wave” and claim China has been able to withstand the “new cold war” in a “relatively stable manner.”[26] According to New York Times, after weeks of belligerent response, China has recently toned down its rhetoric so as not to allow Trump administration an excuse to use China for elections.[27] However, discussions in the Chinese media raise several questions including the sustainability of the US shock wave, the ability of the US to influence global affairs in the face of domestic troubles, the ability of China to withstand US pressure, and the possible division of public opinion within China. China is reasserting support to the Communist Party of China as it tries to deflect US attack on the CPC, gauge and strengthen public opinion against US measures,[28] enhance military preparedness,[29] strengthen global partnerships, and conduct surveillance of US military activities, particularly in South China Sea.[30]

In recent days, there’s been a growing focus on Biden’s policy. Chinese experts believe that if Biden wins, the US may move from a zero-sum game that perceives China as a strategic competitor to a policy that may be tough on human rights and economic interests, but at the same time prioritizes global cooperation on issues of mutual interest.[31]

China’s relations with Iran and Russia

China’s is cultivating ties with Iran, to the extent that the two countries are about to enter into a long term military and economic partnership. However, the partnership is uneasy given conflicting ideology within Iran, “political fissures” in the Middle East, and efforts by US to counter a potential threat.[32] China has also sought to forge continued understanding with Russia on core interests of two countries including sovereignty, security and opposition to external interventions.[33] However, according to an opinion piece published in South China Morning Post, Maria Siow claimed that cracks have appeared in China-Russia relationship with India and US playing a role.[34]

China has also been expediting its push for a digital currency backed by its central bank as Chinese institutions are being sidelined from the SWIFT payment system and there are growing worries that it may also be sidelined from the global digital currency race. According to Global Times, “the cryptocurrency is a way for Beijing to challenge US dollar hegemony.”[35]  

China’s response to India

Border differences between India and China persisted into late August, as the two countries conducted “provocative military movements” on the southern bank of Pangong Lake in the Ladakh region. China claimed[36] that Indian troops had broken promises and illegally intruded the Line of Actual Control. Global Times emphasized that “China must resolutely counterattack India’s opportunist move…China is several times stronger than India, and India is no match for China. We must smash any Indian illusion that it can deal with China by colluding with other powers, such as the US,” the editorial said.[37]

After skirmishes in the Galwan Valley, China has been raising the Kashmir issue in international fora, including the UN Security Council.[38][39] China urged India not to review Confucius Institutes that were being run in seven Indian colleges and 54 schools.[40] As China raises the stakes, India appears to be vulnerable on at least four fronts: its ability to manage COVID 19 and its economic impacts, Kashmir issue, and trade relations with China.

Given the developments in international relations, China is likely to pursue an even more aggressive policy towards Nepal. China will be encouraged to develop closer ties with political parties in Nepal and invest in political stability (ie, ensure unity among and longevity of its political allies).

The conflict of interests of the international actors, is likely to exacerbate contradiction between Nepal’s national interests and partisan/individual interests. Nepal’s international relations is likely to become less and less transparent and coherent.

Tibet policy

Chinese President Xi Jinping’s policy for Tibet, stated during a high-level symposium on Tibet Work on August 29, will have significant ramifications for Nepal. China’s policy on Tibet focuses on national security, political stability, quality of life, environment, and border defense and “frontier” security, with emphasis on “foreign an ironclad shield to safeguard stability.” Xi stressed on incorporation of cultural education that emphasizes patriotism (Chinese nationalism) and loyalty to socialism with Chinese characteristics. According to Xi, “Tibetan Buddhism should be guided in adapting to the socialist society and should be developed in the Chinese context.” Chinese government and CPC will also support the party cadre’s “income, housing, medical care and retirement, as well as education for their children.”[41]

B. Nepal

B.1 Nepal’s Relations with China

China has been encouraging Nepal, successfully, to move away from Indian and western influence in both domestic affairs and international relations by taking “independent” decisions. This includes cooperating with China on COVID-19. China is currently providing development assistance to Nepal for about a dozen projects including transport and health infrastructure, tunnels and railways, and concessional loans. In addition to the delays caused by COVID-19, both sides acknowledged that there were issues related to planning and coordination.[42]

Nepal took several steps to appease Chinese interests. In June, Cuba delivered a statement in the UN HRC on behalf of 53 countries including Nepal supporting China’s national security law for Hong Kong, asserting that Hong Kong is an inseparable part of China and asking “relevant sides to stop interfering in China’s internal affairs by using Hong Kong related issues.”[43] In July, MoFA said Nepal is in favour of concluding treaties and agreements with neighboring and other friendly countries on mutual legal assistance and extradition.[44] Indian media widely discussed a Chinese-funded study about why Nepali mercenaries join the Indian Army and interpret it as an attempt to weaken Nepal’s ties with India.[45]

China is competing globally to win trust by providing public goods in the fight against COVID 19 and contrasting US motives as self-serving.[46] Nepal is allowing clinical trials of a Chinese vaccine among Chinese workers at Hongshi Cement.[47] Earlier, Nepal participated in the sub-regional video conference of foreign ministers of China, Afghanistan, Pakistan and Nepal. According to Chinese Foreign Ministry, the video conference reached consensus on five points: adhering to multilateralism and rejecting politicization of the epidemic, enhancing joint containment mechanisms, ensuring continuity of economic partnerships, promoting BRI (including Trans-HImalayan Multi-Dimensional Connectivity Network), and supporting the international system with the UN as the core.[48] Global Times published an article analysing India’s response to the four-country dialogue on COVID 19, saying the fight against COVID-19 is “more important that illusory geopolitical game in South Asia.”[49] Many experts in India interpreted this coalition as an attempt to isolate India.[50]

Nepal’s political relations with China is growing despite some setbacks. Political office holders, including President Bidya Bhandari and Chinese President Xi Jinping, exchange congratulatory messages on the occasion of the 65th anniversary of official Nepal-China diplomatic ties. They messages emphasized strategic partnership of cooperation, connectivity, infrastructure and regional stability.[51] Shen Shiwei, CGTN new producer tweets pictures of Chinese infrastructure groundwork close to Nepal border including the Gyirong railway—which will be completed in two years[52]—and a transmission line.[53]

There were however, some negative reactions to Chinese influence in Nepal. The first was the perception that Chinese were involved in micromanaging domestic politics. The second was that after years of defending its move to buy Chinese aircraft—and suffering heavy losses and debt—the NAC finally grounded Chinese aircraft.[54]

B.2 Dialogue with India

PM Oli is trying to revive political dialogue with India; his close aides have been eager to publicize early breakthroughs. On the occasion of India’s Independence Day, PM Oli talked to Prime Minister of India for the first time in over four months.[55] The telephonic conversation focused on COVID 19 cooperation well as India’s election to the UN Security Council as a non-permanent member. Experts close to PM Oli tried to portray the dialogue as an end to a deadlock and had opened the possibility of future talks.[56] BBC Nepali analysis claims that although the initiation of dialogue was a positive step, it shouldn’t be taken as an end of India’s “diplomatic silence” or end of absence of dialogue between Nepal and India.[57]

Citing foreign affairs experts and ministry officials, Kantipur claims that Nepal and India are yet to enter on main issues.[58] During the meeting of the oversight mechanism, Nepali officials failed to raise their concerns related to lack of progress on issues related to the border, EPG, and reconstruction. The issue of Ramayana circuit was just for the sake of formality, it quoted a foreign ministry official as saying. The Kathmandu Post reported that the meeting of the Boundary Working Group will be held soon.[59]

Nepal-India Oversight Mechanism (set up in 2016) reviews the status of projects being implemented under bilateral cooperation and tries to address concerns about project delays.[60] The projects include roads in the Terai, cross-border railways, Arun III hydropower project, oil pipeline, Pancheswore, post-earthquake reconstruction, integrated check posts, Ramayana circuit and many others.

There has been a breakdown in meaningful political dialogue between Nepal and India since the end of 2019. Talking to CESIF, Nepal’s Foreign Minister, Pradeep Gyawali said Nepal waited for India’s response to the border issue until November 2019 and proceeded to amend the constitution only when the Indian side was not forthcoming. He, however, claimed that Nepal’s dialogue with India has continued across multiple formal mechanisms. In an interview with Kantipur Television on July 20, he said Nepal was trying to “reset geo-political relations” and added that flippant remarks from many sides were harming such efforts.[61]

B.4 PM Oli’s role in geopolitics

PM Oli’s actions, some of them unnecessary and openly antagonistic, have been responsible for eroding trust between Nepal and India. BBC News Nepali versions outlines several moves by PM Oli that served to annoy India: Nepal’s new map, statements in the parliament on Indian virus and India’s attitude, the claim that India is trying to remove him from office, and statement on Ram Janmabhoomi, and provisions on citizenship among others.[62]

MoFA was forced to clarify PM Oli’s claims regarding Shri Rama. PM Oli a day before had claimed that Rama was born in Thori of Nepal.[63] Oli’s remarks regarding Shri Rama and Ayodha drew heavy criticism in both Nepal and India[64] and, together with political differences over the border, raised the possibility of damaging bilateral relations at the social level.[65]

Nepal and India have also sparred over Gautam Buddha’s identity. MoFA commented on GoN’s comment on Indian External Affairs Minister’s claim regarding Gautam Buddha’s Indian identity.[66] The Ministry of External Affairs of India responded by saying, “EAM’s remarks yesterday at the CII event referred to our shared Buddhist heritage. There is no doubt that Gautam Buddha was born in Lumbini, which is in Nepal.”[67]

B.4 Ruling party and geopolitics

International geo-political dynamics is generating strains in the ruling party. India, China and the US figure heavily in Nepal Communist Party’s internal differences.[68] The debate over parliamentary approval of the Millennium Challenge Corporation Compact divided the party into two blocs and affected the election of a new Speaker of the House. The issue of the Speaker was finally resolved when the party decided not to approve the MCC Compact at the time. Similarly, during a public function on 28 June, PM Oli claimed that India was intent on removing him from office.

Chinese Ambassador Hou Yanqui met former PM Madhav Kumar Nepal generating questions about the Chinese Ambassador’s role in mediating NCP’s internal differences.[69]

B.5 MCC

The MCC Compact and relations with India continue to figure heavily in the differences between PM KP Oli and the faction led by Pushpa Kamal Dahal Prachanda. The task force formed to resolve internal differences says the MCC Compact should not be approved without amendments and differences with India regarding the border should be resolved through diplomacy.[70]

US ambassador to Nepal Randy Berry met Deputy PM and Defense Minister Ishwar Pokhrel and expresses concern about MCC Compact. Although Nepal had included MCC Compact funds in the policies and programs of this fiscal year, it was later removed due to objections from the Nepal Communist Party. Nepal has now requested deferral of the implementation date citing COVID 19 and not political differences. The government is in favour of the MCC but there is opposition from within the ruling party.[71]

The MCC Compact is also debated heavily within the Janata Samajbadi Party (JSP). The two likely options were whether to keep silent on the issue or demand amendment prior to ratification. Many individuals in the party frame the MCC as a “counter” to China’s BRI but support ratification with amendments.[72]

B.6 Nepal Army

Nepal Army’s role in Nepal-India relations has grown in significance. Nepal Army established a separate directorate for border monitoring and management[73] after cabinet approval. The government has introduced a policy making it mandatory to include Nepal Army on all mechanisms related to border management and security. The directorate will also be in charge of archiving sensitive and important documents related to the border.[74] The Indian embassy handed over 10 ventilators, a gift of the Indian Army, to the Nepal Army, which has been a key instrument in tackling COVID 19 pandemic in Nepal.[75]

C. Analysis and Conclusion

US and Nepal

US Secretary of State Pompeo’s statements indicates the possibility of an aggressive US campaign against China, which in turn will put a lot of pressure on US allies (eg, UK, India, Australia, Japan) and strategically positioned countries around the world like Nepal. If elected, Joe Biden may adopt a different strategy. The US presidential election, therefore, may have significant implications for Nepal’s future geo-political relations. Whatever the scenario, trade and technological decoupling looks increasingly likely.

Nepal is likely to face increased pressure from India and the US regarding its relationship and cooperation with China. This could mean that Nepal’s technological and financial integration with the global economy may become fragmented and incompatible. A strident policy against China will make it difficult for US to conduct development cooperation in Nepal (eg, MCC) as their motives will be questioned. Nepal will remain unwilling to do anything that may be perceived to be against China’s interests.

China and Nepal

China has diversified its economy so that it is no longer dependent on supply chains for economic growth. China has diplomatic and economic clout globally, as indicated by Cuba’s statement in the UN on behalf of 53 countries regarding security law in Hong Kong. As international pressure against China grows, Nepal’s value for China will increase. Nepal, currently is of critical importance for China as a neighbour, as a region bordering Tibet, as a buffer with India, and as a partner in the international fora. China is therefore likely to continue to invest on strategic partnerships, connectivity and regional geo-political stability, which means Nepal will remain critical for China.

If Cuba’s statement on Hong Kong is taken as an indicator, China currently has about 53 hardcore allies in the UN system, including Nepal. Given the current political regimes inability to displease China and eagerness to displease US and India, Nepal is seen from outside as having moved closer to China. Given the conflict between US/India and China, the process of political, financial, and technological shift towards China become irreversible.

At present, China’s interest in Nepal has aided the ruling political regime take stand against India, and capture the public’s imagination by talking about big infrastructure projects and development cooperation with China. Given China’s rise and its critical interest, Nepal will need to be more efficient and capable in managing geo-political rivalry. Nepal also needs to ensure that Chinese interests do not harm Nepal’s economy, distort domestic politics, or promote corruption. This requires a broader national consensus on Nepal’s national interests as well as transparency.

India and Nepal

India’s relationship with China also indicates that rapprochement between India and China is not easy, and will take a lot of effort and time. It is easier for India to move away from China rather than toward China. Modi’s Independence Day speech indicates that India is willing to replace China as the hub of global supply chain, but this task would be much more difficult for India than it was for China. As reflected in the Independence Day speech of PM Modi, India’s stated policy aspirations around national identity, economic development and national security have significant implications for relations with Nepal. Many obstacles have emerged in India’s attempts to maintain cordial relations with China, and improving relationship with China will be a difficult task that partly depends on future US policies.

Nepal’s relations with India, in recent years, has been defined by Nepal’s desire to move away from India’s influence (or the shadow of special relationships) and take “independent” decisions. This move has been compounded by China’s growing interest and engagements in Nepal, PM Oli’s use of Nepali nationalism and promotion of anti-Indian rhetoric, issues with India’s development assistance in Nepal, and substantial differences related to the border and its management.

Nepal’s relations with India is not likely to improve soon, given the role of China, nationalist sentiments, partisan political interests, corruption, and bottlenecks in managing the border and development cooperation. However, this should not prevent Nepal from ensuring continuity of existing cross-border relationships, enhancing connectivity, and developing trusted relationship with India and China, which will also help relationship between India and China.

Nepal’s foreign policy

Efforts are underway to reset and rebalance Nepal’s foreign policy, which has lost coherence in recent years. The Kathmandu Post reported that Nepal drafting a new foreign policy document.[76] Similarly, Nepal government is working on a new code of conduct that seeks to streamline relations between Nepali actors and foreign interests.[77] Experts involved in the new foreign policy frequently cite shift in global power relations, which means acknowledging China’s growing influence. At the same time, however, Nepal’s relations with India and the west have come under strain. Former Minister Kamal Thapa’s tweet highlighted this tension, “PM Oli says the Indian ambassador is active in pulling down the government. On the other side, the Chinese Ambassador goes to homes of leaders to protect the government. Will a democratic republic run by such remote control serve Nepal’s interests?”[78]

Nepal needs to develop a diplomatic strategy to protect its national interests and manage relationships during heightened conflict between US/India and China. This may require a greater understanding with Germany and the European Union, in addition to China and the Quad.[79]

Nepal’s desire to move away from Indian influence resonates with public sentiments. India and the West must be prepared to respect Nepal’s nationalist sentiments and allow Nepalis to exercise autonomy and forge a new understanding based on equality. On the other, hand, Nepal must be able to carve a path by creating an understanding with China, India and the US. In this sense, Nepal’s foreign and defense policy predicaments are similar to that of Vietnam,[80] and needs to protect Nepal’s national interests vis-a-vis that of China, US[81] and India.

Nepal should issue a new foreign policy white paper that resonates closely with Nepal’s national defense policy. Both these documents should be used as a means to make Nepal’s national interests, perspective and priorities clear to the international community and to the Nepali people.

Annex I

Nepal and Geo-politics

Timeline of Key Events (July-August 2020)

August 27

Ministry of Finance and China International Development Cooperation Agency (CIDCA) hold a video conference. According to a press statement issued by the Ministry, “consensus (was) reached to expedite the implementation and construction of China-funded development projects.” The Chinese side promised to provide more support for COVID 19, and work to complete and scale up projects after effects of the pandemic ease down. The two sides acknowledged the need to resolve issues related to planning and coordination. The key projects currently under planning and implementation are: improvement of Araniko Highway and the Ring Road, extension of Bir Hospital, coordinated border management at Korala Customs Point, Madan Bhandari Science and Technology University Project, Livelihood Improvement Projects in northern districts of Nepal, feasibility study of Tokha-Chhare and Betrabati-Syafrubesi tunnels, China-Nepal Cross-Border Railway and Exim Bank concessional loans.

August 25

TKP reports that Nepal drafting a new foreign policy document and trying to restart political dialogue with India.[82]

Nepal is allowing clinical trials of Remdesivir and three vaccines against COVID 19. The vaccines are from China, Russia and Oxford University. China has asked permission to conduct trial among Chinese workers at Hongshi Cement.[83] The trial of Remdesivir, meanwhile, was earlier planned to be conducted in cooperation with WHO, but is now being conducted directly with the producer.[84]

August 24

After years of defending its move to buy Chinese aircraft—and suffering heavy losses and debt—the NAC finally grounds Chinese aircraft.[85]

August 23

The MCC Compact and relations with India continue to figure heavily in the differences between PM KP Oli and the faction led by Pushpa Kamal Dahal Prachanda. The task force formed to resolve internal differences says the MCC Compact should not be approved without amendments and differences with India regarding the border should be resolved through diplomacy.[86]

August 21

Nepal Army establishes a separate directorate for border monitoring and management.[87]

August 20

The Kathmandu Post reports that the meeting of the Boundary Working Group will be held soon.[88]

August 18

Citing foreign affairs experts and ministry officials, Kantipur claims that Nepal and India are yet to enter on main issues.[89] During the meeting of the oversight mechanism, Nepali officials failed to raise their concerns related to lack of progress on issues related to the border, EPG, and reconstruction. The issue of Ramayana circuit was just for the sake of formality, it quoted a foreign ministry official as saying.

August 17

Nepal-India Oversight Mechanism (set up in 2016) reviews the status of projects being implemented under bilateral cooperation and tries to address concerns about project delays.[90] The projects include roads in the Terai, cross-border railways, Arun III hydropower project, oil pipeline, Pancheswore, post-earthquake reconstruction, integrated checkposts, Ramayana circuit and many others.

BBC Nepali analysis claims that although the initiation of dialogue was a positive step, it shouldn’t be taken as an end of India’s “diplomatic silence” or end of absence of dialogue between Nepal and India.[91]

Indian media widely discuss a Chinese-funded study about why Nepali mercenaries join the Indian Army and interpret it as an attempt to weaken Nepal’s ties with India.[92]

August 15, 2020

On the occasion of India’s independence day, PM Oli talks with Prime Minister of India for the first time in over four months.[93] The telephonic conversation focused on COVID 19 cooperation well as India’s election to the UN Security Council as a non-permanent member. Experts close to PM Oli tried to portray the dialogue as an end to a deadlock and had opened the possibility of future talks.[94]

August 9, 2020

MoFA comments on GoN’s comment on Indian External Affairs Minister’s claim regarding Gautam Buddha’s Indian identity.[95] The MEA respons saying, “EAM’s remarks yesterday at the CII event referred to our shared Buddhist heritage. There is no doubt that Gautam Buddha was born in Lumbini, which is in Nepal.”[96]

The Indian embassy hands over 10 ventilators, a gift of the Indian Army, to the Nepal Army.[97]

August 3

Global Times publishes an article analysing India’s response to the four-country dialogue on COVID 19, saying the fight against COVID 19 is “more important that illusory geopolitical game in South Asia.”[98] Many experts in India interpreted this coalition as an attempt to isolate India.[99]

August 1

Political office holders, including President Bidya Bhandari and Chinese President Xi Jinping, exchange congratulatory messages on the occastion of the 65th anniversary of official Nepal-China diplomatic ties. They messages emphasized strategic partnership of cooperation, connectivity, infrastructure and regional stability.[100]

July 27

Nepal participates in the sub-regional video conference of foreign ministers of China, Afghanistan, Pakistan and Nepal. According to Chinese Foreign Ministry, the video conference reached consensus on five points: adhere to multilateralism and reject politicizing the epidemic, enhance joint containment mechanisms, ensure continuity of economic partnerships, promote BRI (including Trans-HImalayan Multi-Dimensional Connectivity Network), and support the international system with the UN as the core.[101]

July 26, 2020

MoFA says Nepal is in favour of concluding treaties and agreements with neighboring and other friendly countries on mutual legal assistance and extradition.[102]

US ambassador to Nepal Randy Berry meets Deputy PM and Defense Minister Ishwar Pokhrel and expresses concern about MCC Compact. Although Nepal had included MCC Compact funds in the policies and programs of this fiscal year, it was later removed due to objections from the Nepal Communist Party. Nepal has now requested deferral of the implementation date citing COVID 19 and not political differences. The government is in favour of the MCC but there is opposition from within the ruling party.[103]

July 21

Shen Shiwei, CGTN new producer tweets pictures of Chinese infrastructure groundwork close to Nepal border including the Gyirong railway—which will be completed in two years[104]—and a transmission line.[105]

July 20

The cabinet gives permission to the Nepal Army to form a new directorate on border monitoring, management and security. The government has introduced a policy making it mandatory to include Nepal Army on all mechanisms related to border management and security. The directorate will also be in charge of archiving sensitive and important documents related to the border.[106]

There has been a breakdown in meaningful political dialogue between Nepal and India since the end of 2019. Talking to CESIF, Nepal’s Foreign Minister, Pradeep Gyawali said Nepal waited for India’s response to the border issue until November 2019 and proceeded to amend the constitution only when the Indian side was not forthcoming. He, however, claimed that Nepal’s dialogue with India has continued across multiple formal mechanisms. In an interview with Kantipur Television on July 20, he said Nepal was trying to “reset geo-political relations” and added that flippant remarks from many sides were harming such efforts.[107]

July 15

BBC News Nepali versions outlines several moves by PM Oli that served to annoy India: Nepal’s new map, statements in the parliament on Indian virus and India’s attitude, the claim that India is trying to remove him from office, and statement on Ram Janmabhoomi, and provisions on citizenship among others.[108]

July 14, 2020

MoFA is forced to clarify PM Oli’s claims regarding Shri Rama. PM Oli a day before had claimed that Rama was born in Thori of Nepal.[109] Oli’s remarks regarding Shri Rama and Ayodha drew heavy criticism in both Nepal and India[110] and, together with political diffeences over the border, raised the possibility of damaging bilateral relations at the social level.[111]

July 13

The MCC Compact is also debated heavily within the Janata Samajbadi Party (JSP). The two likely options were whether to keep silent on the issue or demand amendment prior to ratification. Many individuals in the party frame the MCC as a “counter” to China’s BRI but support ratification with amendments.[112]

July 6

Former Minister Kamal Thapa tweets, “PM Oli says the Indian ambassador is active in pulling down the government. On the other side, the Chinese Ambassador goes to homes of leaders to protect the government. Will a democratic republic run by such remote control serve Nepal’s interests?”[113]

July 5

Chinese Ambassador Hou Yanqui meets former PM Madhav Kumar Nepal generating questions about the Chinese Ambassador’s role in mediating NCP’s internal differences.[114]

July 4, 2020

India, China and the US figure heavily in Nepal Communist Party’s internal differences.[115] The debate over parliamentary approval of the Millenium Challenge Corporation Compact divided the party into two blocs and affected the election of a new Speaker of the House. The issue of the Speaker was finally resolved when the party decided not to approve the MCC Compact at the time. Similarly, during a public function on 28 June, PM Oli claimed that India was intent on removing him from office.

June 30

Cuba delivers a statement in the UN HRC on behalf of 53 countries including Nepal supporting China’s national security law for Hong Kong, asserting that Hong Kong is an inseparable part of China and asking “relevant sides to stop interfering in China’s internal affairs by using Hong Kong related issues.”[116]


[1] https://www.nytimes.com/2020/07/22/world/asia/us-china-cold-war.html

[2] https://www.nytimes.com/2020/07/14/world/asia/cold-war-china-us.html

[3] https://www.nytimes.com/2020/08/26/business/economy/trump-sanctions-south-china-sea.html

[4] https://www.nytimes.com/2020/08/19/us/politics/trump-china-hong-kong.html

[5] https://www.nytimes.com/2020/07/15/technology/tiktok-washington-lobbyist.html

[6] https://www.nytimes.com/2020/07/14/business/huawei-uk-5g.html

[7] https://techcrunch.com/2019/07/17/facebook-or-china/

[8] https://www.nytimes.com/2020/07/21/technology/us-china-technology.html

[9] https://www.state.gov/communist-china-and-the-free-worlds-future/

[10] https://news.abplive.com/news/india/independence-day-2020-full-text-of-pm-modis-speech-to-nation-from-the-ramparts-of-red-fort-1313291

[11] https://www.ft.com/video/69cb55fd-52cd-4d96-b205-228bd4b3c9f8

[12] https://www.ft.com/content/c22cbd52-fa50-4cbc-9dd5-4f30557a283f

[13] https://www.indiatoday.in/india/story/india-will-match-china-s-capabilities-jaishankar-issues-veiled-threat-as-ladakh-standoff-intensifies-1717235-2020-09-01

[14] https://www.india.com/news/india/ladakh-standoff-china-has-deployed-high-altitude-artillery-guns-in-tibet-near-india-border-say-reports-4114160/

[15] https://timesofindia.indiatimes.com/india/india-has-military-options-to-deal-with-chinese-transgressions-if-talks-fail-cds-rawat/articleshow/77713462.cms

[16] https://www.nytimes.com/2020/08/31/world/asia/india-china-troops-border.html

[17] http://www.globaltimes.cn/content/1196444.shtml

[18] https://timesofindia.indiatimes.com/india/india-joins-hands-with-nz-vietnam-s-korea-to-combat-pandemic/articleshow/74740424.cms

[19] http://www.mod.gov.vn/wps/wcm/connect/08963129-c9cf-4c86-9b5c-81a9e2b14455/2019VietnamNationalDefence.pdf

[20] https://thewire.in/diplomacy/modi-xi-jinping-lac-india-china-strategic-cooperation

[21] https://www.globaltimes.cn/content/1196083.shtml

[22] https://www.globaltimes.cn/content/1192672.shtml

[23] https://www.globaltimes.cn/content/1192617.shtml

[24] https://www.globaltimes.cn/content/1192171.shtml

[25] https://www.hindustantimes.com/world-news/forget-disengagement-china-opens-new-front-along-lac/story-cu2n1gHjqDR97Nh733UGsN.html

[26] https://www.globaltimes.cn/content/1195960.shtml

[27] https://www.nytimes.com/2020/08/15/world/asia/china-us-nationalism.html

[28] https://www.globaltimes.cn/content/1197323.shtml

[29] https://www.globaltimes.cn/content/1195968.shtml

[30] https://www.globaltimes.cn/content/1196426.shtml

[31] For example of this view see Wei Zongyo. “Will there be dramatic changes with Biden’s China Policy. https://www.globaltimes.cn/content/1198614.shtml

[32] https://www.nytimes.com/2020/07/21/opinion/china-iran.html

[33] http://www.globaltimes.cn/content/1193952.shtml

[34] https://www.scmp.com/week-asia/politics/article/3098398/could-russia-side-us-and-india-against-china

[35] http://www.globaltimes.cn/content/1196699.shtml

[36] https://news.cgtn.com/news/2020-08-31/China-denies-India-s-accusation-of-latest-border-dispute-TpaPYXcddm/index.html

[37] https://www.globaltimes.cn/content/1199476.shtml

[38] http://www.globaltimes.cn/content/1196878.shtml

[39] http://www.globaltimes.cn/content/1196947.shtml

[40] http://www.china.org.cn/world/Off_the_Wire/2020-08/04/content_76345940.htm

[41] http://www.xinhuanet.com/english/2020-08/29/c_139327831.htm

[42] The key projects currently under planning and implementation are: improvment of Araniko Highway and the Ring Road, extension of Bir Hospital, coordinated border management at Korala Customs Point, Madan Bhandari Science and Technology University Project, Livelihood Improvement Projects in northern districts of Nepal, feasibility study of Tokha-Chhare and Betrabati-Syafrubesi tunnels, China-Nepal Cross-Border Railway and Exim Bank concessional loans.

[43] http://www.china-un.ch/eng/hom/t1793804.htm

[44] https://mofa.gov.np/official-spokespersons-response-to-media-query-on-treaties-agreements-on-mutual-legal-assistance-and-extradition/

[45] For example, see https://www.indiatoday.in/india/story/china-wants-to-know-why-nepal-young-men-joining-indian-army-1712287-2020-08-17

[46] https://www.globaltimes.cn/content/1198456.shtml

[47] https://ekantipur.com/news/2020/08/25/159832101497765264.html

[48] https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1801954.shtml

[49] https://www.globaltimes.cn/content/1196492.shtml

[50] https://www.huffingtonpost.in/entry/china-afghanistan-nepal-pakistan-india_in_5f215ddcc5b6b8cd63b03c39

[51] https://mofa.gov.np/press-release-on-the-65th-anniversary-of-establishment-of-diplomatic-relations-between-nepal-and-china/

[52] https://twitter.com/shen_shiwei/status/1285463518716653568?s=20

[53] https://twitter.com/shen_shiwei/status/1296328637231140864?s=20

[54] https://kathmandupost.com/national/2020/07/13/nepal-airlines-decides-to-ground-chinese-aircraft-for-good-to-cut-losses

[55] https://mofa.gov.np/press-release-on-telephone-conversation-between-the-prime-ministers-of-nepal-and-india-2/

[56] https://kathmandupost.com/national/2020/08/15/oli-modi-talk-seen-as-a-step-towards-a-thaw-in-nepal-india-relations

[57] https://www.bbc.com/nepali/news-53802929

[58] https://ekantipur.com/news/2020/08/18/159771568507891056.html

[59] https://kathmandupost.com/national/2020/08/20/after-two-high-level-engagements-nepal-and-india-look-for-a-boundary-meeting

[60] https://mofa.gov.np/press-release-on-the-eighth-meeting-of-nepal-india-oversight-mechanism/

[61] https://www.youtube.com/watch?v=oQeLRYSjTRM

[62] https://www.bbc.com/nepali/news-53417276

[63] https://mofa.gov.np/statement-on-clarification/

[64] https://www.bbc.com/nepali/news-53397973

[65] https://www.bbc.com/nepali/news-53404132

[66] https://mofa.gov.np/official-spokespersons-response-to-media-queries-on-gautam-buddha/

[67] https://www.mea.gov.in/response-to-queries.htm?dtl/32882/official+spokespersons+response+to+a+media+query+on+eams+remarks+at+the+cii+event+on+08+august+2020

[68] https://ekantipur.com/news/2020/07/04/159382490151784856.html

[69] https://www.bbc.com/nepali/news-53310311

[70] https://ekantipur.com/news/2020/08/23/1598144142678810.html

[71] https://ekantipur.com/business/2020/07/27/159581348596858432.html

[72] https://ekantipur.com/news/2020/07/13/159464755874844494.html

[73] http://annapurnapost.com/news/164147

[74] http://annapurnapost.com/news/164147

[75] https://kathmandupost.com/national/2020/08/09/ndia-gifts-10-icu-ventilators-to-the-nepal-army

[76] https://kathmandupost.com/national/2020/08/22/as-world-sees-rapid-geopolitical-shifts-nepal-needs-a-clear-foreign-policy-experts-say

[77] https://kathmandupost.com/national/2020/08/27/foreign-ministry-working-to-revise-and-reactivate-diplomatic-code-of-conduct

[78] https://twitter.com/KTnepal/status/1280024186908377088?s=20

[79] In such a situation, as Thomas Friedman argues, Germany and the European Union will play a decisive role in the growing conflict between US and China. See https://www.nytimes.com/2020/08/25/opinion/trump-china-germany.html

[80] See Vietnam’s national defence white paper. http://www.mod.gov.vn/wps/wcm/connect/08963129-c9cf-4c86-9b5c-81a9e2b14455/2019VietnamNationalDefence.pdf?MOD=AJPERES&CACHEID=08963129-c9cf-4c86-9b5c-81a9e2b14455

[81] https://media.defense.gov/2019/Jul/01/2002152311/-1/-1/1/DEPARTMENT-OF-DEFENSE-INDO-PACIFIC-STRATEGY-REPORT-2019.PDF

[82] https://kathmandupost.com/national/2020/08/22/as-world-sees-rapid-geopolitical-shifts-nepal-needs-a-clear-foreign-policy-experts-say

[83] https://ekantipur.com/news/2020/08/25/159832101497765264.html

[84] https://www.bbc.com/nepali/news-53846492

[85] https://kathmandupost.com/national/2020/07/13/nepal-airlines-decides-to-ground-chinese-aircraft-for-good-to-cut-losses

[86] https://ekantipur.com/news/2020/08/23/1598144142678810.html

[87] http://annapurnapost.com/news/164147

[88] https://kathmandupost.com/national/2020/08/20/after-two-high-level-engagements-nepal-and-india-look-for-a-boundary-meeting

[89] https://ekantipur.com/news/2020/08/18/159771568507891056.html

[90] https://mofa.gov.np/press-release-on-the-eighth-meeting-of-nepal-india-oversight-mechanism/

[91] https://www.bbc.com/nepali/news-53802929

[92] For example, see https://www.indiatoday.in/india/story/china-wants-to-know-why-nepal-young-men-joining-indian-army-1712287-2020-08-17

[93] https://mofa.gov.np/press-release-on-telephone-conversation-between-the-prime-ministers-of-nepal-and-india-2/

[94] https://kathmandupost.com/national/2020/08/15/oli-modi-talk-seen-as-a-step-towards-a-thaw-in-nepal-india-relations

[95] https://mofa.gov.np/official-spokespersons-response-to-media-queries-on-gautam-buddha/

[96] https://www.mea.gov.in/response-to-queries.htm?dtl/32882/official+spokespersons+response+to+a+media+query+on+eams+remarks+at+the+cii+event+on+08+august+2020

[97] https://kathmandupost.com/national/2020/08/09/ndia-gifts-10-icu-ventilators-to-the-nepal-army

[98] https://www.globaltimes.cn/content/1196492.shtml

[99] https://www.huffingtonpost.in/entry/china-afghanistan-nepal-pakistan-india_in_5f215ddcc5b6b8cd63b03c39

[100] https://mofa.gov.np/press-release-on-the-65th-anniversary-of-establishment-of-diplomatic-relations-between-nepal-and-china/

[101] https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1801954.shtml

[102] https://mofa.gov.np/official-spokespersons-response-to-media-query-on-treaties-agreements-on-mutual-legal-assistance-and-extradition/

[103] https://ekantipur.com/business/2020/07/27/159581348596858432.html

[104] https://twitter.com/shen_shiwei/status/1285463518716653568?s=20

[105] https://twitter.com/shen_shiwei/status/1296328637231140864?s=20

[106] http://annapurnapost.com/news/164147

[107] https://www.youtube.com/watch?v=oQeLRYSjTRM

[108] https://www.bbc.com/nepali/news-53417276

[109] https://mofa.gov.np/statement-on-clarification/

[110] https://www.bbc.com/nepali/news-53397973

[111] https://www.bbc.com/nepali/news-53404132

[112] https://ekantipur.com/news/2020/07/13/159464755874844494.html

[113] https://twitter.com/KTnepal/status/1280024186908377088?s=20

[114] https://www.bbc.com/nepali/news-53310311

[115] https://ekantipur.com/news/2020/07/04/159382490151784856.html

[116] http://www.china-un.ch/eng/hom/t1793804.htm

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