Nepal’s Cross Border Relations with China


On January 28, 2022, the Center for Social Inclusion and Federalism (CESIF) organized a virtual discussion entitled “Nepal’s Cross-border Relations with China.” CESIF’s researcher, Ms. Shraddha Ghimire presented her findings for the research on the same topic at the webinar. Discussants for the topic included Honorable Mr. Divya Mani Rajbhandari, a member of the Foreign Affairs Committee at the House of Representatives; Honorable Dr. Deepak Prakash Bhatt, also a member of the Foreign Affairs Committee at the House of Representatives at the Federal Parliament of Nepal; Dr. Achyut Wagle, noted economist and Associate Dean at the Kathmandu University School of Management; and Ms. Avasna Pandey, Lecturer at the Tribhuvan University’s Department of International Relations and Diplomacy. The panel was moderated by Ambassador Vijay Kant Karna, Executive Chair at CESIF Nepal, while Mr. Ajaya Bhadra Khanal, Research Director at CESIF Nepal, provided further insights into the topic.

The discussion aimed to bring out deeper insights on an inadequately discussed subject of Nepal’s cross border relations with its northern neighbor, China. CESIF had recently conducted a research on the same topic, with Ms. Shraddha Ghimire leading the research – the findings of which she presented at the webinar. Her presentation brought out much of the lesser known facts about this particular border dynamics whilst providing recommendation for mutual benefit. Following Ghimire’s presentation, the commentators put forth their remarks on various issues as detailed below.

Event Details

Date: 28/01/2022

Time: 3 PM – 5 PM

Venue: Zoom Meetings

Number of Participants: 50 which included intellectuals, politicians, former diplomats, and journalist

Border Management and Security

The border at the Nepal side is guarded by a coordinated force comprising Nepal Armed Police and Nepal Army while it is jointly managed by immigration and customs offices in addition to security forces. Ms. Ghimire, on her presentation, shed light on joint mechanism of border management between security personnel from Nepal and China. She further highlighted that the difficult geographical terrains in the northern border, coupled with limited surveillance tools, lack of technology and deployment of limited security forces has impeded border management in Nepal’s side.

Dr. Achyut Wagle stated that one of the key aspects of Nepal-China cross-border relations is national security. He provided insights on the Chinese narrative and suggested that the recent blockade of the transshipment of the goods, other economic activities and restrictive people’s mobility is linked to the national security. He further added that the periodic review of border management is necessary for evidence-based diplomacy as opposed to pre-emptive diplomacy which Nepal usually opts for. Furthermore, Nepal needs to be technologically equipped to manage borders and its security better.

Cross Border Mobility Issues, Trade, and Transit

The visa regulation between Nepal and China allows civilians to cross the border up to 30 KM within Tibet and vice-versa. Smuggling of traditional and mountainous herbs, television, gold, pashmina, and red sandalwood via the border is frequent, as revealed by the research, together with human trafficking for manual labor and prostitution. However, there are restrictions on Sherpa and Lama descent to go to Tibet for religious purpose, owing to its political sensitivities. The research also divulged that the borders have been completely closed due to Covid-19 since 2020 and no joint border surveillance and other mechanisms have taken place. Only 3 – 5 trucks have been entering Nepal, daily, which has immensely impacted local traders and other businessperson.

Nepal’s relationship with China is based on two fronts – commerce and political balance. Ms. Avasna Pandey stated that China’s aggressiveness owing to its confrontational policy while dealing with its neighboring country has resulted in tighter security and border closures.

Similarly, Ajaya Bhadra Khanal while speaking about trade and transit, alluded that there has been a virtual blockade of transit point since 2015 and now there’s one way control of the same. He posed a question to the panelists as to “What happened to the discourse of Nepal’s right to access of sea-ports?” He also mentioned the need of trade promotion through import substitution.

Dr. Wagle emphasized on the human perspective in the cross border relations, including culture, tradition, languages, and ecological system. The ground-reality of the bordering districts fail to make way for real discourses. He stated that Nepal and China have signed numerous instruments to enhance trade, connectivity, and infrastructure; and questioned the status of these instruments. The data shows that the trade relations with China is mostly unilateral as for the last three consecutive years, the import-export ratio between China and Nepal is 1:100. While Nepal exported Nrs. 2 billion worth of goods, it imported Nrs. 200 billion worth of goods from China.

Hon. Dr. Deepak Bhatt pointed out that trade imbalance with China should be addressed through timely diplomatic initiatives. “We have set mechanism to resolve all the issues and these mechanisms should be invoked while resolving any issues we have with China,” he added.

Hon. Dibya Mani Rajbhandari talked about the need of Nepal government’s effort to address the problems of people residing on the bordering districts understanding their plight to curb cross-border human trafficking. Similarly, there should be a detailed study on how to address trade imbalance and to regulate flow of goods.

Chinese Foreign Aid and Development Cooperation

The presenter mentioned China has been using foreign aid as a strategic tool to counter India’s influence in Nepal. China’s FDI is mainly concentrated in the northern districts of Nepal bordering with the Tibet autonomous region of China. China International Development Cooperation Agency (CIDCA) plans to finance 15 pilot development projects in 13 of the 15 districts that borders with Tibet. Further, China’s largest investments are directed in Rasuwa, Sankhuwasabha, Solukhumbu and Manang districts, while it has funded the construction of dry ports in six border points. The major sector of China’s investment is hydropower, brick industry, agriculture, and steel and construction sector. Moreover, local government units in northern border districts have received Nrs. 3 million from China. However, this funding remains inconsistent with Nepal’s International Development Cooperation Mobilization Policy.

Mr. Khanal emphasized on the huge gap between the China’s aid commitment and actual disbursement. China’s official assistance to Nepal has remained stagnant since 2015.  The official engagement between Nepal and China is also in standstill since 2015 with no significant developments. On the contrary, Nepal has seen a gradual increase in Chinese FDI since last few years.

Nepal-China Border Issues and Concerns

Ms. Ghimire stressed on the sensitive issue of land encroachment and construction of infrastructure by China within Nepal’s land. China’s encroachment has been reported in Sankhuwasabha, Rasuwa, Sindhupalchowk and Humla. The National Investigation Department has stated that 15 border pillars have been shifted in Humla. China has attempted to construct a 145 meters permanent canal in the same district. Similarly, out of 7 pillars, pillar number 60 is missing at Dolakha.

Mr. Khanal questioned whether fear has become the most dominant element in Nepal-China relationship. The people inhabiting around the border feared retribution from the Chinese side after the government formed the task force to study the border issue in Humla.  This narrative of local people is also reported on recent government’s investigative report on border encroachment in Humla. Furthermore, government’s reluctance to take up the border issue with Chinese counterpart raises a lot of suspicion. It is clear that Nepal government does not want to go beyond Nepal- China friendship rhetoric.

Meanwhile, Ms. Avasna Pandey pointed out it is important to understand Nepal-China relation in historic context to understand China’s current shift from conciliatory to confrontational foreign policy.

Hon. Dr. Deepak Bhatt stated that Nepal should gather evidence to support its claim regarding encroachment in northern border and then have a dialogue with China to resolve the border issue. Similarly, Hon. Rajbhandari stated in-depth studies are required to verify the current status of borders in other border districts including Mugu and Dolpa. Likewise, Dr. Wagle also stated that mutual consultations and dialogues are the best measures to resolve border disputes

The panelists stressed on the reluctance of the Nepal government to acknowledge the border issues with China time and again. While the border disputes with India are often politicized in the public front, border issues with China are often sidelined. Here, Mr. Khanal connected his rhetoric of fear of Chinese retribution among the Nepali politicians and bureaucrats to confront border issues with Chinese authority. Meanwhile, Hon. Bhatt pointed out language barriers and cultural differences with China as a challenge to resolve many outstanding issues.

The webinar concluded with a general understanding that there are issues with China in multiple fronts, including border, trade and transit, border management, and cross border mobilities among others. Government needs to strengthen its bilateral mechanisms and strive to resolve these issues through evidence-based diplomacy. Further, the panelists agreed on the need of open discussions regarding the Nepal-China relation among the policymakers, bureaucrats, researchers, academicians, businessmen among others.

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