Li Zhanshu, the Chairman of the Standing Committee of the National People’s Congress arrived in Kathmandu on September 12 leading a 67-member delegation for a 4-day visit. This marks the third high-level visit from Beijing within a span of a few months after the parliamentary ratification of the Millenium Challenge Corporation Compact last February. Chinese Foreign Minister and State Councillor Wang Yi had visited Nepal in March, and Liu Jianchao, the head of the International Liaison Department of the Chinese Communist Party, had visited Nepal in July. During the visit, Li met with President Bidhya Devi Bhandari, Prime Minister Sher Bahadur Deuba, Foreign Minister Agni Prasad Sapkota and other high-level representatives from mainstream political parties of Nepal. The dialogues mainly centred on relevant issues pertaining to Nepal-China relations, with a focus on the Belt and Road Initiative Agreement signed between the two in 2017.
A six-point MoU was signed to continue for 5 years by the Honourable Speaker of the Federal Parliament Agni Prasad Sapkota and Li Changshu, Chairman of the National People’s Congress Standing Committee of the People’s Republic of China. In the six point agreement, both parties have agreed to focus on strengthening mutual trust, respect each other’s independence, sovereignty and integrity and support each other’s core interest. Likewise, both sides will try to increase inter-parliamentary exchange and cooperation at all levels through multilateral means. Similarly, both sides will give priority to high-level visits between Nepal and People’ Republic of China, along with exchanges of contacts between the legislatures of both countries. Both parties will promote parliamentary friendly groups to increase their engagement playing roles in strengthening the mutual relationship.The MoU also focuses on the issues relating to strengthening mutual relations under the framework of regional and global organisations and giving importance to facilitating the mutual benefits by means of enhancing inter-connectivity as per agreements including BRI among others.
Frequent high-level visits from China after the parliamentary ratification of the MCC, rejection of the US State Partnership Program (SPP), and just before the federal and provincial elections set to take place in November, have raised many questions. In the past few years, China has increased its engagement and has shown tendencies to interfere in the internal affairs of Nepal. China openly commended Nepal’s decision to reject SPP, which China had claimed to be a part of the US’s Indo-Pacific Strategy, and had also lobbied against the parliamentary ratification of the MCC pact. Further, Liu Jianchao, during his visit, had urged the communist parties of Nepal to come together for the forthcoming polls, reconciling their differences and conflicting interests. Communist Parties in Nepal and CCP share the same ideology, making it easier for China to bolster its influence if and when a communist party runs the Kathmandu administration. China was making efforts to push for the communist coalition in Nepal.
This time around, significant dialogues were also held on issues surrounding the Belt Road Initiative (BRI), the interconnectivity with Nepal, and the trade prospects. BRI was introduced back in 2013 by China, and Nepal signed an MOU in 2017. As both the countries have shown less push in implementing the BRI agreement and the infrastructural projects under the initiative have been in limbo for quite a while now. This time, views were exchanged regarding the importance of the implementation of the BRI agreement, however, whether or not the agreement gets implemented is yet to be seen.
Unlike MCC, BRI has loan components, which might pose economic risks for Nepal. China, in recent times, has been heavily blamed for the “debt-trap diplomacy” as it has been providing developing countries with commercial loans, and in some cases, those countries have failed to pay China in time. Those countries then are made to offer significant concessions to China which has induced skepticisms regarding financial benefits of projects undertaken with Chinese loans. Especially with the ongoing economic crisis in Sri Lanka, China has been accused harshly for laying this trap, and as a result, this has led to reduced interest of developing countries in accepting Chinese projects. Thus, the current Deuba administration and some political parties have had apprehensions regarding the financial aspect of the BRI projects.
On t he other side, immediately after Li’s visit, China partially opened border points, particularly in Rasuwagadhi, and let the containers stuck at the borders for months. China had unilaterally imposed a soft embargo on Nepal-China border points under the pretext of Covid-19 pandemic which remained for years. This move to resolve border issues during the high-profile visit could be read as China’s signal of its readiness to solve the unilaterally-imposed border issues.
Given the fact that the federal and provincial polls are nearby, perhaps, this visit could have been waited for a few months. A high-profile visit from a neighbour-superpower at the eve of elections doesn’t carry good diplomatic signals. Despite having a good relationship with China, the rapid change in the nature of Chinese engagements has induced many challenges to Nepal – both in the domestic and diplomatic fronts. Although China’s attempt to push for the communist electoral coalition has failed, it is only likely that China will try to influence Nepal’s internal dynamic even after the November election. Nepal has already been made as a boxing ring in the geopolitical competition among the superpowers. And these types of Chinese approaches might further drag Nepal into the geopolitical tensions in future.