Nepal China Agreements

Nepal China Agreements

CESIF Nepal Blog / Article, International Relations, Thematic Areas Leave a Comment

Many preliminary negotiations between Nepal and China concluded to agreements this week. Agreements with China were made with all tiers of investors: Beijing-the central government, Yunnan-the provincial government, and private Chinese companies. Apart from China, Nepal also signed deals with Bangladesh on tax exemption, and with Japan regarding labor agreement.

China, the trade giant, requires massive amount of energy to fuel its production; hence China would like to invest in a guaranteed source through which it could reach its requisite amount of energy needed each day. If it was not for China’s growing energy need, Nepal might have never thought about its prospect on petroleum production.

China’s sphere of influence is growing along with its economy. China’s involvement in Africa and Asia had the world conceptualize different theories and related consequences, some of it coming true sourcing to recent case of Hambantota port of Sri-Lanka. China’s investment pledges in the Balkans and recent negotiation with Italy shows that China is approaching to its Eurasian strategy of connecting countries with Chinese trade.

The US had always tried to control Asia as to restrain rise of another great power. The US lost its grip after the economic recession of 2008, while China used Beijing Olympics 2008 as an international communication tool to advertise its mastery.

The issue now is, should Nepal worry ‘debt-trap diplomacy’, or is it just an unflattering US-European concept to suppress Chinese influence. The suspicion grew to certainty as China acquired Hambantota port from Sri-Lanka. China was alleged of its imperialistic intent behind BRI. This case influenced Malaysia and Sierra Leone to shun BRI. Nepal, on the other hand, should not be overwhelmed by these ambitious projects. Experts have even confirmed that, with little financial support, Nepal itself is capable to run some of the proposed BRI projects without Chinese investment. The agenda behind Nepal seeking China’s help might be nation building, but the government should not fail to understand the backlash of national debt.

Author: Kunja Rai

Photo: Sushma Bhatta

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