Prof. Wang Li / Himal Neupane

International politics seldom pays proper attention to the role played by small states due to their limited capabilities or resources. China is rather an exception. Since 1955 when China and Nepal formally recognised each with, the bilateral relations have undergone substantial developments. In 1996 the two countries, for the first time, agreed to build up a good-neighbour partnership of the 21st century and on October 12, 2019 the two nations formally announced to upgrade their relations to a strategic partnership of cooperation featuring everlasting friendship for development and prosperity. As Chinese President Xi put it, “our two peoples have shared weal and woe, and set an example of friendly exchanges between neighbouring countries.’
For sure, there is nothing free in the realm of international politics since realists argue what China and Nepal need from each other in terms of geopolitics and geo-economics? This kind of question is quite sensible but also cynical. In fact, historically China and Nepal had been at good terms for a few centuries, and during the British colonial era, Nepal actually acted as a natural buffer state between imperial China and colonial India. Since 1949 when new China was founded soon after the independence of India, Nepal ended its isolation and forged amicable ties with India and China as well. Initially, Nepal had close ties only to India in terms of cultural, ethnic and even military affairs, but it has never accepted external domination.
Over the past decades, particularly since the 1980s, China has transformed itself into the world’s second largest economy with its astonishing manufacturing capability and technologies. Due to this, China has provided more assistances to Nepal and other neighbours to share Chinese public goods, especially in the realms of the infrastructure projects and alleviation of poverty. For example, President Xi announced in 2018, “In the coming three years, China will provide assistance worth RMB 60 billion to developing countries and international organisations participating in the Belt and Road Initiative (BRI), and contributing an additional RMB 100 billion to the Silk Road Fund.” As a developing country nestled in the heart of the Himalaya, Nepal surely needs to expand its infrastructure through involving itself into the BRI with the view to exploring and finally harnessing its huge potential sources —hydropower—for export.
For sure, China also needs to maintain its border areas peaceful and stable in light of its “NEWS (North-East-West-South) strategy” that means while China tries to consolidate its entente partnership with Russia on the North and pacifying its East coast, it aims to sustain the BRI projects to the West and the maritime silk route to the South. This is the core of the NEWS strategy initiated by the Chinese elite since President Xi took power. Consider Nepal’s strategic location and political stability, China is sure to promote the bilateral ties as the two previous MoUs were signed in Beijing including to rebuild Chinese—Nepali transit road network agreements. It will help northern Himalayan areas get an alternative transit route and also facilitate the local economies, as much important part of the BRI as the economic corridor between China and Pakistan. Moreover, since 2016, a freight rail line was even completed linking Lanzhou, a heavy industrial city in the West of China through Xigaze in Tibet, down to the capital of Nepal.
During Xi’s visit to Nepal this time, the two governments issued a joint statement on Oct. 13, agreeing on more practical cooperation in the new phase of bilateral relations. For example, a few key points serve to inllustrate that first, the two sides agreed to take the BRI as an opportunity to deepen mutually-beneficial cooperation in all fields in a comprehensive manner, and it vows to advance the construction of trans-Himalayan Multi-Dimensional Connectivity Network. They also reiterated their commitment to expanding cooperation on the Kathmandu-Pokhara-Lumbini Railway Project. Further cooperation including the Zhangmu/Khasa port, the Lizi/Nechung port, and the three North-South corridors in Nepal were also mentioned in the statement.
Second, the two sides will hold comprehensive discussions to strengthen trade relations, and China will take positive measures to increase Nepal's exports to China. For this, Nepal will facilitate Chinese banks to open their branches and other financial services in Nepal. Third, China promises to help Nepal shake off the status of being a least developed country as soon as possible, become a middle-income country by 2030 and achieve the sustainable development goals over the same period.
Sure, any close cooperation between China and Nepal is never bilateral, that means there is always local, regional and even international concerns, suspicions and even hostilities towards either China or Nepal or both. Geopolitically, India is the first power, understandably, to feel uncomfortable if not hostile. This is the reason why President Xi made his first trip to India prior to his state visit to Nepal, and held comprehensive talks with Indian Prime Minister Modi. Second, China and Nepal also need to coordinate each other deftly to convince other neighbours such as Sri Lanka and Bangladesh that any sort of their cooperation would never be exclusive but inclusive and open all others in the whole South Asia. In a geo-economic term, China has reiterated that China would not seek to use its economic or financial leverages to “dictate” the local affairs of the recipient countries. Yet Chinese companies also need to move in cautiously and read the local legal and political rules before jumping into the businesses.
As Xi said, China is the largest developing country and also a learning country all the time. In order to promote China’s strategy to link the countries involved, mutual respect and equality are the prior condition to the long-term cooperation. In light of this, we expect Xi’s visit to Nepal now will unlock new strategic opportunities for bilateral relations, as well as positively influence their ties with India by improving the prospects for trilateral cooperation.
This is a balanced approach to prevent an open rivalry between the key member states of the BRICS and the SCO over their common neighbours. As it is argued that Xi’s visit to both India and Nepal might be the very time to enhance the trilateral understanding among Nepal with its giant neighbour. Nepal, though a much smaller state compared to China and India, could play positively a role as the bridge for building a more trust-based relationship across this region.
President Xi revealed to his Nepali counterpart Bidhya Devi Bhandari that the two sides should work closely to carry out the construction of a trans-Himalayan connectivity network, and expand exchanges and cooperation in various fields. Nepali President Bhandari stressed that the Chinese people will realise the Chinese dream of national rejuvenation, which will definitely bring benefits to Nepal and help promote regional peace, development and prosperity.

(Li is a Professor of International Relations and Diplomacy at the School of International and Public Affairs, Jilin University, China. Neupane is a post-graduate on Chinese diplomacy.)