Originally published on the ICS Delhi Blog on 29 April 2016.
The Chinese government might not be able to play a prominent role in Nepal for now, given both Indian dominance and sensitivities. However, China appears to be using its provinces such as Tibet, Yunnan and Sichuan to exercise influence in a different, apparently less threatening way.
The major objective of China’s diplomatic strategy in Nepal has been to ensure that Kathmandu blocked the flow of Tibetan refugees into its territory. In November 2014, the frontier police force in Tibet and the armed police and fire department of Nepal conducted a joint exercise and during his visit to Nepal the following month, Chinese foreign minister Wang Yi also laid the foundation stone for a police academy gifted to Nepal to train officers of its Armed Police Force that guards districts bordering Tibet. The number of Tibetans entering Nepal from China, it must be noted, has fallen from about 2,500 in 2008 to just about 200 in 2014.
While undermining India’s influence in Nepal has, in this context, been probably only a secondary priority, over time, and especially since Xi Jinping announced the ‘one belt, one road’ (OBOR) policy, there have been a number of policy initiatives from China that while promoting Nepal’s role in the region are aimed at bringing a degree of greater balance between India and China.
Further, certain Chinese provinces appear to have increasingly important roles in this endeavour.
Easing Into Nepal: the Provincial Route
Nepal only borders the Tibet Autonomous Region (TAR) among China’s provinces, but following the earthquake, it was not just TAR but also Yunnan and Sichuan provinces that were tasked with carrying out cooperation with Nepal in reconstruction, and disaster prevention and reduction among other tasks. Meanwhile, Nepal and its scholars, diplomats, journalists and entrepreneurs, have for some time been regular participants at various China-South Asia meetings and conferences organized in Yunnan and Sichuan provinces.
While TAR is rather more tightly controlled and supervised by the central government owing to its ethnic minority character and political instability, its government was involved to some extent in a China-India-Nepal trilateral Track 1.5 forum in 2014 and 2015. Similarly, the India-Nepal-China Economic Corridor idea that the Chinese have proposed to New Delhi, must also involve TAR.
During his visit to Nepal in December 2014, the Chinese foreign minister, Wang Yi, alongside expressing his gratitude for Nepal’s support on China’s core interests including the issue of Tibet, added that Beijing would encourage TAR to boost cooperation and exchanges with Nepal.
Nepal has been Tibet’s largest trade partner since 2006. According to data from Lhasa customs, bilateral trade with Nepal accounted for 58.5% of Tibet’s total trade volume in 2013. Total volume of cross-border trade at just one land port, Jilung reached 28.93 million yuan (US$4.7 million) between January and October 2014, with year-on-year growth of 660%. A ‘Nepal-China’s Tibet Economic and Trade Fair’ took place in Kathmandu in November 2015 to further encourage economic ties. The event was jointly inaugurated by Dong Mingjun, the TAR Vice Chairman, and Wu Chuntai, the Chinese Ambassador to Nepal.
Nepal itself has paid attention to the provincial level in China. Nepalese President Ram Baran Yadav was in Lhasa in April 2015 where he met with Losang Jamcan, TAR Chairman and Nepalese Ambassador to China Mahesh Kumar Maskey was stating in 2015 that Lhasa’s proximity to Nepal would be an important factor in future developments under the OBOR. In both instances, much hope was placed on the completion of a railway line between Lhasa and Nepal.
Implications for India
When Chinese Vice Minister for Foreign Affairs Chen Fengxiang, visited Kathmandu on the eve of Wang’s visit in November 2015, he told his hosts then scrambling to finalize the constitution by a January deadline, ‘that if at all Nepal goes federal, it should have no more than three provinces, and with the provinces oriented north to south, touching both China and India’. The Chinese position, especially on the nature of federalism that Nepal should adopt has everything to do with the instability in Tibet and clearly contradicts that of India which is much more comfortable with an ethnicity- or language-based federalism.
Given this Chinese focus on Tibet and its attempts to influence Nepal’s politics and economy, it should not surprise that China has committed to Nepal US$1.63 million annually from 2014 to 2018 to help Nepal develop its 15 northern districts bordering the TAR under an MoU signed by the two countries in November 2014.
Chinese scholars have tried to deflect Indian suspicion or criticism by focusing on the non-political in the Nepal-Tibet relationship. For instance, Hu Shisheng of the China Institutes of Contemporary International Relations in Beijing has stated that the line connecting Tibet to Nepal would ‘add new momentum to the region’s tourism and service sectors’. Fu Xiaoqiang, also of CICIR, declared China’s aim to be one only ‘to improve local economies and people’s livelihoods’.
These declarations might well be true but given the continuing instability in Tibet, surely they tell only part of the story. That said, if India is to retain influence in Nepal over the long term without simultaneously generating disaffection, it might do well to take a page out of the Chinese book and allow its own states to drive economic engagement with the newly federal republic.