Nepal is the new battleground for China and the United States. Beijing shifts into high gear after MCC deal


Beijing not satisfied with the performance of his diplomats in Kathmandu after the Nepalese parliament ratified the US-led Millennium Challenge Corporation or MCC earlier this year on February 27. But he continues to see an opportunity to keep the Himalayan country on his side.

Li Zhanshu, speaker of the National People’s Congress and China’s third leader, arrived in Kathmandu on September 12 to strengthen ties with Nepal and keep the United States at bay. The trip to Kathmandu – part of Li’s four-country trip – aims to ensure that Beijing does not lose any more “friends” in the current geopolitical environment and to signal that Zhongnanhai is reviving its international diplomacy after Covid- 19 has kept the best politicians at home. .

MCC, a US aid agency, has signed a $500 million pact with Nepal to support the country in its development goals. Many have called the MCC pact Washington’s hedging strategy against increased Chinese aid to Kathmandu.

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The fight for Nepal

Li Zhanshu’s visit to Kathmandu is part of Beijing’s efforts to bolster its social and political currency after the United States returns to Nepalese politics.

During Li Zhanshu’s visit, Nepal and China signed a six-point memorandum of understanding on inter-parliamentary cooperation, which will facilitate mutual high-level visits by parliamentarians. The two sides agreed to implement connectivity and infrastructure under the Belt and Road Initiative (BRI), including pending projects. In exchange for Nepal’s aspirations to build more BRI projects, Beijing sought Kathmandu’s support for its “one China” policy.

Although Li’s visit is the most publicized in Kathmandu since that of President Xi Jinping State visit in 2019, outreach to the first in Nepal started earlier in the year. On April 8, Li Zhanshu spoke with Nepali spokesperson Agni Prasad Sapkota when the latter invited him to Kathmandu.

During the April talks, President Sapkota asked Li to pursue promote the commercial relationship between Beijing and Kathmandu by expanding the ports of Tatopani and Kerung, which act as nodal points for land exchange between the two countries.

Li’s visit comes after Liu Jianchao, the head of the Chinese Communist Party’s (CCP) International Liaison Department, visited Kathmandu on July 10.

The Liaison Department falls under the direct control of the CPC Central Committee and carries out political and ideological work on behalf of the party in foreign countries through official and unofficial Chinese entities. The Liaison Department aims to ensure that the Communist Party ideology spreads in foreign countries and its so-called “enemies” do not unite there. Taiwan is one of the department’s main targets. Liu’s outreach to the Communist Party of Nepal and other leftist parties was the central theme of the visit.

Beijing’s efforts to bring Kathmandu into its purview suffered a setback when the relatively pro-Beijing government of KP Sharma Oli collapsed and Sher Bahadur Dueba managed to form a new one.

“Nepal firmly adheres to the one-China principle and does not allow any outside force to use Nepalese territory to engage in anti-China activities,” he added. Xinhua cited Nepali leaders said during Liu’s visit.

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China and the United States lock the horns

Liu may have achieved another goal during his visit as Nepal withdrew from another program the United States wanted Kathmandu to subscribe to – the State Partnership Program (SPP). The US SPP agreement is a mechanism that allows Washington to provide disaster management support to participating countries by sending US National Guard and military personnel. Instead, Beijing called the agreement “a military and security initiative closely linked to the Indo-Pacific strategy”.

China believes the deal will allow Washington to establish a military base in its backyard. Washington maintains that the program has existed for 25 years in more than 90 countries and that the agreement is not a security or military alliance.

“Although the SPP has an apparently peaceful intention, it has deep military objectives with consequences not only on the security of the country but also on the geopolitical situations given the sensitivity of Nepal’s geographical location between India and the China,” he added. wrote reporter Li Yang in an opinion piece for China Daily.

Beijing has tried to deter Nepal by linking the SPP deal to the US Indo-Pacific strategy and calling on politicians in Kathmandu to reject the US sphere of influence.

“Nepal’s decision, which throws cold water on Washington’s attempt to drive a wedge between Nepal and China, may be just the beginning. More countries will give Washington the cold shoulder,” Li Yang added in the column.

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What Nepal wants

While Beijing worries about regional geopolitical competition with the United States, Nepal wants to develop its trade and people-to-people relations with its northern neighbor.

Nepal hopes to boost its economy by seeking additional financial support from Beijing to achieve the hard engineering task to complete the China-Nepal cross-border railway. But worries about withdrawing aid from Beijing and falling into a “debt trap” remain. Nepalese diplomats are trying to allay these concerns.

“All details regarding the railway, including cost and financing, will be discussed and negotiated by the two parties together on the basis of mutual benefit and sustainability, which brings nothing like a trap in debt”, said Bishnu Pukar Shrestha, Ambassador of Nepal to China, in an interview with China Daily.

China may deny claims of undermining India’s interests in Nepal by building the China-Nepal cross-border railway, but that is how Chinese experts describe the project.

“If Nepal has this rail link, it will reduce its dependence on India,” said Lin Minwang, deputy director of the Center for South Asian Studies at Fudan University.

Beijing also believes Kathmandu can be influenced by maintaining a distance from the United States’ Indo-Pacific strategy by deepening relations with Nepalese politicians and expanding people-to-people ties.

Tour guides in Thamel, the hub of tourist activity in Kathmandu, are races learn Chinese because that’s where the big bucks are. After all, mainland tourists flock to the country in large numbers. Restaurants with Mandarin Chinese names can now be seen around Kathmandu.

Nepal’s cultural ties with China go back a long way, but the economic impact of Chinese tourists in shaping Kathmandu’s cultural landscape is changing at a rapid pace.

“Nepal has always seen China as an alternative to India’s often authoritarian political and economic grip on the country, but in the past Chinese infrastructure limitations in Tibet and the Himalayas did not allow this. But in the 21st century, with the Qinghai-Tibet Railway (QTR) making its way to Lhasa and Shigatse, Nepali dreams have been reawakened again,” wrote Amish Raj Mulmi in Kathmandu post.

Li Zhanshu’s visit appeals to Nepalese dreams of greater connectivity in the Asian highlands. With Li’s visit, Beijing wants to guard against US talk of Kathmandu – time will tell if Kathmandu’s aspirations are hijacked by geopolitics.

The author is a freelance columnist and journalist. He is currently pursuing a master’s degree in international politics with a focus on China at the School of Oriental and African Studies (SOAS), University of London. He was previously a reporter for Chinese media at the BBC World Service. He tweets @aadilbrar. Views are personal.

(Editing by Zoya Bhatti)


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