• China and Nepal discussed various issues related to their bilateral interests, including strengthening military cooperation between the two countries, issues related to the resumption of training and student exchange programs, and follow-up actions for defence assistance affected by the Covid-19 pandemic.

Key Highlights:

  • Nepal established relations with China in 1955. In 1956 it recognized Tibet as a part of China and signed the “Treaty of Peace and Friendship” in 1960. 
  • In the 1970s, the King of Nepal, Birendra, proposed Nepal as a “zone of peace” between India and China. India did not show strong interest, but China expressed support.
  • The relationship between India and Nepal took a turn for the better in 2015, when India imposed an informal but effective blockade on Nepal, resulting in a severe shortage of fuel and medicine in Nepal.
  • As tensions with India increased, China reopened its border with Nepal in Tibet.
  • After the recent visit of the Chinese President, Nepal reaffirmed its commitment to the “Single China Policy”, promising not to allow any troops to use its territory against China.

China’s Interest:

  • Although Nepal and India have open borders, people can move freely across the border; more and more China is trying to replace India as Nepal’s largest trading partner.
  • India is the largest economy among South Asian Countries and has become the leader of South Asian countries. China wants to contain India’s growing power & status, which may threaten China’s dream of becoming a superpower.
  • Therefore, maintaining a balance of power in favour of South Asia and ensuring Nepal’s active cooperation to prevent its competitors from using the country for anti-China activities have become the main strategic goals of Beijing’s Nepal policy.
  • The northern border between Nepal and China is entirely located in Tibet. China believes that security cooperation with Nepal is essential to control Tibetan affairs.

Nepal’s Benefit:

  • For Nepal, China is a potential supplier of goods and aid for its economic recovery. Nearly half of Nepal’s population is unemployed and more than half is illiterate.
  • At the same time, more than 30% of Nepal’s population lives in poverty. In order to solve internal problems, Nepal needs to contact China to solve its poverty and unemployment problems.
  • Nepal and China will make progress in the negotiations and run counter to India’s “Big Brother” approach.
  • Through the China-Nepal Economic Corridor, Nepal seeks to end India’s dominance on its trade routes by strengthening ties with China.

India’s Concern:

  • In view of the difference in strategic weight between China and Nepal, security diplomacy can be used by China as a tool to interfere in Nepal’s internal affairs.
  • Since Nepal is India’s buffer country, seeing Nepal enter China’s sphere of influence will not serve India’s strategic interests.
  • In addition, China’s interest in “Security Diplomacy” is not limited to Nepal.
  • China has strong financial resources, and it is difficult for India to control the expansion of China’s influence in Indian neighbourhoods.
  • The China-Nepal Economic Corridor may cause China to dump consumer goods through Nepal, which will further deteriorate the trade balance between India and China.