Nepal China Relationship

Nepal-China Relations

By Dr. Anil Sigdel, February 2018

 Unlike the historical, cultural and trade ties between Tibet and Nepal, Nepal and China were two distant and largely unfamiliar worlds. The introduction of Buddhism in China in the first century had opened the window for at least a Nepal-China cultural interaction. In the fifth century, the Chinese Buddhist scholar Fa-hsien visited Nepal and India and, subsequently, the Nepalese Buddhist scholar Buddhabhadra accompanied Fa-hsien to China, among other scholarly visits and exchanges. Similarly, in the thirteenth century, the Nepalese architect Arniko from Kathmandu was invited to China; he is known for building the White Stupa and the Miaoying temple in Beijing. However, by the 18th century, the Nepal-Tibet-China war added a state-to-state political dimension.

The political relation was characterized by a token of amity and politeness, quinquennial missions, and conferment of Chinese titles on Nepalese rulers (but also Rana’s intent to exploit China by covertly supplying opium). While Rana prime ministers apparently kept China close to balance the British in India to safeguard Nepal’s independence and sovereignty, the acceptance of Chinese titles by the Rana rulers evolved into open Chinese claims of suzerainty over Nepal in 1910. In 1913, a proposal came from China to include Nepal in the union of the “Five Affiliated Races” (the Chinese, Manchus, Mongolians, Tibetans and Muslims). The Rana PM Chandra Shamsher immediately protested, as did the British government of India, and the five-yearly mission to China and the receiving of Chinese decoration came to an end. And the Rana regime managed to get the British recognition of Nepal’s sovereignty in 1923.

The rulers’ acceptance of the symbolic Chinese titles was (mis)interpreted as Nepal being a vassal state of China, a China which was very much weakened in that period.  Besides, despite the obligation of the peace agreement of 1792, China’s refusal to come to Nepal’s help during the Anglo-Nepalese war (1814) citing the fact that the war was fought beyond the Tibetan territory had rendered any suzerainty claims baseless. Due to such claims, and Nepal’s repudiation, the bilateral relations went downhill for over four decades.

Nepal and Mao’s PRC

But things changed as a very new order evolved in the aftermath of decolonization. India became independent from the British rule 1947, Mao established the People’s Republic of China in 1949, and Nepal ended the Rana oligarchy in 1950. The post-colonial alliance of the third world countries based on the principles of peaceful coexistence and non-alignment movement gave the opportunity to Nepal and China to seal formal ties. The first meeting of the Nepal’s king Mahendra and the Chinese Premier Zhou-Enlai in the Bandung conference in Indonesia in 1955 –which paved the way for the non-alignment movement – immediately culminated into the establishment of diplomatic ties between the two countries, but Nepal soon lost its hegemony over Tibet. As China took control of Tibet, it started putting pressure on Nepal to abandon Nepal’s rights and privileges over Tibet which it had enjoyed following the 1855/56 Nepal-Tibet war.

Tibet was yet another reminder for Nepal, as a small state lying between the two big and powerful countries, of its fragility. Nepali Congress leader B P Koirala was quite unhappy and confused about the developments. He explained in his autobiography that he was asked by Nepal PM Tanka Prasad Acharya, who was under a lot of pressure from both China and India, for his quick advice on the matter. And when he asked for Indian PM Pandit Nehru’s view on that, to his surprise, Nehru also advised him to abandon Nepal’s rights over Tibet and cooperate with China as a demonstration of good faith, which Nehru said would be helpful for Nepal to have a good relationship with such a big nation like China. Disappointed, he told Nehru: “you gave Tibet to China on silver platter!” Nehru responded: “So what should I do, send troops to put Dalai Lama on his throne?”  Nevertheless, Nepal government decided on its own to cooperate with China.

When Koirala, as the first elected PM of Nepal, met Zhou in Beijing in March 1960, Zhou conceded that China wanted to befriend Nepal and help it financially in its endeavor to develop; however, he insisted that he would give less than what India did.  Subsequently, in his visit to Kathmandu in April 1960, to Koirala’s dismay, Zhou again emphasized the importance of India for Nepal, and gave him the impression that he saw Nepal within India’s sphere of influence. Zhou went on say that “we will not do anything that will cause discomfort in India”, although the India-China relationship was already crumbling. Another issue was the border settlement. During Koirala’s visit in Beijing, both sides agreed to smoothly settle the border on the basis of “existing customary line” through “friendly consultations.” In Beijing, Mao Zedong said to Koirala:  “we do not want a single inch of Nepalese land. Can we sign a border treaty and erect boundary markers?”. Both sides agreed.

However, the shock came to Koirala regarding the “sentimental question” of Sagarmatha /Mt. Everest/Chomolungma when Mao offered a “half for each side.” While Koirala never accepted that Nepal share the peak with China, he conceded China would not need Nepal’s permission to climb the Everest on the Northern face, giving de facto recognition to China’s position. Nevertheless, King Mahendra and China concluded the Nepal-China Boundary Treaty in Beijing giving a “permanent and overall settlement of the problems between the two countries left over by history” with the Mt. Everest lying on the border line. King Mahendra also accepted the Chinese proposal to build the Arniko highway, from Kathmandu to the Tibet/China border Kodari/Khasa/Zhangmu, a hundred-kilometer corridor; a proposal which was rejected by B P Koirala.

Meanwhile, with the Nepal-China economic aid agreement in 1956, the relationship matured into a phase that marks a respect for Nepal’s sovereignty, mutual harmony and Chinese aid. As Nepal pursued a one-China policy, China started major industrial and infrastructure gifts for Nepal’s economic development. Some state-owned industries with Chinese assistance that became household names in Nepal are: Bansbari Leather and Shore Factory Ltd. (1965), Bhrikuti Paper and Pulp Ltd (1985), Hetauda Textile Factory (1976), Butwal Thread Factory, Lumbini Sugar Mills and many more. Similarly, the ring road and trolley bus system in Kathmandu valley and the Kathmandu-Pokhara highway were among the visible Chinese contributions. But by the time the monarchy-led Panchayat system ended in 1990, the Chinese government investment had been in decline. But Chinese firms were increasingly involved in different projects. The post-Panchayat government of the Nepali Congress pursued market liberalization, thus sold those underperforming state-owned factories to private sector. The former Chinese Ambassador Qiu Guohang in 2010 expressed his sadness about the plight of those factories that were given to Nepal as gifts.

Politically China neither had much interest in meddling nor could influence effectively on the ground vis-à-vis domestic politics, India and the extra-regional powers. Therefore, apart from morally siding with the monarchy and providing arms on its request, China could not influence the growing tide to change the regime from Panchayat to parliamentary system. In the same manner, the monarchy ended for good in 2006, and China’s role remained similar. However, from there on not only Chinese goods started to flood Nepalese market as with the whole South Asian region, but also its political and financial engagement with the country saw a sharp rise. So much so that the leftist alliance’s impressive win in the recent federal elections is seen by many national and international observers as the result of China’s active backing of certain left leaders, mainly K P Oli, in the context of a strong anti-India sentiment in the country.

Concluding Remarks

China’s engagement with Nepal has raised in the recent years in Nepal especially because of China’s new found economic might. The post-conflict Nepal also created a condition that would increasingly draw China in to enable Nepal’s independent personality particularly against India. Moreover, China with its “new era” of internationalism has taken a policy that not only brings the projects Chinese firms are carrying out in the world under the umbrella of Belt and Road initiative, but also offers partner countries the possibility to carry out massive infrastructure investments. China’s growing engagement in Nepal is not unique to China-Nepal relations but a part of China’s larger policy of going global. But what is really unique is China’s Tibet sensitivity in Nepal. Especially after the wide pro-Tibetan protests ahead of the 2008 Beijing Olympic, Nepal’s importance grew further for China. Beijing therefore elevated its level of engagement with Nepal, especially with the security agencies in the country. However, the questions still hang in the air: to what extent is China willing to go in terms of influencing Nepal’s politics? To what extent Nepalese stakeholders can rely on China or is it a good idea in the first place? In what ways, if at all, Chinese inroads into Nepal help Nepal’s productivity, create job market for the working age population and reduce trade deficits with both India and China?

Moreover, despite Nepal’s good faith towards China, during the Indian PM Modi’s visit to China, the two countries negotiated some trade promotion deals through the Lipu-lekh pass, which, according to border experts in Nepal, is undoubtedly Nepal’s territory, without any consultation with Nepal. This incident was yet another painful reminder for Nepal of its fragility between the two giant neighbors. Nepal’s situation does resemble to some extent that of Cambodia, Laos and Myanmar since they all share borders with China and have deep economic relations with China. However, Nepal also has deep relations with India who is China’s rival. In conducting its neighborhood relations, Nepal only has hard strategic choices.

Dr. Anil Sigdel is the Director at Nepal Matters for America, Washington DC

Nepal Matters for America, 2018