China's President Xi Jinping speaks during a welcome dinner in Kathmandu, Nepal, October 12, 2019. Photo: AFP via The Rising Nepal/Handout

Xi Jinping’s visit to Nepal last month was welcomed with much fanfare, for it was the first visit by a Chinese president in 23 years. His visit was not only watched with interest in Nepal but was analyzed with much scrutiny by the United States and India.

The visit may have been a bilateral one but it had all the credentials to attract geopolitical attention. Nepal’s geographical location between two major powers in terms of size, population, economy and military might makes it an interesting case for the watchers of geopolitics.

China makes its move

Although Nepal and China established diplomatic relations 70 years ago, they have shared a relationship that dates back to ancient times. Nepal bears significant strategic value for China, though the nature and scope of the ties have evolved over the centuries. While trade through Kathmandu was the defining element in Sino-Nepalese relations in ancient times, security issues pertaining to Tibet have taken precedence over the last several decades. With Xi Jinping’s rise to power, his vision of a Belt and Road Initiative (BRI) provided an apt opportunity for Nepal and China to broaden the horizons of their cooperation.

Chinese foreign policy was never seen as proactively asserting its influence in South Asia and the world in general until the conceptualization of BRI. Not so any more. Over the years Chinese influence has gradually increased in South Asia – and Nepal – much to the concern of India, which sees it as an encroachment on its traditional sphere of influence.

The most significant aspect to be noted from Xi’s visit to Nepal is the mention of elevating the bilateral relationship to a strategic partnership of cooperation for development and prosperity. The use of the term “strategic” was carefully inserted into the joint statement issued after Xi’s visit. It implies that China is no longer willing to play a passive role in Nepal. Similarly, he stated that China would fully support Nepal becoming a “land-linked” state instead of a landlocked one.

Xi also announced an aid package of nearly US$500 million. A lot has been said about China’s perception of Nepal as the “gateway to South Asia.” This can turn out to be a reality only if India’s interests are aligned to it. However, this remains wishful thinking considering the unpredictable nature of Sino-Indian relations. India and China have built a good trade relationship, but realism and not Nehruvian idealism guide their foreign policies when it comes to exerting their influence in South Asia.

China’s biggest concern in Nepal is actually not India. In fact, Beijing is wary of how the US is trying to influence Nepal through its Indo-Pacific Strategy (IPS). Although the US has denied that its Indo-Pacific Strategy is directed toward containing China, the late American diplomat George Kennan’s Cold War-era theory of containment never seems to grow old although the actors might have changed with the times.

The US feels that the Nepalese apathy toward the IPS is due to pressure from China. However, it needs to be made clear that since Nepal’s foreign policy is guided by the policy of non-alignment, it can in no way align with or enter an alliance against any particular country. Beijing feels that Washington will always try to fuel anti-China activities by inciting the Tibetans. Therefore, the geographical as well as geopolitical role of Nepal comes to the fore in all these equations, and this is where China has found Nepal to be a true and reliable friend.

Both Nepal and China have felt that connectivity is the most important factor to increase trade and people-to-people contacts. While cross-border railway connectivity has been a much-hyped issue in Nepal, it is fair to assume that such a prospect is a long way off because of the sheer magnitude of difficult terrain and costs. Nepal and China should ideally set short- and long-term connectivity visions. Before the railway link is built, both countries should rapidly expedite the construction and upgrade of north-south highways at different border points, which can lead to an increase in trade activities.

Some even claimed that Xi’s visit would herald a new era where Nepal could rely on China as an alternative to India. However, the fact remains that given the critical geopolitical situation of Nepal, China and India can be complementary forces for the development of Nepal rather than exclusive ones.

India for status quo

It is surprising to see how India has lost its once monopolistic influence in Nepal to China as well as Western powers over the years. Indo-Nepalese relations have come a long way since India’s first prime minister Jawaharlal Nehru stated that he considered the Himalayas to be the boundary between India and China. India has traditionally considered Nepal its back yard although their bilateral relationship has seen several ups and downs throughout history.

Therefore, Xi’s visit was watched with much scrutiny in India. The Indian media were quick to point out how Nepal had accorded an unprecedented welcome and importance to the Chinese president. Such a portrayal reflected mere suspicion and fear rather than reality. The traditional mindset of India’s politicians, bureaucracy, and security and intelligence agencies that Nepal should in no way cozy up to any  country other than India should change. Past events have shown that India has often been unnecessarily responsible for implementing wrong foreign-policy choices with respect to Nepal.

Because of its geographical proximity, India cannot be displaced by China as Nepal’s No 1 trading partner. The cultural affinity and close people-to-people contacts are cornerstones of their bilateral relationship. However, if Nepal and China enhance their connectivity, China can definitely take away a major chunk of the share from India.

With both Nepal and India having a strong governments, major economic and trade activities should be initiated to get mutual benefits. India and the US are natural allies in South Asia. However, when it comes to Nepal, India does not feel comfortable if the US tries to get too close to Nepal as it does not want its pre-eminent role to be encroached upon by anyone.

The Indian side tried to play down Xi’s visit to Nepal, but in fact their anxiety was palpable. If India wants to keep on maintaining its goodwill and influence in Nepal, it must take advantage of the cultural and religious affinity between the two states.

US seeks a role

Traditionally, Nepal has been the subject of geopolitical interest not only for its immediate neighbors but also for the American superpower. The most interesting scenario for the US is that Nepal lies between two big and powerful countries that have completely different forms of governance and ideology. As the Communists usurped power in China and later annexed Tibet toward the middle of the 20th century, the US became pretty much convinced that it would have to keep an eye on China by swaying Nepal to its side. In contrast, Nepal fully embraced the “one-China” policy and was careful not to do anything against Chinese interests. Therefore, it will always be in the interests of the US to keep Nepal in good faith.

The US has identified Nepal as an ally in its IPS and has been courting Nepali leaders to toe its line. The Nepalese and US governments have signed an agreement under the Millennium Challenge Corporation (MCC) through which Nepal will receive aid of $500 million mostly for the development of the energy and infrastructure sectors. The Nepalese government has not taken the Indo-Pacific Strategy in a very positive light, as its leaders have expressed views that IPS is designed for the containment of China. The US sensitivity on the matter was emphasized when its ambassador to Nepal released a video just before Xi’s visit clarifying that the IPS was not about building military alliances.

Given the long-standing cordial ties of friendship and cooperation, Nepal will keep on engaging with the US without harming the interests of either China or India.

Geopolitics is there to stay

In international relations, every state pursues its national interests first. Nepal will continue to attract interest from India, China and the US. Each state is trying to influence Nepal through signature policies and initiatives.

Being a small state sandwiched between two giant neighbors, Nepal’s foreign-policy options are limited. It is up to Nepal how deftly it can deal with these powers to secure its own national interests and tread a path of economic prosperity. Therefore, apart from the policy of non-alignment, it should adopt a policy of engagement with all and entanglement with none.

In Nepal’s case, it can safely be said that while the Himalayas will no longer be geographical barriers in the days ahead, geopolitics is there to stay.

Gaurab Shumsher Thapa

Gaurab Shumsher Thapa is an analyst and writer on topics related to international relations. He is the president and managing director of the Nepal Forum of International Relations Studies (NEPAL FIRST).

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