Prime minister K P Oli during his last meeting with Chinese president Xi Jinping in 2016

Within two months of assuming office to lead the most powerful government in Nepal’s democratic history, Prime Minister K P Oli has visited India, and is now in China. 

The last time Oli was in China in early 2016, Nepal was just coming out of the ruinous Indian Blockade, and he was heading a coalition that would soon collapse as the Maoists suddenly switched sides.

At that time, Oli’s main agenda was to thumb his nose at India and send the message that Nepal could, if pushed into a corner, lean on China. He agreed with Chinese leaders on a trade and transit arrangement and alternate routes to the sea through Chinese sea ports as part of the Belt Road Initiative. They also talked about petroleum storage facilities along the northern border to diversify Nepal’s energy imports. The extension of the Tibet Railroad from Kerung to Kathmandu and Lumbini were broached.

Even though they were largely symbolic, the deals were designed to set alarm bells ringing in the Indian media. It worked. The New Delhi press and establishment went into predictable paroxysms over ‘Chinese inroads into Nepal’.

Back home, Oli’s flag-waving bolstered the perception that he had stood up to India, for which he was handsomely rewarded in last year’s elections. But he also learnt his lesson: never again to allow a weak coalition to be dismantled by outsiders.

And that is the other reason this visit is historic and uprecedented: the meeting between K P Oli and Xi Jinping on Wednesday was not just a handshake between Nepal and China, it was between two monolithic Communist parties that now enjoy near-unchallenged rule over their countries.

One shadow hanging over this visit is that Oli is now seen in Beijing to be a bit fickle and erratic. Back home, Oli’s nationalist lustre has been somewhat tarnished – he is seen to have bent over backwards to please an India he once portrayed as a monstrous bully.

For the past two centuries, Nepal has always walked a tight-rope, trying to balance relations with its two gigantic neighbours. Successive rulers of Nepal have tried to play India off against China, and although that worked in the 1960s, it hadn’t since – until 2016. Beijing tried to press home the advantage of strong anti-Indian feeling in the Nepali public post-Blockade on investment, trade and Tibet.

Modi’s visit to Janakpur, Kathmandu and Muktinath may have had a domestic electoral component, but it was designed to charm the Nepali public again and reset India-Nepal relations so the Chinese wouldn’t get too close.

Despite this, Beijing has not wavered from its long-term strategic blueprint to keep the disputed sections of the Himalayan Arc in deep freeze. Doklam was an unexpected flashpoint, but neither India nor China want their mutual border disputes to flare up, and both want a status quo in the buffer states of Nepal and Bhutan.

It was a message Mao gave to King Mahendra in the 1960s, and that same message was conveyed by President Xi to Oli on Wednesday: we have no problem with your relations with anyone else, and no one else should have any problems with your relations with us. The reference is obviously to India-Nepal relations. India’s biggest source of imports is China, and Beijing does not want to jeopardise its deepening trade ties with New Delhi over Nepal.

If there is just one thing Prime Minister Oli should look to accomplish during his meeting with Chinese leaders, it is to re-establish their trust. He will find that their confidence on Nepal is frayed somewhat at the moment, and it has nothing to do with the perception that he has swung over to befriend India. It is the feeling in the Beijing establishment that the Nepalis do not do their homework, they don’t implement agreements, and they go back on their word.

The flipflop over a Chinese contract to build the $2 billion Budi Gandaki high dam project, and the Oli government’s removal of the China Three Gorges Corporation from the West Seti contract have stained Nepal’s reputation as a truswothy partner in Beijing. The Chinese also feel Nepal has dragged its feet over the draft of the Trade and Transit Treaty, and not done much homework on the petroleum storage facilities.

Let’s face it, Nepal does not figure high in the scheme of things in China – neither geo-strategically nor economically. Beijing’s main worry about Nepal is not that it will go over to the Indian sphere of influence, but that it will allow Tibetan nationalist activities. It wants Nepal to be politically stable and predictable so that it can plan for trade, investment and connectivity through Tibet.

Oli went to China with a wishlist of energy and infrastructure projects, many of which were signed. But the most important thing the Chinese are looking for is stability and trust.

Also read: Nepal-India Rail Diplomacy

Oli reassures India before China visit

10 years ago this week

The front page of Nepali Times ten years ago this week (#405, 20-27 June 2008) carried the headline: Same old Nepal. And the Editorial in that issue echoed the nation’s impatience:

‘Enough is enough. If it takes two months after an election verdict to form a government and three weeks after the declaration of a republic to replace the head of state, we wonder how long it will take to agree on a cabinet. And after that, how much longer for 601 assembly members to draft a new constitution?
Every time we bring up the subject of this endless obsession with politics at the expense of development, our leaders keep telling us to be patient. Once politics falls into place, they say, everything will be sorted out. We’ve waited 15 years. Remove the feudal monarchy, we are told, and there will be a golden future. It is a blessing our transition to a republic hasn’t been messier and more brutal. But our leaders are so busy running in circles round trees, they can’t see the forest.’

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