DMP Thapa's visit could help redefine Sino-Nepal relations, with the ultimate goal of making Nepal a South Asian Bridge
There is good news emanating at this point from Nepal's southern neighbor that the 'stand-off' at the Nepal-India border is likely to end soon, just one day before Deputy Prime Minister and Foreign Affairs Minister Kamal Thapa is scheduled to begin his six-day diplomatic visit to our northern neighbor, the People's Republic of China, starting December 24th. Notably, this is the first high level visit from Nepal to China since KP Oli was elected the prime minister of Nepal on October 11th. During his visit DPM Thapa is expected to be a guest of honor at a ceremony commemorating the 60th year of Nepal-China diplomatic relations.
After the devastating earthquake of the April 25th, China had extended spontaneous support to Nepal. However, still recovering from the deadly earthquake, Nepalis have had to withstand not only thousands of aftershocks but also serious domestic shocks (such as the Madhesh agitation against the new constitution) as well as potent external shocks (such as the undeclared economic blockade imposed by India). The cumulative effect is a humanitarian crisis that has pushed Nepal closer to the status of the poorest country in South Asia. There has been growing public pressure for the resolution of Madhesh crisis, for immediate launch of post-earthquake reconstruction phase and for resumption of essential supplies by ending the three-month-long stalemate between Kathmandu and New Delhi. In this milieu, DPM Thapa is visiting China. Prior to this, he had visited New Delhi, twice, Geneva once (to address the Council of Human Rights) and the United Kingdom. We are yet to see any long-term effects of these visits. But his China visit is nonetheless crucial. During the visit, his areas of focus should be: enhancing roads to Tibet, cultural and economic connectivity, infrastructure development, energy, tourism, smoothening trade and transit, regular fuel supply and trade diversification.
Nepal's economy must recover from the latest shocks in order to contain the growing desperation and disenchantment of Nepali people. This can be done with the help of China, which has been expanding at nearly 7 percent annually since 1990 and currently contributes to around 30 percent of global economic growth. Today, China has a huge trade surplus with Nepal and other South Asian countries. This surplus can be ploughed back as foreign direct investment. Already, 1,001 Chinese companies/firms have been granted permission by Nepal to invest more than US $8.3 billion here. This is bigger than India's investment in Nepal.
Despite this, neither do Nepal and China have a trade and transit treaty nor do they have a Bilateral Investment Promotion and Protection Agreement (BIPPA). If we can have these treaties with China, there can be an exponential growth in our FDI inflow due to our abundant natural resources and cheap labor. Presently, China is already engaged in development of dozens of mega projects in Nepal, including Gautam Budhha International Airport in Bhairahawa and West Seti Hydro-electricity Project. The DPM's China visit would be timely for discussion on new infrastructure development projects as well, in the context of Nepal's sluggish growth (an anemic three percent annually). The government, appreciably, is already planning to seek Chinese assistance to build the Trans Himalaya (Rasuwagadhi-Galchi) and Koshi Corridor (Kimathanka-Biratnagar) highways to promote trade and transit between the two countries.
Nepal should also request China to extend its optical fiber network into Nepal and seek its assistance in construction of cross-border high voltage power transmission line, for both import and export of electricity. Also, feasibility studies on operation of goods ropeway and construction of a gas pipeline from Kyerung, Tibet to Kathmandu need to be in high on DPM Thapa's priority list. To enhance road connectivity and to offset any possible transit obstruction, Nepal needs to develop alternative accesses to the sea via China in addition to securing Indian sea ports. Hopefully, preparations are underway to sign a Trade and Transit Treaty with China so that Nepal may use its sea ports for trade with third countries, so that an avenue is opened for Chinese involvement in exploration of crude oil and production of energy in Nepal. Such a treaty will also enable commercial purchase of petroleum products from China. When the Chinese railway line that has already been extended to Shigatse comes to Kyerung by 2020, it will greatly ease bilateral trade as well as help with expansion of regional connectivity with India and other countries in South Asia. On the other hand, Nepalis question how can a country that proposed the 'One Road One Belt' program for connectivity of 60 countries of Asia and Europe disregard the territorial rights of its immediate neighbor, as it did over Lipulekh? It is high time China demonstrated its magnanimity and allowed Nepal its rightful stake in the benefits accruing from the commercial use of Lipulekh by China and India. This could be a landmark for consolidating China-Nepal-India tripartite relations.
Both Nepal and China are fully committed to the Panchasheel (the five principles of peaceful co-existence) and the UN Charter and have been working together in regional and international levels to consolidate their bilateral relations. Now the process of formation of a "Nepal-India-China Tri-lateral Dialogue Mechanism" is already underway in all three countries. This will help the three countries benefit from each other's prosperity. It will also help the three resolve issues related to national security and territorial integrity. So DMP Thapa's visit could be a ground-breaking event in redefining the Sino-Nepal relations with the ultimate goal of making Nepal a South Asian Bridge (SAB). Nepal must also strive to benefit from Chinese President Xi Jinpeng's "Neighbor priority policy" and Prime Minister Narendra Modi's "Neighborhood first policy."The people of Nepal have a lot of hope from DMP Thapa's China visit. Hopefully, it will set the tone for President Li Xipeng's state visit to Nepal and Prime Minister KP Oli's state visit to China. In the end, we all hope that the visit will pave the way for greater engagement between the two countries for the mutual benefit of the two peoples.
The author is a political economist, RPP-Nepal Central Committee Member and Member Secretary of its Department of International Relations