Nepal needs the benefits of a closer relationship with China

Kishan Datta Bhatta says Nepal’s participation in the ‘Belt and Road Initiative’ can be a game changer for its development, with its promise of improved rail and road links, increased access to markets, better jobs and more tourists

PUBLISHED : Wednesday, 28 February, 2018, 4:07pm
UPDATED : Wednesday, 28 February, 2018, 7:20pm

Sharing a common 1,415km border, Nepal and China have a long history of political and economic relations. Today, China’s “Belt and Road Initiative” will become a significant factor in taking ties to new heights.

Bilateral trade, economic cooperation and support from China has increased threefold from 2010 to 2016. The growth rate in Nepal’s commerce with China has outpaced that with India, Nepal’s largest trading partner. China is ranked second with regard to tourist arrivals in Nepal. With the increase in trade and commerce, there has been a growing need for improved connectivity and cross-border infrastructure development with China. As a transit route for China into South Asia, Nepal could reap the benefits from the development.

With its strong commitment to participate in the belt and road plan, Nepal became a founding member of the China-led Asian Infrastructure Investment Bank that started operations in January 2016, and signed a memorandum of understanding on belt and road cooperation with China in May 2017. With the formation of a new government in Nepal, its infrastructure development should be re-examined in light of the belt and road.

Driven by India into China’s arms, is Nepal the new Sri Lanka?

Nepal should work with China in four key sectors.

The first is transport infrastructure. Efficient rail and road links would improve access and mobility at a time of thriving bilateral trade, economic activities and tourism, and China has proven to be a leader in railway technology. With better transport links, more Nepalese products would get better access to international markets, boosting local employment and entrepreneurial activities. It would also bring cross-border communities closer.

Chinese tourists are flooding into Nepal, and the floodgates haven’t even opened

Next is hydropower and alternative energy. Chinese technology in hydropower engineering is world class and Nepal should ask China to invest in its hydropower projects, in addition to solar and wind energy projects.

Third, Nepal could benefit from Chinese technology in the information and communications technology sector, including the internet and software development.

Finally, China is one of the leading countries in the development of cutting-edge technology, innovation, research and academic institutions. Nepal could collaborate with China to develop world-class academic institutions, specifically in technical and medical education. These projects would enhance cooperation and the sharing of knowledge.

While opportunities abound, the implementation of the belt and road projects will be challenging.

As Nepal has experienced in the past, many large-scale projects are not executed properly even though they have been years in the planning. Political divides often obstruct the projects; it’s hard even to find a consensus among the political parties to start them. The stability of the government has been a concern.

Further, Nepal does not have the financial management skills and technical expertise to handle mega projects.

Another potential stumbling block is Nepal’s relations with its intimate neighbour, India, a growing global power and rival of China. India’s views of the belt and road projects could have considerable impact on whether they succeed.

Last, but not least, the prioritisation and implementation of the projects must be guided by the interests of Nepal and China. Bilateral agreement on an effective management model and funding mechanism is necessary. In fact, these projects should be managed as national projects, under the direct supervision of Nepal’s central government. Mutual dialogue and understanding is crucial to solve the problems that may arise.

Dr Kishan Datta Bhatta is dean and associate professor in the Faculty of Engineering at Far-Western University, Nepal