Nepal’s ‘balancing act’ continues as deputy prime minister heads for economic talks in Beijing

Trip comes two weeks after Nepalese leader visited New Delhi as nation seeks to keep its giant neighbours on side

PUBLISHED : Wednesday, 06 September, 2017, 7:33pm
UPDATED : Tuesday, 10 October, 2017, 1:03pm

Nepal’s deputy prime minister is set to arrive in Beijing on Wednesday evening for a six-day official visit, two weeks after the Nepalese prime minister visited New Delhi.

The visits show the South Asian country is keen to boost economic ties with India and China while also trying to maintain a position of neutrality in disputes between its two giant neighbours.

The visit to Beijing by Krishna Bahadur Mahara, who also serves as foreign minister, follows an official visit to Nepal by Chinese vice-premier Wang Yang last month, during which the two sides signed various deals on energy projects and China pledged a US$1 million humanitarian aid package.

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Mahara told Xinhua that the meeting would help to strengthen bilateral economic cooperation through projects under China’s “Belt and Road Initiative”.

“We are hoping that the practical cooperation under the initiative will help to improve our economy in the long-term,” he was quoted as saying.

Pramod Jaiswal, a visiting research fellow at the Institute of Peace and Conflict Studies, a think tank based in New Delhi, said the talks would likely focus on China-led construction and connectivity projects in Nepal.

“[Beijing] has been very active in Nepal, very assertive in Nepal with these projects,” he said by phone from Kathmandu, the Nepalese capital.

China is not the only large country looking to boost its influence in Nepal, Jaiswal said, adding that both India and the United States have also announced connectivity projects there.

Chinese foreign ministry spokesperson Geng Shuang said on Monday that Mahara’s visit would “deepen the practical cooperation between China and Nepal in the framework of the ‘Belt and Road’”.

Nepal has had to perform a delicate balancing in recent months after its neighbours China and India became embroiled in a bristling stand-off in the Doklam plateau that lasted for 73 days.

While Beijing has sought to reduce Nepal’s dependence on India, Jaiswal said it would be “almost impossible” for China to match Nepal’s historical alliance with India, as the two nations shared deep cultural ties and an open border.

“Nepal will have to strike a balance between the two,” he said. “But Nepal has always been and will always be a traditional ally of India’s ... China can never replace that.”

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Rupak Sapkota, a researcher at the Nepal Institute for Strategic Analyses, said Mahara would be keen to stress Nepal’s neutrality, while also seeking to finalise Chinese investments in a south-to-north highway and a cross-border railway network.

“[Mahara] will try to make it clear that Nepal wants good relations with both China and India, and take neither side,” he said. “That will be our fundamental policy to deal with our neighbouring countries, so that we can have economic diplomacy with China and India.”

However, Sapkota said that just as neutrality was a “quite effective” policy for Nepal on the border dispute, it would need to navigate both Asian giants to retain its economic relationships.

“India worries about Nepal-China ties,” he said. “But we need investments from both China and India.”

According to figures from Nepal’s Department of Industry, China’s investment in Nepal in the 2016-17 financial year was about US$81.4 million, or more than four times the US$19.4 million India invested in its neighbour.

Economic ties between China and Nepal have become “more pragmatic”, he added, as China made several investments in the country after it was hit by a magnitude 7.8 earthquake in April 2015.

Mahara’s visit would also lay the groundwork for an October visit to China by Nepalese Prime Minister Sher Bahadur Deuba, who visited India last month, said Sundar Bhattarai, the acting chairman of the Nepal-based China Study Centre.

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Deuba was understood to have been given “a warning” from New Delhi during his five-day visit, which took place while the border stand-off between China and India was still ongoing, Bhattarai said.

“There is [a] likelihood that India will not hesitate to demonstrate even in the most unpleasant [terms] any time in [the] future ... who is the real boss of Asia or South Asia,” he said.

Selina Ho, a Sino-Indian relations scholar at the National University of Singapore, said a lot of South Asian countries, like Nepal, have to “do a balancing act” when dealing with larger nations.

India remained wary of China’s presence in the South Asia region, particularly with its “very aggressive” moves under the “Belt and Road Initiative”, she said.

“The visit [to Beijing] is going to be watched very closely by the Indians,” she said. “There is a diplomatic race between China and India in Nepal. This is something that has been going on for a long time.”