Nepal moving closer to China through connectivity

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In fact, many Nepalis have little knowledge about Nepal’s relation with Tibet that it was easier and safe compared to travel towards south at least until the 19th century. As a sociologist, Dor Bahadur Bista mentions, until the beginning of the 19th century, Nepal shared a greater cultural affinity with and had more significant economic interest in Tibet than India. Also, there were more Nepalis in Tibet than anywhere else in South Asia. By that time, Nepalis were more privileged in Tibet. Nepalis businessmen could marry Tibetan women, and male offspring of such marriage was regarded as Nepali subjects (popularly known as Khachara) whereas a female child from such a marriage (Nepali father and Tibetan Mother) was acknowledged as a Tibetan citizen. 

The Kerung route was opened in the 17th century which provided the ground to develop a closer interaction with China, Tibet, India, and Nepal. It was Tibet, which was paying an annual tribute of NRs. 10000 to Nepal until 1953. Moreover, Nepalese were freely allowed to visit pilgrimages to the holy Mt. Kailash in Tibet. Likewise, Tibetans allowed traveling to worship Buddhist temples in Nepal.

Once Kathmandu was a prime center of trans-Himalayan communications and a meeting ground of traders of Nepal, British-India, and Tibet, people from major bordering points i.e. Kerung, Kuti were active in trade, tourism, and trekking related businesses. There were no restrictions on human movements to and from Tibet to Nepal. However, drastic paradigm shifts were observed not only on the trade but also on aspects of human mobility and other cultural relationship after occupation of Tibet by China. China raised significant concerns of security and tightened the border with Nepal.

Moreover, the deployment of an Indian military mission in Nepal China border in the 1950s and unabated migration of millions of Indian into Nepal’s Terai region, after the 1950 Indo-Nepal Treaty of Peace and Friendship increased Chinese concerns. Free human movement between Tibet and Nepal restricted and only the border inhabitants allowed enter freely up to only 30 miles of both the countries.

Thereafter, Nepal’s connection with Tibet became very limited and its relationship with India increased in tremendous level and became solo dependent on India due to its landlocked nature.               

King Mahendra fathomed the depth and long-term implications of being sole dependent with India. Realizing this fact, he was in favor to construct at least a highway between Nepal and China for the movement of people and goods through an alternative road. He did an agreement with China to construct trans-Himalayan highway between Nepal and China named Aarnko highway; it completed by China in 1960.

In addition, this Highway another trans-Himalayan highway, Rasuwagadhi – Kerung between Nepal and China opened in 2014. Both the Tatopani Customs in Arniko Highway border point and Rasuwagadhi Customs in Rasuwagadhi – Kerung highway border points are the biggest trading points between two countries.

Moreover, the overland trade between Nepal and Tibet (China)are conducted also through additional seven border points, which have a possibility developing as trade and transit routes between Nepal and China. They are, Olangchungola -Tiptala ; Kimathanka -Lengdup; Lamabagar -Lapchi; Gorkha Larke -Lajyang ; Mustang -Korala; Mugu -Nagcha; Humla -Hilsa.

In the changed context, three important developments have further deepened and widened Nepal China bonds. The first is the economic blockade of Nepal India border of 2015, the second is the One Belt One Road (OBOR) Initiative undertaken by China, and the third is China’s rise as the second most important global economic, military and political power.

The China’s One Belt One Road (OBOR) initiatives is a modern expanded version of ancient Silk Road. The OBOR agreement signed by Nepal and China have five broad areas – economic development; transport connectivity; trade connectivity (economic zone, industrial park, and dry port development); financial integration through opening branch of Chinese bank and People-to-people contact through visits and media cooperation.

During  visits of Nepali Prime Minister K.P. Sharma Oli to China in 2015 and  2018, the two countries agreed to implement the memorandum of understanding (MOU) on the BRI to enhance connectivity in key areas including ports, roads, railways, aviation and communications within the prime framework of Trans-Himalayan Multi-Dimensional Connectivity Network. China agreed to provide four sea ports and three land ports (dry ports) to Nepal.

A separate MOU was signed in 2015 between the Nepal Oil Corporation and China National United Oil Corporation (PetroChina) in Beijing to supply petroleum products to Nepal. Nepal could import 35-40 percent of its total fuel needs.

However, it would take time to operationalize as the road infrastructure in Nepal side is poor and quality, quantity, price, loading capacity, loading method, and the route to bring fuel to Nepal must be yet finalized.

The two countries are also working on developing cross-border electricity transmission lines. The State Grid Corp., one of China’s two major power grid operators, and Nepal Electricity Authority (NEA) signed a cooperation agreement on China-Nepal electricity networking feasibility study.

Nepal Telecom and China Telecom signed an agreement in December 2016 to build internet ties and on 10 January 2018, China Telecom activated  terrestrial link to Nepal.  The new fiber optic connection, which crosses the Himalayan mountain range, changes a significant aspect of Nepal’s exclusive dependency on India.

China – Nepal relations have seen the maximum growth in aviation sector. About half dozen Chinese airlines regularly fly to Nepal. Chinese tourists’ growth rate is highest in Nepal. Nepal gave permission to China to pick the 16 Himalayan districts bordering China to develop as part of poverty alleviation program.

China is investing in infrastructure projects in Nepal becoming the highest investment partner. Chinese plan to extend the Qingzang railway to Nepalese border and its construction will be completed by 2020. It will start from Shigatse in Tibet to Katmandu, Nepal’s capital city.  The construction is scheduled to begin in 2020 and is expected to be done by 2022. Due to the much-debated “debt trap,” Nepal is cautious and has asked China to fund the railway as a grant and not as a loan. China, for its part, has also learned from its international feedbacks.

It has plan to extend this railway up to Lumbini, birth place of Lord Buddha, near the border to India. Once the railroad is put into operation, a quick transfer by Tibet to Katmandu train will be possible, and it will be much safer and cheaper. This will also significantly promote tourism and support trade and transit facility to Nepal.  Nepal’s East-West Railway Network, and the Kathmandu-Pokhara-Lumbini network, will be linked to China-Nepal railway at the Rasuwagadi-Kerung border.