Like Pakistan, Nepal in the recent years has tilted towards China, especially for economic, rather than military or strategic reasons. Nepal, the landlocked country which is surrounded by China to its north and India to its south, depends on neighbors for its prosperity. For Nepal, diversifying the sources of key supplies is very important for the successful conduct of its policies. Nepal is trying to find a way to ensure manageable risk in terms of resources it gets from other countries.
Pressure from New Delhi
Constantly tormented by the necessity of pursuing a neutral policy to effectively balancing between its immediate neighbors China and India, Nepal has been striving to figure out how it is related at multiple levels to both the countries.
Both China and Indian exert tremendous influence on Nepal to toe their respective line. However, Kathmandu is keen to be a preferred partner of Beijing. While China is a UN veto power and world economic power, India is an emerging economy with its own limitations.
However, Hinduism playing a mediating factor between India and Nepal. India has extensive political and economic influence over Nepal and thus far it provides much of Nepal's supplies. In 2015, India withheld supplies, especially fuel, to Nepal after the devastating earthquake. India, however, maintained that the supply shortages have been imposed impose by Madheshi protesters within Nepal. Here Beijing stepped in and supplied fuel along the mountainous routes.
Rise of Communism
An alliance of Left parties formed a new government in Nepal after its landslide victory in December last year. The Left parties' alliance has an ideological affinity with communist China. This is seen as a triumph of China over India regarding influence in Kathmandu. Nepalese Communist leader KP Sharma Oli, who is known as pro-China, became the Prime Minister. Pushpa Kamal Dahal (Prachanda as he is popularly known as), the chairman of the Communist Party of Nepal (Maoist-Centre), has a personal rapport with the top officials of Communist Party of China.
Leaders of the coalition in Kathmandu say the new government will launch five or six mega projects. These include revisiting the Chinese company-funded Buddha Gandaki dam project, which was cancelled on the eve of the election. All these aim at spurring infrastructure and creating job.
After the elections, Oli visited a border point with Tibet where a trans-Himalayan railway project is under the review. This indicates future collaboration with China. Oli has pledged to bring in Chinese investment for key infrastructure projects and announced to return a $2.5 billion hydropower project to China's Gezhouba Group, after the current government scrapped the deal citing contract "irregularities".
While the communist ideology of China seems to be close to Nepalese political and intellectual classes, India under the BJP government tries to use Hindu religion to exert influence on the Nepalese mindset. Nepal's newly elected Left Alliance is not only doing Beijing's bidding, but also seeks to balance relations between China and India in a bid to promote economic growth and political stability in the country.
The sweeping victory of the CPN-UML and Maoist Party alliance in the recently held Nepal general election has raised alarm bells. The primary concern in the international press seems to be that a communist government will allow China a greater role in a region India sees as its backyard.
Earlier, the centrist Nepali Congress-led government played a role in slowing Beijing's economic advances in Nepal. Not one project has yet been pursued under the "Belt and Road Initiative" eight months since a framework agreement was made. Breaking with the tradition of visiting India first upon taking office, Prachanda had chosen China as his first port of call in August 2008. Oli signed a slew of deals, including on transport and transit, when he arrived in Beijing as Nepal's leader in March 2016. These treaties not only ended Nepal's sole dependency on India for trade but also diversified the Nepalese market for petroleum imports, crucial for the landlocked nation that has faced three economic blockades by India.
Once considered close to New Delhi, Oli became vocal against India when it pressured Nepal over its Constitution in September 2015, then imposed a five-month blockade, and tried to bar Oli from becoming prime minister. However, Oli, is not against seeking Indian investment for development. No government in Nepal can ignore one neighbour at the cost of another. Nor can it afford sole dependency on either.
With China surpassing India on the list of Nepal's largest donors and investors, India's unease has deepened. The problem is India still sees Nepal as its "backyard"; it welcomes Chinese investment but expresses deep suspicions when it comes to its neighborhood.
There is speculation, mostly from Indian sources, that China has been pulling the levers behind the scenes to help the two major Left parties come together. Western media have repeated the claim, with the alliance depicted as a pro-China force and Chinese activities held responsible for India's diminishing influence in Nepal.
If India's traditional dominance in Nepal has waned, it is more because of its reckless diplomacy. After India imposed an effective blockade against Nepal in 2015-16 for refusing to write a Constitution on its terms, Nepal was cut off from fuel and essential supplies for more than five months. Nepal has since looked north for development and diplomatic balance and China readily obliged its red neighbor.
India may not accept developments in Nepal as the aspirations of a landlocked, sovereign neighbour to diversify its trade, transport and transit dependencies. India's clout would not count greatly if it continues to try to reverse the logical trend but on the contrary would only help steer China's speedy footprints in Nepal.
But India must honour its earlier infrastructure commitments to Nepal, while admitting that China is a reality, not a choice, for Kathmandu.
Why Nepal cozying up to China
It is mainly geographic logic that geared Nepal towards the south. Economic and geopolitical factors also prompt Nepal to engage with China. There is now a consensus across the political spectrum of Nepal on the need to end its exclusive southern orientation and develop better trade and transport links with China.
Study of China and its language are becoming popular in Nepal. The students of Nepal are also taught about contemporary China, including the government's claim that it is the home of the "four great new inventions", including shared bicycles and high-speed railways. The number of Chinese tourists travelling to Nepal is also swelling, rising 20 per cent in 2016 to 104,000, according to the figures from the Nepal Tourism Board. The sharp rise in Chinese tourists has coincided with an increase in the number of Chinese businesses in Kathmandu, including hotels and restaurants in the so-called Chinatown in Thamel district.
Since the opening of 2015, Nepal has organised dozens of events promoting Chinese culture. While China's cultural clout in Nepal lags far behind that of India – with which Nepal shares a 1,700km open border – opportunities for Beijing to shift that balance were given a huge boost as Nepal's Communist alliance secured a landslide election victory.
The Left alliance's victory in Nepal is a good news for China, given Nepal's strategic location as a buffer with India and its proximity to Tibet, an autonomous region of China with lingering tensions over its sovereignty.
Nepal's communists have been adherents of the market economy since the establishment of democracy in 1990 and many leaders have close relationships with India. Most domestic forces have sought help from India and China to gain political leverage and both the countries have attempted to influence political processes. Their involvement is as effective as local dynamics allow. No country wields absolute power over politics in Nepal.
China is Nepal's largest foreign investor. In the past financial year alone, China has invested 8.36 billion Nepalese rupees ($81.89 million) in the country, an increase of almost 35 per cent from the year before, according to Nepal's Department of Industry.
More than $80 million of investment are helping Beijing to win hearts and minds in its tiny, but perfectly placed neighbour Nepal. Much to the annoyance of New Delhi, Beijing has poured huge sums of money into infrastructure projects in Nepal under its trade and infrastructure development plan known as the "Belt and Road Initiative".
The impact of Chinese investment in Nepal is visible in its roads and motorways, hydroelectric projects and railways, as well as the rebuilding projects launched after the devastating earthquake of 2015 that left more than 9,000 people dead. At the entrance to a project – partly funded by Beijing – to restore a tower in front of the Old royal palace in Durbar Square are the flags of both Nepal and China.
"China has been making strenuous efforts to increase trade with Nepal. At present, China-Nepal relations are developing at the fastest pace we have seen," said Yu Hong, Chinese ambassador to Nepal. Nepal's proximity with China, which is expected to deepen under its new Leftist government, is just a sovereign nation's wish to secure its interests and India should accept it as such.
In fact, the regional superpower China helps Nepal overcome its overdependence on India by providing those resources that used to come from India to the former kingdom of Himalayas. Nepal ended its long dependency on India for internet access recently by opening a fibre optic link to China. Nepal's Information Minister Mohan Bahadur Basnet inaugurated the link across the Himalayas at a ceremony in Kathmandu. Previously, all internet connections in the landlocked country used to come via three access points – Bhairahawa, Biratnagar and Birgunj in southern Nepal – from India.
The new internet line, provided by China Telecom Global, extends from Kathmandu to the border point Rasuwagadhi into the Tibet region. It comes after a coalition of two communist parties that are considered pro-China won Nepal's election last month. The Nepal line is connected via Hong Kong bandwidth, which is not restricted by the infamous "Great Firewall". The link was scheduled to be up and running by the middle of last year but it was delayed due to the difficulties of working at high altitudes above 4,000 metres.
Work on a communication link to China was finished in December 2014, but it was completely destroyed in a devastating earthquake in April 2015. A land transport route through the Tatopani border point to China is still closed.
Even as Chinese influence can be seen across Nepal, Beijing still has a long way to go, especially in the area of people-to-people relations. Cultural relations and people-to-people relations are the vehicles for strengthening bilateral relations.
The visible presence of China and the influx of Chinese money in Nepal is definitely a concern for India, which regards China as a strategic competitor. There are also perennial concerns over China's soft power diplomacy and its effect on Nepal's sovereignty.
Any country would like to have full and complete sovereignty and freedom to decide its course without any pressure or force from any other big nation. Nepal feels for its ambiguity and inability in this regard.
Nepal had a long history of trade and cultural connection with China which was broken after British incursion. What the India sees as Nepal being breaking away from its fold, but Nepal sees it as a much-needed rebalancing act.
Nepalis strongly desire to break free from the shackles of political and economic domination from both India and China. They have seen Asian countries transform themselves in a matter of decades and are eager for similar change. They have seen the rise of China and how the Chinese have lifted millions out of poverty. They have seen in their own country how almost 70 years of Western development aid has done little in comparison.
There is a great disillusionment against what is widely perceived as the proclivity of the Indians and Westerners to get mired in domestic politics and social engineering. Nepal is not a "security instrument" to contain China. It is easy to see why the Chinese model, with its strictly economic terms of engagement, is preferable to Nepal despite concerns about "debt entrapment".
Anyone in Chinese neighbourhood is aware of the gravity of China's pull and the amount of influence it could potentially wield. But many in Nepal appear unconcerned, focusing instead on China's massive economic development and the spill over benefits it could have for their country. Ten years down the road, Nepal's economy will be largely benefited because of the Chinese economy.
Obviously, Nepal will benefit from the growing Chinese economy.