By P.K.Balachandran/Daily Mirror
Among China’s policies which the Nepalese find congenial are: non-interference in internal affairs; disbursement of large amounts of money for desperately needed infrastructural development; funding of studies in Chinese universities; aid for the preservation of ancient Buddhist sites; and teaching of the Chinese language, which the Nepalese see as an avenue of mobility in the emerging world order.
While non-interference in internal affairs of Nepal provides a solid foundation for Nepal-China relationship, massive economic and technical aid, coupled with efficiency and perfection in the execution of projects gives life to the relationship.
A Global Times report dated August 1, 2018, quoting Nepal’s Department of Industry (DOI), said that Nepal had received a total of US$ 505 million in Foreign Direct Investment (FDI) between 2017 and mid-July 2018, with Chinese investment accounting for 84% of the total, or US$ 427 million. India came second with a pledge of US$ 46 million, followed by the US with US$9 million. According to the DOI, China had topped the chart in committing FDI in 2016-17 and 2015-16 also.
The highest Chinese FDI pledge went to energy-based industries, with mineral, manufacturing and forest-based industries coming second, third and fourth respectively. Chinese investment in Nepal has grown in the areas of hydropower, agriculture and tourism also.
China will be the largest represented country in the Nepal Investment Summit to be held in Kathmandu on March 29-30, 2019. According to the Investment Board Nepal (IBN), a total of 620 investors from 38 countries have confirmed their participation in the event. Of them, 250 are Chinese participants. After China, comes India (110), Nepal (49), Myanmar (28) and Japan (20).
During the last investment summit in March 2017, Nepal had received the largest investment pledges had come from Chinese companies. Of the total pledged investment of US$ 13.52 billion, US$ 8.2 billion came from Chinese investors, representing 61 percent of total investment pledges made there.The President of the Beijing-based Asian Infrastructure Investment Bank (AIIB) announced at the summit that Nepal would receive loans from the AIIB starting in 2018.
Currently, 108 Chinese companies have invested in sectors like energy, services, tourism, agriculture, manufacturing, and mining. Two larger hydropower schemes, one international airport, two special economic zones, and a cross-border transmission line are among major areas of Chinese investment. It is estimated that these projects have collectively generated 32,932 jobs.
Chinese investment in Nepal has been growing. Nepal received an FDI pledge of US$ 57 million in 2015-16; US$ 76 million in fiscal 2016-17; and US$ 427 million in fiscal 2017-18, according to Nepal’s Department of Industries.
Since the visit of Prime Minister K.P. Oli’s to Beijing in March 2016, China and Nepal have accelerated cooperation under the framework of Xi Jinping’s Belt and Road Initiative (BRI) and have strengthened interconnection through trade, transportation, and telecommunications.
Significant progress has been achieved in the construction of key projects like the highway bridge over Karnali River at Hilsa; the Kathmandu Ring Road reconstruction project; and construction of three economic corridors, namely the Koshi Economic Corridor, Gandaki Economic Corridor, and Karnali Economic Corridor, among others.
China and Nepal have also signed a transit agreement under which both sides have agreed to increase the number of bilateral international road freight transport lines from the existing three to 12. It is reported that the new road and rail transportation services connecting Guangdong, Tibet, and Nepal have been officially opened and goods are being transported to and from China along this route.
The Northern rail line connecting Nepal and China is expected to cost U$ 2.6 billion, and the East-West line is to cost around US$ 7 billion. The Northern Lhasa-Kathmandu railway and the East-West railway will contribute a lot to Nepal’s tourism industry. As on date, the Chinese are the second largest group of tourists in Nepal. They could flood the area if these rail lines come up.
Nepal-China trade has also been growing fast since 2015-2016. Of the U$10 billion of the present trade volume, Nepal’s trade with China is currently 14%, with imports from China galloping at the rate of 39% per year.
Sino-Nepalese Military Ties
In December 2008, China gave military aid to Nepal worth US$ 2.6 million. During Chinese Army Chief Gen.Chen Bingde’s visit to Nepal in 2011, China announced military aid to the tune of US$ 7.7 million. In March 2017, the Chinese Defense Minister and State Councilor, Gen. Chang Wanquan, visited Kathmandu to offer a grant US$ 32.3 million to the Nepalese Army to strengthen its capacity to deal with natural calamities and providing it equipment for the UN peacekeeping missions.
Use of Soft Power
China is using soft power in a big way in Nepal in line with President Hu Jintao’ 2006 statement that China’s international status and influence needs to be “demonstrated in hard power such as the economy, science and technology, and defense, as well as in soft power such as culture.”
Chinese Confucianism and the Chinese language are being taught in Nepal in a big way. Beijing has set up Confucius Institutes and China Study Centers. The Confucius Institute at Kathmandu University has established four Confucius Classrooms and 14 teaching sites, cultivating more than 20 thousand students in all. Over a hundred Nepalese schools offer free Chinese language courses.
Scholarships are given to Nepalese students to pursue courses in Chinese universities, where apparently they are treated well. XinhuaNet states that as of 2016, 5,160 Nepali students had studied in Chinese universities through scholarships “supported” by the Chinese government.
At the fourth gathering of Nepalese alumni in Kathmandu in November 2017, Chinese Ambassador Yu Hong noted that after finishing their studies in China, the Nepalese students were promoting the China-Nepal relations. Online dating has resulted in many Nepalese men marrying Chinese.
In 2011, China entered into an agreement with Nepal to modernize Lumbini, where the Buddha was born. The US$ 3 billion Lumbini project was a substantial part of Nepal’s GDP was $35bn. The organization behind the project was the Asia Pacific Exchange and Cooperation Foundation (APECF), a quasi-governmental organization in China. China’s aim is to make Lumbini attract tourists from all parts of Asia and bring together various schools of Buddhism
China is cultivating the Sherpa community in Nepal which is Buddhist. Many Nepalese are given permits to go to Tibet and purchase modern goods which are cheap and available in plenty there thanks to Chinese rule.
China has not ignored the Hindus either, as the Hindus are the majority in Nepal. Beijing facilitates pilgrimages to the Hindu holy places of Mt.Kailash and the Manasarovar Lake in Tibet.
(The featured image at the top shows a Nepalese truck about to enter Tibet using a road built by the Chinese)
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