The Pulse | Diplomacy | South Asia

Amid China-US Rivalry, India Maintains Low Profile in Nepal 

With Xi Jinping expected to visit Nepal soon, Kathmandu is caught between the BRI and the United States’ Indo-Pacific strategy.

By Kamal Dev Bhattarai for
Amid China-US Rivalry, India Maintains Low Profile in Nepal 

Visiting Chinese Foreign Minister Wang Yi, left, poses with with Nepalese Prime Minister Khadga Prasad Oli during their meeting at prime minister’s residence in Kathmandu, Nepal, Monday, Sept. 9, 2019.

Credit: AP Photo/Bikram Rai

KATHMANDU, Nepal — Amid growing rivalry between China and the United States to increase their influence in Nepal, India — which claims the area as an a traditional sphere of influence — has maintained a low profile.  

Over the last year, Kathmandu has felt the heat of growing China-U.S. rivalry as encapsulated in their two contrasting visions: China’s Belt and Road Initiative (BRI) and the United States’ Indo-Pacific strategy. As Beijing and Washington come out in the open with their interests, New Delhi — which desires to minimize the influence of China and the United States in its backyard — has maintained a conspicuous public silence in the past year.

After the formation of the government led by Nepal Communist Party (NCP) Chair KP Sharma Oli, both the United States and China have been vocal about their interests and how they view Nepal’s place in their differing visions. Nepal, considerably smaller in all respects than either state, has struggled to strike a balance between the competing regional visions.

In June, the U.S Department of Defense published the Indo-Pacific Strategy Report (IPSR) 2019. In its wake, Nepali leaders have viewed it, in part, as an attempt to pull Nepal into a quasi military alliance. Regarding Nepal, the IPSR says: “Within South Asia, we are working to operationalize our Major Defense Partnership with India, while pursuing emerging partnerships with Sri Lanka, the Maldives, Bangladesh, and Nepal. The United States seeks to expand our defense relationship with Nepal, focused on HA/DR, peacekeeping operations, defense professionalization, ground force capacity and counter-terrorism.”

Nepali government ministers and officials, in response, say that Nepal would not join in any military alliances targeted at China. Meanwhile, China is expanding its own political, military and economic footprint and has urged Nepal not to join the United States in its Indo-Pacific ambitions, claiming that the strategy seeks to contain China. There is also a perception in Kathmandu that the U.S. strategy is a counterstrategy to China’s Belt and Road Initiative (BRI). A section of politicians view BRI purely as an economic project and the U.S. Indo-Pacific strategy as a military strategy. Despite differences between India and the United States in other areas, they are on the same page with regard to minimizing China’s burgeoning clout in South Asia.

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With growing perceptions in Kathmandu that the Indo-Pacific strategy is targeted at China, therefore Nepal should not support it; the U.S. Embassy in Kathmandu is conveying the message that the U.S. strategy is not targeted at any particular country. A tweet from the U.S embassy on September 18 read, “The Indo-Pacific Strategy is what we do to help ensure the int’l system, & the Indo-Pacific region specifically, remains governed by the rule of law, openness, freedom & security; a place where small countries do not have to fear being invaded or pushed around by big countries!”

Chinese Foreign Minister Wang Yi visited Nepal from September 8-10 to make preparations for Chinese President Xi Jinping’s rumored upcoming visit. Given statements issued after Wang’s meetings with the prime minister, ministers and senior leaders of both the ruling and opposition parties, it’s clear the U.S. strategy was discussed. For example, part of a statement issued by the Chinese Foreign Ministry after Wang’s meeting Oli says: “The Nepali side is opposed to any attempt to contain or thwart China’s development.” This language is also inserted in other statements as well and is indicative of China’s stated concerns that U.S. strategy seeks to contain China.

Another statement issued by the Chinese Ministry of Foreign Affairs after Wang’s meeting with co-chair of the Nepal Communist Party Pushpa Kamal Dahal forthrightly states that the two sides discussed the U.S. strategy. The statement says, “Nepal firmly adheres to the policy of non-alignment, disagrees with the so-called Indo-Pacific strategy, and opposes any attempt to contain or thwart China’s development. Nepal has always believed that China’s development is an opportunity for Nepal, and is willing to learn China’s successful experience.”

This prompted the U.S. Embassy in Kathmandu to seek clarification from Ministry of Foreign Affairs of Nepal. The U.S. Embassy said that it was unfortunate that they learned Nepal’s position on the U.S. strategy from a statement issued in Beijing. In a press conference on September 6, government spokesperson Gokul Banskota said there has not been a deviation on Nepal’s policy on the Indo-Pacific. However, Nepal has not quite made its position on the U.S. strategy explicit, it simply states that it would not join any military alliance and it sticks to a non-alignment policy.

This is not a first time that a clash between China and the United States has surfaced in Kathmandu. In February this year, U.S. Deputy Assistant Secretary of Defense for South and Southeast Asia Joe Felter said that Chinese investment should serve the interest of Nepal and not just China. This comment made China furious. The next day, Chinese Ambassador in Kathmandu Hou Yanqi criticized Felter’s statement. The Chinese side called Felter’s comments “irresponsible” and accused the U.S. of seeking to harm Nepal-China relations.

Regarding China’s BRI, the United States has urged Nepal to consider the transparency and sustainability of Chinese investments in Nepal. Similarly, the United States has cautioned Nepal about falling into a Chinese debt trap. U.S. officials in Kathmandu frequently stated that U.S. assistance does not come in the form of loan, but as grants. With a growing Chinese footprint in Nepal, which advanced clearly after the 2015 Indian blockade, it seems that the United States seeks to curb Chinese influence in Nepal’s political, economic and military sphere.

There has been a series of visits from high-level Chinese officials and politicians to Nepal to pave the way for a visit by Chinese President Xi Jinping.

No Chinese leader has visited Nepal since Jiang Zemin in 1996. Xi has visited other South Asian countries, including Pakistan, Bangladesh, the Maldives and Sri Lanka, but Nepal has been skipped. According to Nepali officials, Xi is expected to visit in the next few months, possibly in October. With his visit, officials say, there could be progress on China’s BRI in the country. Though it has been more than two years since Nepal signed on to the BRI, Nepal has not selected specific projects under the initiative. Nepal, therefore, will be under pressure to sign on some projects under the BRI heading during Xi’s visit. 

Ahead of Xi’s visit to Kathmandu, the Communist Party of China (CPC) has started to work with the leaders and cadres of Nepal’s ruling party, theNepal Communist Party (NCP), which is ideologically close with China. A 40-member CPC team arrived in Kathmandu on September 23 in order to participate in a joint session of the NCP and CPC. 

Kathmandu is struggling to carve out its own clear policy, squeezed between China’s BRI and the United States’ Indo-Pacfiic strategy. India’s silence is notable amid the rumblings from China and the United States.

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Kamal Dev Bhattarai is Kathmandu-based journalist who writes on Nepal’s foreign policy.