From UPSC perspective, the following things are important :
Prelims level : Nothing much
Mains level : India-Nepal-China triangle
President Xi Jinping flew straight from Chennai to Kathmandu. It is even an affront to India.
- King Prithvi Narayan Shah, the founder of Nepal, had said in 1770 that Nepal is a root vegetable between two big boulders, calling for balance and equidistance.
Background to the trip
- Long pending – Nepal has been waiting for Xi since 2014. China has been waiting for the right timing: For Nepal to have a full-fledged communist government.
- India’s marginalisation in Nepal — is largely self-inflicted. Narendra Modi chose Nepal for his first visit and promised to reset India-Nepal relations. That never happened.
- The china-nepal relationship is to be upgraded to a long-term strategic and security cooperation. Xi pledged to safeguard Nepal’s national sovereignty, independence, and territorial integrity.
- Agreements signed – 18 agreements and two letters of exchange were signed.
Agreements & Challenges
- Boundary Management Systems that help insulate China’s northern reaches with Nepal — is a perennial issue relating to the illegal passage of Tibetans.
- Anti-China activities – China’s main security concern relates to anti-China activities by 20,000 Tibetans living in Nepal who are virtually under lockdown during such visits.
- Mutual legal assistance in criminal matters – Beijing hopes will ultimately result in an extradition treaty.
- Financial assistance – Xi also announced a financial assistance package of $495 mn for the next two years which India will find difficult to match. China has overtaken India in FDI to Nepal which was about $300 mn in 2018.
- Connectivity – The feasibility study for the Cross Himalayan Connectivity Network of a railway from Kyirong to Kathmandu was approved.
- This will be extended via Pokhara to Lumbini in Terai as the China-Nepal Economic Corridor component of the Belt and Road Initiative.
- Cost of connectivity – A preliminary study by China Railway First Survey and Design Institute Group Co Ltd has noted technical, geological, scientific and engineering challenges to this. This includes its security along with high costs and risks that outweigh the benefits.
- One estimate puts the cost of the Kathmandu-Kyirong section which includes a 28 km tunnel at $2.7 bn.
- Debt trap – The question of funding invokes the memory of the Hambantota debt trap. A railway line from Lhasa to Kathmandu, unless it reaches the border with India, makes little commercial sense.
- Strategic issues – It will raise strategic doubts and uncertainties between India and China given the state of current relations.
- Opportunity – Nepa does not view the CNEC as a threat but an opportunity for it to play the bridge between the two fastest-growing economies, China and India.
- Risks to Nepal – Given the great rise of China, and its involvement in Nepal’s domestic politics, Nepal may be forced to make major strategic choices.
- India’s role – In the past, former prime ministers had sought to encourage India to join the triangular India-Nepal-China grouping. In 2016, the three countries did discuss it. But India preferred to deal bilaterally with Nepal.
- China-India plus one – After Wuhan, then Chinese Ambassador to India, mooted this as a new model, as the two countries agreed to jointly train Afghan diplomats.
- Connectivity to Nepal – the Cross-Himalayan Connectivity Network will help Nepal become land-linked from land-locked with additional entry points. This will reduce the dependence on India.
- Window to Tibet – China sees Nepal as a window to Tibet.
- Parity with India – due to its pre-eminence in Nepal and deep pockets, China has sought parity with India including enhanced defense and military cooperation as part of the new blueprint in Nepal-China relations.
- CNEC – The CNEC is more strategic than economic, especially its envisaged outreach to Lumbini which will breach India’s red line on Chinese activities in Nepal.
- India has completed its feasibility study of a railway line from Raxaul to Kathmandu. How the Kathmandu-Kyirong rail will connect with the Indian section to the south is unclear.
- The Indian military still views a PLA challenge through Nepal to the strategic Indo-Gangetic plains.
- Xi’s dream — to be the sole leader of the Asian century — is attainable:
- By keeping India anchored to the region using Pakistan China blocks India’s traditional strategic space in Nepal.
- Geography, including the open border, is in India’s favour.
- Winning back Nepal and the confidence of its people is the challenge.