Nepal's geo-strategic location is important for China for several reasons.
China wants Nepal to avoid foreign influences that could cause trouble in Tibet and to monitor foreign intervention in Nepal’s domestic affairs. China's foreign policy interests in Nepal are strategic, political, and economic.
Since the establishment of diplomatic relations between Nepal and China in 1955, the bilateral relationship between the two countries has grown steadily, adapting to the changing times and needs. The relationship between Nepal and China is considered problem-free, with both nations committed to respecting each other’s independence, sovereignty, and territorial integrity. Over time, these excellent bilateral relations have been further consolidated and strengthened through high-level visits and contacts.
During President Xi Jinping’s visit to Nepal in 2019, the existing bilateral relations between Nepal and China were elevated to a strategic level. It was agreed by both countries to transform the Nepal-China relationship from a “comprehensive partnership of cooperation featuring everlasting friendship” to a “strategic partnership for development and prosperity.” This elevation to a strategic level allows for defense cooperation while maintaining conventional methods of cooperation.
The factors that pushed China to elevate Nepal-China relations to a strategic level are worth considering. Historically, China has shown interest in Nepal's strategic importance, notably expressing its willingness to recruit Nepali soldiers, as seen in the tripartite agreement between the United Kingdom, India, and Nepal for Gurkha recruitment. This interest was reiterated in 1962 after the India-China war. Mao's view of Nepal as one finger among five indicates China’s desire to maintain influence over Nepal.
Revised interest rate corridor system introduced
Nepal's strategic importance has grown as it lies between emerging regional superpower India and global superpower China, with interests also converging from the USA. China's awareness of the encirclement and containment policy of the West, and India’s efforts to counter its influence in South Asia, drives its desire to maintain a strong presence in neighboring countries, including Nepal.
Nepal and Tibet share a long border of more than 1,440 kilometers. China, which shares borders with 15 countries, has contentious relationships with many of them. Among the few problem-free relationships are those with Pakistan, described as an “all-weather friend,” and Nepal. Thus, China has a significant responsibility to maintain cordial relations with its neighbors to ensure peace and harmony. Given the complicated Sino-Indian relationship due to recent border skirmishes, smaller nations within the Himalayan range must navigate these dynamics carefully.
Nepal is sensitive to the core concerns of its neighbors, both to the north and south. It has been a consistent state policy to ensure that Nepal’s territory is not used against any friendly country. Nepal reiterates its commitment to the One China policy, acknowledging that Taiwan and Tibet are inalienable parts of Chinese territory, and assures China that it will not allow any anti-China activities on its soil.
However, turning these commitments into practical reality is challenging. During Xi Jinping’s 2019 visit, Nepal-China relations were elevated to a strategic level. This strategic partnership can be interpreted differently depending on one's field of expertise, whether it focuses on military hardware, software, or economic advancement.
As technology evolves, the definition of strategy changes. In the 1970s, crude oil was seen as a strategic commodity. Today, semiconductors and AI are considered strategic due to their critical role in future conflicts and economic competitiveness. Nepal, with its abundant but unexplored natural resources like raw uranium, could attract technologically advanced countries.
Nepal’s political stability has been questioned due to frequent changes in government. Elected governments have at times loosened their control over Tibetan refugees, allowing them to engage in activities advocating for Tibetan freedom. This instability may concern China, viewing it as a threat to its control over Tibet.
China’s strategic interest in Nepal includes ensuring Nepal's territory is not used for anti-China activities, particularly those related to the free Tibet movement, and countering India’s influence in Nepal. Maintaining good relations with Nepal is crucial for China’s security. An unstable Nepal poses security threats and hinders development agendas.
China’s efforts to enhance connectivity between Nepal and Tibet through road, rail, telecommunication, and electric grids should be seen from this perspective. These developments aim to bring the two nations closer and support Nepal’s progress, as social unrest in neighboring countries can adversely affect others.
Unlike past Chinese cooperation which focused on grant assistance in infrastructure, present-day cooperation is more mercantilist. Nepal needs to attract Chinese investment in strategic sectors like semiconductors, communication equipment, and AI-supported industries, which add value to trade and commerce and contribute to national income.
Nepal's geo-strategic location is important for China for several reasons. China wants Nepal to avoid foreign influences that could cause trouble in Tibet and to monitor foreign intervention in Nepal’s domestic affairs. China's foreign policy interests in Nepal are strategic, political, and economic. Chinese aid has successfully maintained its strategic interests in Nepal, countering the influence of India and other powers.
In conclusion, it is in Nepal’s national interest to attract Chinese investment and improve trade and transit relations. Enhanced connectivity with Tibet and increased Chinese investments can elevate Nepal-China relations to new heights, ensuring mutual benefits and strategic stability in the region.
