Nepal has a new prime minister and it may be good news for China

On July 15, KP Sharma Oli was sworn in as the new Prime Minister of Nepal, marking his fourth term in office. Oli leads a coalition government with the biggest party in the current parliament, the Nepali Congress. This unique coalition sees the largest party collaborate with its opposition, the Communist Party of Nepal-UML (CPN-UML).

The new government was formed after the Oli-led CPN-UML withdrew its support from the Maoist Centre party-led government and proposed an alliance with the Nepali Congress. This will be the fourth government since the parliamentary elections in 2022, continuing the cycle of political instability since 2008.

Known for his anti-India and anti-West stance, Oli has built his political career by raising ultra-nationalistic fervour in Nepal. He has no qualms about his stance, which is primarily driven by his Communist ideology.

Pro-China Stance

Throughout his past three terms, Oli has consistently advocated for deeper ties with China. It would be no surprise if he continued this approach. His party, the CPN-UML, maintains active outreach and engagement with the Communist Party of China. In August last year, a high-level CPN-UML delegation was in China to hold talks with the senior members of the Chinese Communist Party (CPC).

As a landlocked country with Tibet on the north and India on the three sides, Nepal has traditionally been a stronghold of Indian influence due to shared traditional socio-cultural, religious, political, and economic ties.

An open border and a visa-free regime have historically facilitated closer ties between the people of the two countries. China, on the other hand, sees India’s presence as counterproductive to its strategic interests, largely regarding Tibet.

Oli left no stone unturned in off-tracking relations with India. He used the 2015 border blockade issue to convene anti-India protests in Nepal. In 2016, he visited China and signed a Transit Treaty to conduct their-country trade using Chinese ports located approximately 4,500 km from the capital, Kathmandu, to reduce dependency on Indian ports situated 500 km from Nepal.

A transit treaty with China proved to be merely a political gimmick, with no single container being imported through Chinese ports to date. Oli, however, continued attacking socio-cultural ties, and the 2019-20 phase saw another critical phase in Nepal-India ties with Kathmandu raising the border-dispute with India.

The politicisation of the border dispute has helped leaders like Oli to create a dedicated ultra-nationalist outlook for himself and his Communist Party of Nepal-UML.

Tibet’s Primacy for China

Nepal is currently home to an estimated 10,000 Tibetan refugees. To escape Communist China’s invasion of Tibet in 1950, thousands of Tibetans fled to India via Nepal, but many stayed in Nepal itself.

While the number of Tibetan refugees was close to 30,000, thousands of them have moved to third countries in the last seven decades, especially to the United States, Canada, Australia, and Switzerland.

However, Tibetans living in Nepal have been a serious concern for China due to their faith in the Dalai Lama and connection with the Tibetan Government in Exile logged in India’s Dharamshala.

Nepal’s importance to China can be realised from the fact that the Central Intelligence Agency (CIA) used Nepal’s northern region to support Tibetan resistance forces and disrupt the activities of the People’s Liberation Army (PLA) from 1957 to 1969.

During the centuries-old monarchical rule in Nepal (1768-2006), Tibetan Buddhist monks and traders freely travelled to Nepal. After the Chinese took over Tibet, many Tibetans entered Nepal. While some stayed in Nepal, many travelled to Dharamshala in India.

Until 1990, Tibetans were issued refugee cards , but the Chinese bargained against it by supplying arms and ammunition to the Royal Nepal Army. As a result of the military support from China, Nepalese security agencies came heavily upon the Tibetan refugees carrying out demonstrations against the ‘illegal annexation of Tibet’ and supporters of the ‘Free Tibet’ movement.

Extradition Treaty, BRI and Joint-Military Exercises

From the first democratically elected government led by the Maoists in 2008 to all other democratically elected regimes to date, they have spread a tight security cover to stop any Tibet-related demonstrations in Nepal under Chinese pressure . During his second tenure in office in 2019, Oli had even agreed to sign an Extradition Treaty with China.

Still, following pressure from international and local human rights organisations, the Extradition Treaty was withdrawn, which left the visiting Chinese President Xi Jinping unhappy. Had the treaty materialised, it would have jeopardised the future of thousands of Tibetans, especially ones without a refugee card.

Under China-friendly regimes in Nepal, Beijing has successfully convinced the Himalayan nation to join the Belt and Road Initiative (BRI) in 2017, initiate the Sagarmatha Friendship Joint Military Exercise in 2018, and sign the Mutual Legal Assistance Treaty in Criminal Matters in 2019. These agreements were strategically crafted to counter Indian and Western influence in Nepal.

While the BRI is yet to advance due to Nepal’s reluctance to accept high-interest loans, China still regards it as a diplomatic success against India’s influence. Beijing is likely to push for progress in BRI under the Oli administration. Additionally, China has been pursuing Nepal to join its Global Security Initiative (GSI). The centrist parties like the Nepali Congress have opposed it, but how Oli proceeds will be crucial to watch.

Countering the US Influence

After US President Joe Biden signed the “Promoting a Resolution to the Tibet-China Dispute Act” into law on July 12, Chinese security antennae have gone up. The act reaffirms American support for the rights of Tibetans in Tibet and elsewhere, advocating for greater dialogue between the Dalai Lama and the Chinese government without preconditions. It refutes Chinese claims that Tibet has been part of China since ancient times and calls for increased public efforts to counter misinformation about Tibet.

China has opposed the ‘Promoting a Resolution to the Tibet-China Dispute Act’, asserting that it “grossly interferes in China’s domestic affairs, undermines China’s interests, and sends a severely wrong signal to the ‘Tibet independence’ forces. China firmly opposes it and has protested to the US side.”

The May 19 meeting of the US bipartisan delegation with the Dalai Lama in Dharamshala, which included former House Speaker Nancy Pelosi, also invited sharp criticism from China. There remains little doubt that the United States is looking to counterbalance China using the escalation strategy on Tibet, as often seen in the case of Taiwan.

For China, any Tibet-related activities in India and Nepal by the host countries or external actors like the United States pose a significant challenge to peace and stability in Tibet under Communist China’s control.

Therefore, with a pro-China leader in Nepal, Beijing will aim to dismantle the connection between the ‘Free Tibet’ forces and seek surveillance support from Nepal on their activities. Furthermore, China seeks to ensure that Nepal aligns more closely with its regional strategy to counteract any pro-Tibetan independence movements and adhere to the ‘One China’ principle.

Besides Tibet, China would want to slow down the Millenium Challenge Corporation (MCC), a $500 million grant programme from the US government that assists Nepal in maintaining road quality, increasing the availability and reliability of electricity, and facilitating cross-border electricity trade between Nepal and India.

Through MCC, the US aims to spur investments, accelerate economic growth, and reduce poverty in Nepal. However, China sees it as a counter to the BRI and accuses it of being an American “Trojan Horse” aimed at destabilising regional peace. To compound Chinese concerns, MCC is one project India has tacitly agreed to collaborate on and does not see as being against Delhi’s interests or influence.

Conclusion

Oli will undoubtedly attempt to shift Nepal’s foreign policy outlook, especially prioritising China. Given his past critical comments on external influence in Nepal’s domestic and foreign policy, the Nepali Congress — a key coalition partner — has strategically bargained for the Foreign Ministry to maintain a balanced foreign policy to avoid any misadventure that may cause irritation with India or the United States.

Rishi Gupta is the Assistant Director at the Asia Society Policy Institute, Delhi. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.