Dipendra Adhikari, Nepal

and
ZHANG Sheng, China

In October 1st, 2019, the People’s Republic of China (PRC) is celebrating the 70th anniversary of its establishment and retrospecting its diplomatic history with 178 states that have diplomatic relationship with the PRC. In August 1st, 2019, Nepal, an important neighbor of China that enjoys prolong friendship with China for thousands of years already, is also embracing the 64th anniversary of its diplomatic ties with the PRC. In such a historically significant time, it is incumbent responsibility of Chinese and Nepalese scholars to retrospect our history of friendship and to look forward into the prosperous future of China and Nepal from political, economic, and social perspectives. In this paper, we aim to present China-Nepal relationship since the ancient times to the present world, and to discuss future challenges and opportunities of Nepal-China friendship. We believe that Nepal and China not only have prolonged historical friendship, but also enjoy prosperous future in terms of cooperation and development as well.

History of Nepal-China Relations:

China and Nepal have thousands years of communication and friendship. The earliest document of China-Nepal relationship is the legend of Chinese monk Manjushree, who allegedly travelled to Nepal and helped “establish human settlement in Kathmandu Valley.

 

“Monk Faxian from Jin Dynasty (266 C.E.-420 C.E.) visited Buddha’s birth place Lumbini and Monk Xuanzang from Tang Dynasty visited Lumbini too in 633 C.E. In 639 C.E., Nepali King Anshuverma gave his daughter Princess Bhrikuti to Tibetan King Songtsen Gampo in the 7th century, and the other wife of Songtsen Gampo is Princess Wencheng from Tang Dynasty. Besides Nepal’s traditional close ties with Chinese Tibet, this relationship between Princess Bhrikuti and Princess Wencheng indeed linked Nepal and Tang Empire much closer. From Nepalese side, monks such as Buddha Bhadra Shakya and Shilamanj visited China and left significant historical records. During the Yuan dynasty of China (13th century), Nepalese artist Arniko went to Beijing to construct a famous Buddhist pagoda10. During the Qing dynasty, however, partially because of British instigation, China-Nepal relationship started to have difficulties, and three wars broke out respectively in 1788, 1791, and 185511. After the War of 1855, the Qing court accepted the Treaty of Thapathali between Kathmandu and local government of Lhasa (under the rule of the Qing dynasty) in 1856, and this treaty granted a number of privileges to Nepal such as Nepalese people enjoyed partial extraterritoriality in Tibet; Nepalese merchants did not need to pay taxes in Tibet; and Tibet must pay 10,000 Nepalese money to Nepal every year12. Because this treaty was intentionally designed to be very vague, both China and Nepal had different interpretation of it: China believed that it was still the suzerain of Nepal in his tribute system, and the money it pays to Nepal annually was not tribute but simply compensation; Nepal, however, interpret this as Tibet paying tribute to Nepal and saw Tibet as a vessel of Nepal. This treaty was seen as an unequal treaty from the Chinese side, and it was an important issue in China-Nepal negotiation in the process of establishing diplomatic relations.

In October 1st, 1949, the People’s Republic of China was established. Two years ago, India also gained its independence from Britain. India regarded itself as a rightful successor of all the privileges that British colonizers had in South Asia, and regarded Nepal as its backyard. Partially due to India’s negative role in preventing Nepal and China from approaching to each other in order to keep its “special relationship” with Nepal and partially due to Nepalese monarchy’s suspicion toward Communist government, the PRC was not able to start diplomatic relationship with Nepal immediately13. In 1951, The Chinese People’s Liberation Army (PLA) liberated Tibet from the theocratic serfdom of Dalai Lama and his landlord class, and this important news certainly attracted attention from Nepal. Regarding Tibet’s Liberation, King Tribhuvan made a very interesting statement, “there is no change in our traditional relations even after the political changes in Tibet.
From the perspective of China, King Tribhuvan’s statement has two meanings: Positively, he affirmed that he was willing to continue the prolonged historical friendship between China and Nepal with the PRC; negatively, however, China believed that King Tribhuvan also meant that he expected Nepal’s tributary “traditional relationship” with Tibet to continue.

In 1953, the last Tibetan tributary team to Nepal highly evaluated the liberation of Tibet and asked Nepal to “readjust its traditional relations and policy15.” In 1954, Chinese Premier Zhou Enlai, in his speech in the National People’s Congress, announced that China was ready and willing to establish diplomatic relations with Nepal on the basis of equality and mutual respect6. With King Mahendra succeeded the throne, PRC’s international influence rose, and bilateral trade agreement China signed with India in 1954 warned Nepal the possibility of China and India getting closer, breakthrough of Nepal-China relations came soon.

In April, 1955, during the first Afro-Asian Conference held in Bandung, Nepalese and Chinese delegates had successful meetings. In 1955, a Chinese delegation led by Chinese Ambassador to India Yuan Zhongxian visited Nepal and agreed to establish formal diplomatic ties. August 1st, 1955, China and Nepal signed an agreement to formally establish bilateral diplomatic relations on the basis of Five Principles of Peaceful Co-existence (Panchasheel). It is important to point out that Nepal was still not diplomatically independent today, and China had to consult the opinion of Nehru all the time in the process of establishing diplomatic relationship with Nepal.

In 1959, Dalai Lama launched an armed rebellion against the democratization campaign in Tibet. After the failure of the rebellion, Dalai Lama treacherously fled to India with the help of the CIA. Dalai Lama trained his military organization in the territory of India and Nepal, but Nepal officially upheld the ‘One China Policy’ and suppressed the Khampa Mutiny. Nepal’s commitment to One China Policy has been strongly welcomed by China.

In 1962, the Sino-Indian War broke out in South Tibet (or Arunachal in Indian terminology). The remarkable military strength China demonstrated in this war deeply impressed Nepal and inspired Nepal to use China to balance out Indian dominance in order to achieve more national independence. In 1963, the China-Nepal highway construction started to be constructed and was completed in 1967.

In 1969, Nepal demanded India to withdraw its military advisors and observers in Nepal. From realist calculation, Nepal effectively used China to gain more independence for itself.
China, unlike India, strongly supported the “Zone of Peace” proposal of Nepal came up with by King Birendra in 1975. In 1976, the Agreement on bilateral trade was signed. In 1978, the civil aviation agreement was signed and in 1981, the trade and payment agreement was signed between China and Nepal. In 1996, Chinese President Jiang Zemin visited Nepal, and two states agreed to establish a good-neighborly partnership for generations20. In 2008, Prime Minister Prachanda visited Beijing during the Olympics. In 2009, Prime Minister Nepal visited Beijing, and both countries agreed to establish a comprehensive and cooperative partnership of friendship for generations21. In 2012, Premier Wen Jiabao visited Nepal. Both sides published a joint communiqué, and declared 2012 as “a year of China-Nepal friendship.”

Belt and Road Initiative: China-Nepal Relations in the New Era:

As China enters the new era under the leadership of President Xi Jinping, China-Nepal relations need to explore further opportunities. One of the largest opportunities is certainly the Belt and Road Initiative (BRI). The BRI, announced by President Xi in 2013, is an ambitious project which is planned to “involve potentially 65 countries and 4.4 billion people22.” Until April 2019, China has signed 173 BRI cooperation documents with 125 countries and 29 international organizations in the world23, which means that it actually received echo and support from a large number of countries which is almost twice as it initially planned to involve. Nepal, as China’s important southern neighbor, is also a country which signed cooperation document with China in the BRI program BRI is the first time in the modern Chinese history that China uses massive economic project to actively construct a more favorable international environment for itself, and thus it has remarkable significance. China desires to use economic projects to enhance its relationship with neighboring states and to expand China’s soft power in East Asia, Central Asia, South East Asia, South Asia, and even further in the Middle East, Europe, and Africa. China also desires to economically empower and to support its international friends: It strives to economically support Pakistan through the China-Pakistan Economic Corridor, to support Russia through the construction of the “Silk Road on Ice,” and to support China’s African friends through massive investment and aids. Moreover, China wants to diversify its business partners and to better prepare itself from threats from the West, especially the United States.

Apparently, the BRI is a good opportunity to Nepal and actually Nepal shares the same concern with China on aforementioned issues in certain degree: Nepal, as the best friend of China except Pakistan in South Asia, should have strong incentive to become a development model of BRI in South Asia; Nepal, as the only state in South Asia governed by Communist Party, also have incumbent responsibility of being cautious against possible U.S. imperialist intervention and to use Chinese support to defend its national interests. Therefore, there is no reason for Nepal to reject the BRI.

In South Asia today, BRI is often compared to the Indo-Pacific Strategy (IPS) of the United States. Nepalese people must be fully aware that the IPS’ fundamental motive is never about peaceful economic development but simply about containing Chinese influence in Asia and preserving the global hegemony of the U.S. IPS is mainly a political and military plan, rather than an economic and development plan.

BRI, on the other hand, has geopolitical considerations to create a more favorable international environment for China, but never have clear strategic target. For Nepal, a country with prolonged glorious history of neutrality and peace, BRI offered by its Asian neighbor should definitely be more attracted than a military strategy named IPS came up with by the largest imperialist country in the world.

Sino-Nepalese political relationship is very stable and fruitful because this relationship is based on mutual respect, peaceful co-existence, and it is a win-win relationship. China appreciates and expects Nepal to continue supporting the One China Policy, and China supports the sovereignty and integrity of territories of Nepal.

The most valuable part of Sino-Nepalese relationship is that China appreciates and expects Nepal to continue its non-alignment neutral political stance. China does not unrealistically expect Nepal to be a Chinese “ally,” nor pursue any sort of unequal “special relationship” with Nepal, but fully respect Nepal’s unalienable rights of keeping neutrality and peace. China only requests the minimum from Nepal, which is not to be used by the West as a weapon against China, and thus China-Nepal relationship is equal and mutually respectful.

Opportunities and Challenges in the Economic Perspective of China-Nepal Relations China-Nepal economic relationship can be traced to the aids China provided to Nepal in the 1950s. Since 1956, China has been offering aids to Nepal. Chinese foreign aid consists mainly three parts: grants, interest-free loan, and concessional loan.

Since 1956, China provided aid to Nepal mostly in the aspects of infrastructure projects including irrigation, railroad, hydro-electricity stations, sugar factories, fur factories, and fabric factories25. Among all South Asian states, Pakistan and Nepal are the priorities in China’s foreign aid policy26. After the earthquake in 2015, China was one of the states that provided aids to Nepal the earliest: 46 tons of goods, worth 60 million Yuan, were granted several days after the earthquake27. During Indian blockade in 2015, shortage of resources and humanitarian crisis happened in Nepal, so China donated 1300000L fuel to Nepal in order to show solidarity.

In terms of bilateral trade relations, China is the second largest trade partner with Nepal. China exports industrial products such as IT products, fabric cloths, and machines to Nepal; Nepal exports fur, metal products, and handicrafts to China. In 2018, the bilateral trade amount is 99 million dollars, which is 13.1% more than last year. China export is about 97 million dollars, and Nepal export is about 2 millions, 29.1% more than last year. This data clearly demonstrates that the large challenge in economic relationship between China and Nepal is Nepal’s large trade deficit.
The cause of the current trade deficit is that: First, Nepalese exports are structurally not diversified. Most of Nepal’s exports are natural resources or handicrafts products, and therefore Nepalese exports will face natural disadvantage. Second, Nepal is currently slow in terms of industrialization, and thus there is no systematic industrialized supply chain for industrialized goods. This problem always persists throughout history and in the contemporary world. When an agricultural states trade with an industrial state, the agricultural state will naturally be in disadvantage and trade deficit often happens. To solve this problem, Nepal needs to direct the benefits from BRI into infrastructure investment, factories investment, human resource investment (education!), and even new emerging fields such as IT.

Despite the existence of trade deficit in Nepalese side, China-Nepal economic relationship, has bright future. BRI can bring tremendous opportunities for Nepal in the future. First, BRI focuses on infrastructure constructions, so Nepal needs to focus on transportation improvement. The Nepal-China Railway program needs serious efforts from both sides to complete. Second, Nepal needs to direct BRI to infrastructure and human resources investments. Without enough infrastructure and human resources investment, large youth population cannot be transferred into productive labor forces, and without labor forces, Nepal cannot transfer its large young population into market advantage. Third, Nepal should apply for agricultural assistance from China. China has advanced agricultural technologies and experiences and thus only uses 8% of the world’s arable land to feed 20% of the world’s population30. Nepal, as a state that still heavily depends on food import from India, should focus on improving its agricultural technologies and pursue food self-sufficiency. Fourth, Nepal should fully utilize its natural resources such as hydropower, forest, woods, herbs, and develop tourism to attract more Chinese tourists in order to decrease trade deficit. Nepal’s goal should always focus on self-sufficiency, and closer ties with China through BRI can help Nepal to balance the economic domination from South.

People-to-People Relations: Cultural Perspective in China-Nepal Relations China has always been stressing that “People-to-people ties provide an anchor for the Belt and Road Initiative. To enhance people-to-people ties and cultural communication between Chinese and Nepalese people is crucial for the future development of bilateral relations.
Chinese and Nepalese civilizations resemble in terms of their spirit and world views. In China, Confucianism, Buddhism, and Daoism have been the dominating religious beliefs, and common people normally practice all three faiths together.

One can frequently see people putting statures of Confucius, Buddha, and Lao Zi together and pray to them at once in China. The Confucius concept of Zhongyong which request people never be extreme is very popular in the Chinese civilization, and thus Chinese society is very tolerant for foreign ideas and foreigners. In Nepal, data shows that 86.2% of the population believe in Hinduism and only 7.8% believe in Buddhism, but among the common people, most people are also influenced by Buddhism and see Buddha as a sacred figure too. Nepal is tolerant to different religious and beliefs as same as China is. Therefore, it is confident for us to say that Chinese and Nepalese civilizations all enjoy tolerant and peaceful common essence.

Buddhism should serve as a common factor uniting Nepalese and Chinese culture. China has the world’s three largest schools of Buddhism: Mahayana, Theravada, and Tibetan. Mahayana Buddhism assimilated into Chinese traditional philosophy and evolved to Han Buddhism, a Buddhist school with strong Chinese characteristics.

Han Buddhism and Tibetan Buddhism are born in the land of China, and Theravada Buddhism is also commonly practiced among ethnic minorities in southern Yunnan province. Since the ancient times of monk Xuan Zang and Fa Xian, Buddhism has been linking China and Nepal together. Today, Buddhism is still and should still serve as a common factor uniting China and Nepal. For example, The Nepal China Society is building monastery and research center on Buddhism; Lumbini Buddhist University of Nepal has cooperation with Chinese institutions. China also built the Zhonghua Chinese Buddhist Temple in Lumbini, introducing traditional Han Buddhist temple architecture to the Nepalese people.

In 2018, more than 150,000 Chinese tourists visited Nepal. This is the highest number of annual Chinese tourists to Nepal. In 2018, more than 6,000 Nepali citizens are currently living in China either for studying or for working. Confucius Institute is currently located in Kathmandu and teaching about 600 Nepali students Chinese language. It is apparent that China and Nepal are becoming increasingly culturally closer as well.

Conclusion:

China and Nepal have a prolonged history of friendship and this historical friendship has been promoted to a new level after the establishment of the PRC. In terms of political relations, China and Nepal enjoy stable, fruitful, and win-win relationship based on mutual respect, peaceful coexistence, and mutual support for each other’s core national interests; in terms of economic relations, although Nepalese trade deficit exists as a challenge, the BRI will bring tremendous opportunities to Nepal and Nepal should take active role directing BRI projects to achieve its development goals; in terms of cultural relationship, both countries have cultural similarity and historical connections, and this people-to-people tie is enhancing as BRI enters to Nepal. We are confident that 64 years of China-Nepal relationship is a positive one that benefited and will still benefit both countries, and China-Nepal relationship will be enhanced to another high level in the new era.

# both the authors of this article are International Relations Expert and Researchers: Ed. N. P. Upadhyaya.
# Thanks to the distinguished authors and the team of the editorial team of experts of the Nepal Council of World Affairs, Annual Journal, 2020.

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