PM OLI’S CHINA VISIT Credibility Crisis

Prime Minister KP Sharma Oli’s challenges in his forthcoming China visit will be to restore Nepal’s credibility

June 16, 2018, 11:31 a.m. Published in Magazine Issue: VOL.11, No.-22, June 15, 2018 (Ashad 01, 2075) Online Register Number: DOI 584/074-75

As Prime Minister K.P Shrma Oli’s team is busy preparing the agenda for his official visit to China, PM Oli’s challenges are likely to be to restore credibility and level of confidence, which has eroded due to the earlier decisions taken by Nepal.

Although Nepal and China do not have major differences on any diplomatic and bilateral matters, some of the decisions taken by Nepalese governments, including his own, have badly damaged the credibility of Nepal’s commitment.

Although Sher Bahadur Deuba-led government abruptly cancelled the Budhigandaki Agreement during the elections, his own government cancelled West Seti agreement recently. The Chinese officials did not issue any statement expressing any anger publicly. However, the Chinese side may not be happy either.

Chinese diplomats have privately expressed their displeasure questioning the credibility of the government. Signed in the presence of two former prime ministers and the backing of Nepali Congress, the Chinese are yet to reconcile with the cancellation of Budhigandaki Project by Kamal Thapa. The recent decision of Oli-led government to abruptly cancel the West Seti Agreement is another blow to China.

Canceling these two agreements abruptly and without any notice, Nepal has shown that the government is unreliable. At a time when Chinese investment in Nepal is pouring in various sectors and China is leading in the total FDI, the recently amended Labor Regulation, which restricts the number of foreign investors presence, will likely affect the future Chinese investment and currently undergoing projects. Along with these, Chinese aided projects are facing a number of problems in Nepal. 

Although Nepal and China do not have any major diplomatic and political disputes, the nitty-gritty of issues are gradually eroding Nepal’s credibility in front of Chinese leaders. How Oli will diplomatically assure Chinese leaders showing Nepal to be a credible country to make deals, with his words and actions, will determine the future Chinese economic cooperation and investment in Nepal.

“China hears a lot verbal assurance and commitments but what it wants now is the political assurance for implementation not in word but in action,” said a China expert on condition of anonymity. “Chinese know the limit of Nepal and Nepalese leaders but they want Nepalese leaders to understand their rightful treatment as a neighbor.”

If Bangladesh handles things tactfully, protecting Chinese investment and maintaining friendly relations with other neighbors, why cannot Nepalese leaders do it?” said the expert. 

As Prime Minister Oli’s visit is coming closer, Nepal is preparing the agenda for the visit. Foreign minister Pradeep Gyawali made a stop-over in Chinese capital Beijing on the way to Mongolia and discussed the agenda with Nepalese ambassador Leelamani Paudyal.

“The primary focus of this visit will be implementing the 10-point agreement signed by the two countries in 2016. Prior to the agreements with China, we were exercising our rights as a landlocked country in terms of trade and transit only with India, but the Trade and Transit Treaty with China made way for an alternative. The second focus area pertains to connectivity; mainly connectivity through railway, transmission lines or energy cooperation, and roads. These were the focus areas of Prime Minister Oli’s first visit, and I believe it will remain so this time too. Third focus will also be on increasing Chinese investments in Nepal. The fourth focus area will be agriculture. China has the  world’s largest population, and they feed themselves. They sometimes even export their agricultural products. Nepal is largely an agrarian country. So how can we use Chinese expertise in terms of modernizing our agriculture sector and increasing our production capacity is another important focus area. Another big agenda will be hydropower,” said  Rajan Bhattarai, Prime Minister Oli’s close foreign relations advisor in his interview with The Kathmandu Post.

Prime Minister KP Sharma Oli is expected to begin his China visit on June 19. Among others, China is also reportedly sending extradition treaty to Nepal. “We have not held any discussion on the issue related to Nepal-China extradition treaty. The extradition treaty is not on the agenda,” said Home Minister Ram Bahadur Thapa. “But other security-related issues will be discussed.”

Although Prime Minister Oli is yet to say anything about Budhigandaki, China will provide support to construction of two friendship bridges in Tatopani and Bhotekoshi in the border.

PM Oli is paying his official visit to China in a different circumstance now, with a government of two thirds in majority, how he will restore Nepal’s confidence and credibility in China remains to be seen. 

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