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China’s Policy on the DPRK’s Nuclear Issue: Cooperation and Disagreements with the US and Russia

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The main aims of this article are to investigate and explain China’s policy, cooperation and disagreements with Washington and Moscow on the Democratic People’s Republic of Korea’s (DPRK or North Korea) nuclear issue.

As a permanent member of the UNSC and an important player in international relations, China has the capability and authority to address and solve internationally important problems. In turn, international society is also interested in Beijing continuing its active involvement in the improvements in world security․

China plays a decisive and important role in the negotiations regarding the DPRK’s nuclear issue. The de facto withdrawal from the Treaty of the Non-Proliferation of Nuclear Weapons (NPT) by the DPRK led to a new political situation in the international community. The DPRK’s nuclear weapons may trigger a decision by other Far East countries to acquire nuclear arsenals. The balance between the DPRK and the Republic of Korea (ROK or South Korea) has already been violated in favor of the former. Whether the ROK will continue to rely on the American nuclear umbrella or develop its own nuclear weapons depends on the final results of negotiations. Japan has previously announced that the DPRK’s nuclear arsenal is a threat to its national security, which means that Japan may consider a possible substitute for the American nuclear guarantee. Tensions regarding the DPRK’s nuclear issues threaten the entire political and economic stability of the Far East. China is the second-largest economy in the world, and Japan and the ROK are extremely well developed economies. The Association of South East Asian Nations (ASEAN) and Indian economies continue to grow rapidly. Tension or military actions in the Korean Peninsula can harm economic development throughout the entire region. However, after missiles and nuclear tests, the DPRK seems to be playing its own game, as it has not accepted UNSC resolutions. Officially, Pyongyang announced its withdrawal from the NPT and rejects international norms; this behavior discredits the effectiveness and authority of the UN, as well. In a broader sense, the DPRK continues to attempt to solve its national security problems by developing missile systems and nuclear weapons. However, these projects harm the DPRK’s political relations with the international community, including with allies such as China. When the DPRK began nuclear tests, China was initially surprised and attempted to punish the DPRK for its actions by voting for sanctions against the nation.

The following question therefore arises: Which action is more useful for a state? Developing nuclear weapons would give the opportunity to deter any offensive activity, whereas having allies and expanding economic relations would deter any possible revolutions or economic collapse. Recent world history offers a cogent example. The Soviet Union was one of the most powerful states in the world, but history has nevertheless shown that it is difficult to maintain sovereignty without a modern economy, free trade and open economic relations with the international community. Moreover, if a state’s economy collapses, no nuclear weapon can help. The next hypothesis is that the DPRK’s government understands that the ROK’s economy develops quickly and that they are far from the ROK’s level of economic development. However, they want to show their domestic audience that they are building a modern and strong state. Although the Strategic Offensive Reduction Treaty and New Start

treaties between Russia and the US might encourage other countries to reduce their nuclear capabilities, the DPRK’s nuclear tests can lead to a new nuclear arms race.

View from Beijing on the DPRK’s Nuclear Issue

In response to the DPRK’s nuclear tests, the UNSC chose sanctions as the appropriate way

of halting the proliferation of Weapons of Mass destruction (WMDs) in the Far East. UNSC sanctions on the DPRK primarily targeted the military, financial and nuclear sectors of this country. China condemned the DPRK’s nuclear test and voted affirmatively for Resolutions․

With these steps, China sent a message to its partners in Pyongyang, stating that Beijing is not interested in a nuclear arms race in the Far East. Chinese decision makers sent another message to Western colleagues stating that they are ready to cooperate within the framework of negotiations and would not accept any attempt to solve the DPRK’s nuclear issue militarily.

Contributions of the Chinese researchers show that the opinions of China’s researchers are divided on this issue. One segment of Chinese researchers believes that the DPRK is not China’s friend and that its behavior and nuclear arsenal is a threat to Chinese security. The second segment of Chinese researchers believes that the DPRK is a buffer between China and Japan and between Chinese and US troops that are based in Japan and the ROK and that China must help the DPRK for this reason.

In turn, the second segment of Chinese researchers can be further divided into two groups. The first group believes that China should help the people of the DPRK because of the longstanding Sino-Korean relationship, but representatives of this group like to add that the Chinese do not like the Kim dynasty. The second group of this segment of Chinese researchers believes that the DPRK is China’s strategic partner, as evidenced by the Sino-

North Korean Treaty of Friendship, Cooperation and Mutual Assistance of 1961, and that China must continue to help the DPRK maintain its political system.

If we consider, that the DPRK is still China’s ally due to the Treaty of Friendship, Cooperation, Mutual Assistance, that was signed by China and DPRK in 1961, which  obligated each party to come to the aid of the other if attacked, so the following question arises: Why did China accept sanctions against its so-called ally?

China is disappointed by the fact that nuclear weapons technology is being spread to neighboring states, which may be a reason for the possible nuclear arms race in the Far East.

Thus, if the international community could not find the ways to urge the DPRK’s government to completely, verifiably, irreversibly dismantle its nuclear arsenal, it is possible that other countries in the region such as Japan and ROK, which have the capability to build nuclear weapons, would strive to repair the balance and would start their own nuclear programs. They can announce that the DPRK’s nuclear weapons threaten their security and that they need to build their own to deter the DPRK. It is worth mentioning, that before the first nuclear test of the DPRK, China was the only legal owner of nuclear weapons among its eastern neighbors. Nuclear weapons give China an advantage against its perpetual opponent, Japan. This fact provided an impetus to China to stop the proliferation of nuclear weapons in NEA.

The Chinese nuclear arsenal deters Japan, but what will happen if Japan creates nuclear weapons as well?

China would lose its coercive deterrent against its historical opponent.

I believe that China will continue to press the DPRK and urge it to dismantle its nuclear arsenal, but Beijing will never entirely turn to the US and leave the DPRK in complete isolation. It appears that if China agrees with the US’s wishes to isolate the DPRK that such an event would mean the beginning of the collapse of the DPRK. I believe that after this step, the US would reach a separate agreement with Pyongyang. The history of international relations features several examples designed and implemented by the US as follows: the first event was when the US improved its ties with China without discussing this step with Japan, and the second event was when the US improved its relations with Vietnam – a country that the US had struggled with in the past. Currently, the US serves as a reliable patron for the guarantee of security in Vietnam. The US-Vietnam strategic partnership is surely in opposition to China’s interests. From my point of view, China would continue to support the DPRK in building its economy, which would give Beijing a chance to maintain its influence over the DPRK. Further, Beijing will continue to improve its ties with the ROK, as the ROK is the third-leading economic partner of China. China will attempt to find ways to demilitarize and denuclearize the Korean Peninsula with the ROK. From Beijing’s perspective, these steps will provide an opportunity to reduce the US’s influence in the Far East. We can conclude that from China’s perspective, “no problems in the region will eliminate US interference in regional affairs.” In sum, during the negotiations for preventing further nuclear proliferation in the Korean Peninsula, China is in the most difficult position because it attempts to push the DPRK to continue the negotiation process and to stop developing new nuclear weapons. China also makes an effort to ease sanctions on the whole. Beijing cannot allow an unstable situation in the DPRK, which would cause thousands of refugees to flee from the DPRK to China; thus, China is interested in the DPRK’s stability. Additionally, the government of China believes that if a communist regime is maintained in Pyongyang, China would be able to use the DPRK’s massive army in a possible “West-East” confrontation.

China-US Disagreements and Cooperation on the DPRK’s Nuclear Issue

China-US competition for political influence on the Korean Peninsula began following the Second World War and escalated during the Korean War, as China was struggling with the DPRK against the US and its allies. The DPRK’s nuclear arsenal and tense relations between the DPRK and the ROK remain threats to the security and stability of the entire Far East. The conflicting parties have powerful military allies. On July 11, 1961, China and the DPRK signed the Treaty on Friendship, Cooperation and Mutual Assistance, and in 1953, the ROK and US signed Mutual Defense Treaty. Due to this treaty, the US maintains troops in the Korean peninsula.

In fact, the US has a military presence near China’s eastern borders (in Japan and in the ROK), and the DPRK’s nuclear issue has given the US an excuse to relocate more troops to the region and to relocate its Terminal High Altitude Area Defense (THAAD) advance missile defense system to deter the DPRK.

From Beijing’s perspective, a concentration of US troops or relocation of the US missile defense system near its borders are also a real threat to China. China helps maintain Pyongyang’s regime so that its army can keep away and deter US ground troops from Beijing and Eastern China, which are located south of the Korean Peninsula.

From previous experience, the Chinese people also know that the No.1 US ally in the Far East, Japan, might attack China if it strengthened its position in the Korean Peninsula.

In sum, China and the US have different visions for the future political development of the Korean Peninsula. China would like to maintain the DPRK’s stability, whereas the US attempts to weaken it by sanctions. If it finally crashes, the US wishes to change the regime and unite it with the ROK. By contrast, China attempts to limit its disagreements with the US and maintain peace in the Korean peninsula; however, China’s strategy is also to develop high-level political and economic relations with the ROK, connect the ROK’s economy with China’s economy and, as a result, weaken the US in the Korean Peninsula. This strategy may yield results, but the main obstacle is that the DPRK periodically takes provocative actions, including nuclear tests and ballistic missile launches. Thus, ROK leaders continue to see the US as the main guarantor of ROK security. As a result, the US maintains a military base in the Korean peninsula.

However, China and the US also have one common goal: to remove nuclear weapons from the Korean Peninsula and prevent a possible nuclear arms race in the Far East. The main reason for cooperation between the US and China is that the two superpowers oppose nuclear proliferation in the Korean Peninsula.

China-Russia Cooperation Regarding the DPRK’s Nuclear Issue

 In a broader sense, in the UNSC, Russian diplomacy regarding the DPRK’s nuclear issue entails finding solutions with China and subsequently negotiating with other partners. Russia attempts to use its influence on the DPRK to support the negotiation process. The main positions of Russia and China on the Korean nuclear issue match as both sides want to see the Korean Peninsula without nuclear weapons and the peaceful development of the DPRK.

The following question arises: What is uniting Beijing’s and Moscow’s positions on the DPRK nuclear issue in the UNSC?

  1. China and Russia are responsible powers that are interested in dismantling the DPRK’s nuclear arsenal. China is not interested in seeing its neighbors become new members of the “nuclear club”. Russia is also interested in maintaining the balance of power in the Korean Peninsula and Far East.
  2. The second reason for the Russian-Chinese united resistance against the DPRK’s nuclear tests is that that after the DPRK’s nuclear tests and missile launches, the US increased its military involvement in the Far East, arguing that it must protect the ROK and Japan from the DPRK threat, but in fact it is against China and Russia as well. The ROK and Japan subsequently began increasing their military potential in the Far East.

III. China and Russia are against the rhetoric of US politicians who emphasize the importance of changing the DPRK’s political regime. Any type of political instability in the Korean peninsula would deepen – not solve – the political crisis in the Far East. Russian and Chinese decision makers understand that if the US leads political changes in the DPRK, it would completely change the direction of Pyongyang’s foreign policy and that the country would move into the Western camp. These types of possible developments in the DPRK would limit Russia’s and China’s ability to maneuver in the Far East.

  1. In the UNSC, China and Russia have attempted to maintain stability and the balance of power in the Korean Peninsula. Concurrently, along with the other main players of the international community that were involved in the negotiations on the DPRK’s nuclear issue, they continue to press the DPRK to return to the negotiating table to discuss dismantling its nuclear arsenal. In the UNSC, Moscow and Beijing maintain pressure on the DPRK but only to the extent that its economic and political systems do not collapse.
  2. China and Russia continue to develop their economic relations with the DPRK, given the limitations of the UNSC sanctions. These economic relations provide an opportunity for the DPRK regime to maintain its political and economic systems. China’s investments and economic aid are the DPRK’s main guaranties of stability. As developments have shown, China and Russia can exert influence on the DPRK; however, regarding its nuclear policy, the DPRK has independently chosen its steps and listened to neither Beijing nor Moscow.
  3. China and Russia cooperate regarding the DPRK’s nuclear issue and do not let the US and its allies isolate and destroy the DPRK; on the other hand, when the Russian bear returned to Korean Peninsula, a hidden struggle would develop between Russia and China for influence in the DPRK. This would provide more room for the DPRK’s diplomats to maneuver between Russian and Chinese disagreements, as was the case during the Cold War, when the DPRK’s leaders were playing on disagreements between China and Russia.

VII. China and Russia are against US and ROK’s use of the DPRK actions as an excuse for deploying the THAAD missile defense system, as it could become a real security threat for both China and Russia.

Conclusion

From my perspective, the DPRK’s nuclear issue can be solved if the US, China, Russia, the ROK, and Japan can come to a united conclusion.

What type of policies do these 5 countries have?

The US has long attempted to find ways to change the DPRK’s political system or to disrupt the DPRK’s weak economy and receive concessions from Pyongyang. Japan, with some exceptions, has attempted to follow US policies. The ROK has tried to maintain economic relations with the DPRK, but at a low level. China, by contrast, continues its economic relations with the DPRK, given the limitations of the UNSC sanctions. Beijing has urged the DPRK leaders to implement Chinese-style economic reforms and continues to provide the DPRK with food aid. China therefore attempts to maintain influence in the DPRK to prevent unpredictable or dangerous steps by Pyongyang, but as past developments have shown, the

DPRK tries to play its own chess game and make decisions by itself. Russia has attempted to reestablish its influence in the DPRK, which was lost when the USSR collapsed. For this reason, Moscow wrote off the DPRK’s debt. Therefore, we have 5 players+ the DPRK, and every player attempts to play its own game. I believe that the DPRK also tries to gain from the disagreements of the above-mentioned global and regional powers (China, Russia, the US, the ROK and Japan). I believe these powers can agree from their side that nobody should separately or secretly sign an agreement with the DPRK. The powers can offer the DPRK support for developing its north regions, which border China, to prevent further immigration to China from the DPRK’s poorest regions. The 5 powers must announce that they have no intentions of changing the DPRK’s political system so that the DPRK does not need nuclear bombs to prevent such developments. I believe it is important to maintain an arms embargo and control the import and export of nuclear dual-use materials to the DPRK, but it is nonetheless possible to suspend heavy economic sanctions. These steps will provide the opportunity to build confidence among the negotiating parties and improve the DPRK’s economic situation, which in turn will give added impetus to stop the immigration of the DPRK’s citizens into China, which Beijing would like to prevent. The 5 powers can offer the DPRK a new roadmap for a final solution to its nuclear issue. The main idea can apply to that if the 5 powers help the DPRK join the global economic order, as a result it will be much easier to urge the DPRK’s decision makers to dismantle their nuclear arsenal. In this hypothetical scenario, the DPRK would have something to lose.


(*)Mher D. Sahakyan- Ph.D. 2016 (International Relations), School of International Studies, Nanjing University, China. Director of the “‘China-Eurasia’ Council for Political and Strategic Research” Foundation, Armenia and the author of the article CHINA’S POLICY ON THE DPRK’S NUCLEAR ISSUE: COOPERATION AND DISAGREEMENTS WITH THE US AND RUSSIA, (Moscow University Bulletin. Series 13. Oriental Studies, No. 1, 2017, pp. 39-55), from which this essay is adapted. Used by permission. All rights reserved.

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Chinese Communist Party and the path of “high-quality development” at Guangdong Province

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A night view of Shenzhen, Guangdong province, on March 10, 2018. (PHOTO / VCG)

During the meeting of “Huang Kunming”, Secretary of Guangdong Provincial Party Committee mentioned that it is significant for Guangdong embark on a path of high-quality development fit for its own situation. According to my highly understand of China’s high-quality development and analysis to the nature of the Chinese society and the polices of the Communist Party of China regarding the development is meaning (all-round building a strong modern socialist country) and all-round rejuvenation of the Chinese nation still need to rely on development.

 With the continuous development of the Chinese economy and the deepening of reforms, China put forward a new expression of “high-quality development” for the first time at the 19th National Congress of the Communist Party of China in 2017, which indicates that China’s economy has moved from a stage of rapid growth to a stage of high-quality development.

 Changing China’s economic development strategy is an inevitable choice in line with the law of development and the demands of its development. Now, China is seeking to change its previous development pattern of relying on a large number of factors of production to focus more on quality and efficiency.  It has begun to adhere to the implementation of the new development philosophy that emphasizes innovative, coordinated, green and open development for all, and to build a new development pattern that relies on domestic trade and promotes integration between domestic and foreign trade to enable the Chinese society to complete the building of a strong modern socialist country in an all-round way, Chinese side should stick to advancing high-quality development as the top priority, as President Comrade “Xi Jinping” stressed in the report.

 High-quality development mainly depends on the economy’s vitality, innovation and competitiveness.  In order to improve these capabilities, China is accelerating the implementation of the innovation-driven development strategy, intensifying its efforts to achieve a high level of self-reliance in scientific and technological research, mobilizing forces and focusing on solving intractable problems in original and pioneering science and technology research to achieve breakthroughs in some crucial and pivotal technologies, which are guided by these strategies, China has achieved good results in manned space industry, lunar and Mars sounding, deep-sea and land exploration, supercomputers, satellite navigation, quantum information, electro-nuclear technologies, large-scale passenger aircraft, medicine, biopharmaceuticals and other fields over the past years, and joined the ranks of innovative countries in the world.

 Green development is an important symbol of the transition of China’s economy from the stage of rapid growth to the stage of high-quality development. In recent years, China has pushed the green transition to a development mode, implemented the comprehensive rationalization strategy, developed green and low-carbon industries, and advocated green consumption.

  The bright future of China’s economy stems from more flexible and high-quality development. In 2021, China calmly responded to changes in the world as well as the COVID-19 epidemic, took new steps to build a new development pattern, achieve new results in high-quality development, and achieve a good start for the 14th Five-Year Plan. China has maintained a leading position in the world in economic development and in epidemic prevention and control, accelerated the growth of national strategic scientific and technological forces, improved the flexibility of the industrial chain, continued to deepen supply-side structural reforms, and made solid progress in the green transformation of the low-carbon economy and prosperity subscriber.

  Here, with the strong leadership of the Communist Party of China, the significant advantages of the socialist system with Chinese characteristics, the technological foundation accumulated since reform and opening up, the extremely large market advantage and domestic demand potential, and with huge human capital and human resources, the Chinese economy will continue to grow steadily on the path of high-quality development, enabling China to contribute in achieving a steady and stable progress in the recovery of the global economy.

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China’s Deflating Population: The Economic Marvel in Eclipse?

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So China’s population shrank last year. I admit my first instinct was … well, isn’t this a good thing? I mean, during the entire 1960s and 1970s, global discourse misted around how the world population kept growing beyond the finite resources of this world. And how food scarcity and poverty would create a social depression. China, with a population of roughly 1.4 billion people, was specifically a focal point of population reduction strategies. After the widespread catastrophe of the Great Leap Forward, a debilitating social program orchestrated by Mao Zedong in the late 50s, China’s population was on the up and up in the following decade, to the point that the infamous ‘One-Child Policy’ was introduced in the late 70s to inhibit the burden of a growing population – and concomitant poverty. Since then, however, China has dynamically transformed into an economic powerhouse – a factory floor for global manufacturing. And here lies the answer to this population conundrum: Shrinking population in China is a problem now!

According to the data released by the Chinese government last week, China’s population contracted by circa 850,000 people in 2022; with 9.56 million births against 10.41 million deaths, it was the first time in more than half a century that deaths outnumbered births in China. The initial thought would be to blame it on the pandemic. But that would be a blinkered assumption without gauging the stunted birth rate. It was the sixth consecutive year that the number of births fell, down from 10.6 million in 2021, according to the National Bureau of Statistics. Many demographers and statisticians warned for years about a population decline on the cards, albeit much later in this decade. This presage was why the government reposed its one-child policy in 2016 and extended the limit to three children in 2021. Local governments offered tax rebates and outright cash handouts to couples having children. The source of anxiety was partly social and partly economic – or maybe socioeconomic is the correct juxtaposition.

China is a rising economic power, the world’s second-largest economy, and the strongest contender to dethrone American supremacy. But in listing all the superlatives, we sometimes forget that China is still a developing economy. Despite its phenomenal evolution from endemic poverty, its average population still earns less than the average earnings in advanced economies. And the shrinking population is a two-pronged issue that could constrict China, like other leading developing economies, into a middle-income trap.

Just by simple inference, we can judge that a declining population is also an aging population. Impressive modernity in China’s healthcare system has led to an increase in life expectancy. Meanwhile, a decades-long hiatus in birth-conducive policies and changed mores of young Chinese couples, often antipathetic to having children altogether, have led to a sharp decline in births. A combination of these factors has invited a conspicuous outcome: Shrinkage in China’s working-age population. In fact, China’s working-age population has been in decline since 2015; according to a government spokesman, it could fall to roughly 700 million (approximately 23%) by 2050. This factor would be particularly problematic for China, which has long been a competitive labor market for manufacturing heavyweights like Apple and Microsoft. But moreover, a bulging elderly population amidst falling tax receipts would pose a challenge to government finances, especially given the comparably underdeveloped social safety net programs in China. Therefore, either taxes ought to be raised sharply or state pensions to old-age dependents would hit the skids – a spartan policy dilemma either way.

We can draw apt comparisons from Japan – the world’s third largest economy – which has notoriously suffered from a lopsided aging population and accompanying anemic economic growth since the asset bubble burst of the 1990s. I mean, China’s real estate market does look like a financial crisis just waiting to happen. But post-boom Japan has tried virtually every bizarre economic strategy – from negative interest rates to yield curve control – yet has failed to spark demand-led inflation. Strangely, however, China has sustained its bustling economy on prohibitive rates of investment rather than consumer demand, which has remained relatively lukewarm due to policymakers’ reluctance to pass the complete scope of economic growth to households. Nonetheless, a contracting labor force would perhaps accelerate the exodus of manufacturing from China unless the government finds alternatives to sustain China’s unrivaled productivity levels.

We could blame China’s ‘zero Covid’ policy for strangling economic growth. It is no surprise that China’s economy grew by a modest 3% in 2022, its slowest rate in nearly four decades, barring 2020. Intermittent lockdowns and pedantic mass testing regimes cast a pall over economic activities. And higher interest rates imposed by the Federal Reserve and other central banks have dampened global demand and diluted appetite for Chinese imports. According to government officials, year-on-year Chinese exports fell by 9.9% in December. While an economic turnaround is widely expected later this year, a falling working-age population; a skyward old-age dependency ratio; and the ongoing trade tussle with the United States could cost China many more decades to supersede the American edge. However, China has been an iridescent success story, an economic miracle of sorts. And therefore, if the Chinese Communist Party (CCP) could somehow prioritize economy over national security; social reforms over governmental control; and collaboration over confrontation, I reckon China can again defy the odds and achieve its dream.

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Nepal-China Relations and Belt and Road Initiative

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Image source: xinhua

China appears to be more “functional” in Nepal recently. A new administration led by leader Pushpa Kamal Dahal has acted on the same pitch initially also. The Rasuwagadhi border crossing, which had been blocked for three years, has been reopened for two-way trade, and the much-anticipated Gyorong-Kathmandu train project’s final survey has also begun as of January 1, 2023. The second phase of the 10-lane ring road project from Kalanki to Chabhil is anticipated to start soon as well. All these accumulatively demonstrate the current nature of friendship between them and the profound Belt and Road Initiative is the key rostrum for the current complexion of the relationship between them. Hence, the trends are indicating a greater form of cooperation even in the regional domain as well.

Meanwhile, China and Nepal have inked a six-point agreement to strengthen bilateral collaboration and exchanges on governance, legislation, and supervisory practices, in line with Beijing’s Belt and Road Initiative (BRI). On September 12, 2022, in Kathmandu’s federal parliament building, Agni Prasad Sapkota, Speaker of the Parliament, and Li Zhanshu, Chairman of the Standing Committee of the Chinese National People’s Congress, signed the agreement. According to the agreement, the nations would exchange information about each other’s legislative, oversight, and governance activities. Five years after BRI’s founding, on May 12, 2017, Nepal formally joined the process. Nine projects – the upgrading of the Rasuwagadhi-Kathmandu road, the construction of the Kimathanka-Hile road, the construction of the road from Dipayal to the Chinese border, the Tokha-Bidur Road, the Galchhi-Rasuwagadhi-Kerung400kv transmission line, the Kerung-Kathmandu rail, the 762MW Tamor Hydroelectricity Project, the 426MW Phuket Karnali were on the to do list. However, more than any other nation, China invested US$188 million in Nepal during the 2020–21 fiscal year. During KP Sharma Oli’s visit to Beijing in 2016, Nepal and China also ratified a transit transport agreement for commerce with other parties.

However, amidst the current global tension and the changing rapport of international politics, China remains as a key investor in Nepal. Besides, the recent activities from the Nepal administration showed a shift in policy domain from the previous regime which in some cases was rigid to Chinese projects. Meanwhile, the BRI becomes more eminent in the strategic, political and economic domain of the status quo. Against such backdrop, the next sections will discuss current trends of the BRI in Nepal.

Nine Projects: Token of Continuation of the Initiative

Nepal put forward nine potential projects to be undertaken under the BRI at the beginning of 2019. These included setting up a technical institution in Nepal, building new highways, tunnels, and hydroelectricity dams, as well as conducting a feasibility assessment for a trans-Himalayan railway that would connect Jilong/Keyrung, a Chinese port of entry, with Kathmandu. This enhanced the significance of the project which will direct to more prosperous China- Nepal relations.

Nepal, the “Pillar”

Hou Yanqi, the Chinese ambassador to Nepal, stated in April 2022 that Nepal was one of the BRI’s most significant pillars and that projects were still moving forward despite the “speed of pragmatic collaboration” slowing down because of the coronavirus pandemic and Nepal’s changing political climate.

Transit Through China: Better Connectivity and Trade

Kathmandu protocol agreement with Beijing, Nepal will import and export goods from a third country through China through Tianjin, Shenzhen, Lianyungang and Zhanjiang seaports and land ports of Lanzhou, Lhasa and Shigatse. They will also get the facility of transporting goods through six dedicated transit points of the two countries. It will boost the trade for improved connectivity.

Extended Cooperation in Domains Except for BRI

In addition to the BRI projects, China is currently making significant investments in Nepal’s infrastructure, including ring road expansion, dry ports at the border crossings of Larcha and Syabrubesi, the establishment of China Study Centers, a new international airport in Pokhara, and optical fiber cable connectivity from Kathmandu to the Chinese border.

Energy Exploration: New Domain of Cooperation

China is also looking into the prospect of discovering gas and oil deposits in Nepal and is building a border river crossing at Hilsa, Humla. It will open a new domain of cooperation based on mutual interest.

Poverty Reduction and Generating Newer Income Sources

Currently, roughly six Chinese airlines offer regular flights to Nepal. Nepal has the fastest-growing Chinese tourist industry. Nepal granted China access to choose 16 Himalayan regions that border China to develop as part of a program to fight poverty.

Security: Bringing Peace

Joint military drills between China and Nepal are also a new development in security cooperation. It will bring peace in the region since the image of Nepal is very clean.

Increased Diplomatic Connectivity

The BRI appears to be one of the three priority pillars for the Chinese government’s organizing principles of foreign policy, along with the Global Development Initiatives and the Global Security Initiatives, in terms of developing successful international relations rather than just an economic endeavor. It will bring a fresh start in the diplomatic domain of both countries and the future prospects of ties in the diplomatic arena can be discussed robustly.

No More Landlockedness

Under BRI and the Trans-Himalayan Multi-dimensional Connectivity Network, which will transform Nepal from a landlocked country to a land-linked one, there are multiple road, sea, and corridor networks throughout the world. It will boost the relationship to a great extent while there will be a surge in the arena of export and import.

Regional Connectivity

The extension of the Qingzang railway from Tibet to Nepal and the border with India is among the most significant BRI projects. Three routes are being considered for this railway. The first would connect Shigatse to Kathmandu via Kerung and continue on to Pokhara and Lumbini before reaching the Indian border. The second would run from Shigatse to the Burang border and connect Humla and Darchula districts in Nepal with Pithoragdh, Uttarakhand, while the third would link Shigatse to the Yandong border of Sikkim, India.

As China and India have no trade disputes with one another, India would gain from this project as well after trading through this route. In comparison to other industrialized parts of the world, South Asia could see an increase in commerce and investment if this project is carried out on a win-win basis between China and Nepal.

Challenges

Additionally, loans are typically provided on commercial terms through the Silk Road Fund and the Asian Infrastructure Investment Bank (AIIB), both of which are led by China (SRF). Due to project site clearance delays and the nation’s political instability, along with its comparatively short repayment time, Nepal’s big projects have raised concerns that they may not get off the ground.

Besides, three primary issues with China are of particular concern to the Nepalese government. First, instead of commercial loans, the nation favors grants and lenient loans from China. Second, it wants the interest rate and repayment period to be comparable to those of multilateral funding organizations like the Asian Development Bank and the World Bank. Thirdly, it thinks that bid competitions ought to be allowed for the BRI projects. But the Chinese authorities are not responding on the same page.

The Inception of a Recommenced Cooperation

Pradeep Gawali, Foreign Minister in the KP Sharma Oli’s government, said that from the perspective of Nepal, the BRI projects were the way to be connected to the trans-Himalayan multipurpose connectivity network. Nepal had been able to select the nine projects included in the BRI with great success. However, Chinese authority said on December 26 that it looks forward to cooperating with the new government to advance projects under the ambitious Belt and Road Initiative, a day after the Maoist party chairman Pushpa Kamal Dahal alias Prachanda was named as Nepal’s new prime minister (BRI). China aims to develop initiatives under the Belt and Road collaboration, according to Mao Ning, the official spokesperson for the Chinese foreign ministry, who congratulated Prachanda on his appointment. Beijing claims that as a longtime ally and neighbor of Nepal, China cherishes Nepali relations very highly. China is prepared to collaborate with the new Nepalese administration to broaden and deepen friendly relations and cooperation on all fronts, pursue high-quality Belt and Road cooperation, strategic cooperative alliance marked by enduring friendship for growth and prosperity new impetus, and bring more benefits to peoples from both sides.

Hence, it is evident that China’s policy toward Nepal is generally stable and uncomplicated, and the two countries’ bilateral relations have been cordial and shaped by Nepal’s strategy of balancing the divergent impact of China and its southern neighbor. Through BRI projects, Nepal could gain better connectivity relations with its northern neighbors, but in order to do so, Nepal must enhance its negotiations with China.

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