On August 15 Indian Ambassador to Nepal, Rakesh Sood, donated 20 ambulances and four school buses to various organisations in Nepal. Twelve days later, Qiu Guohong, the Chinese Ambassador to Nepal, donated 108 vehicles and four ambulances to Kathmandu municipal authorities.
It’s not a race among Nepal’s two powerful neighbours to donate vehicles. But it’s an indication of how China and India are now locked in an intense battle for one-upmanship in the Himalayan nation and how Beijing is slowly edging New Delhi out from its earlier exalted position. Chinese interests in Nepal
While India makes its interests in Nepal known, and is increasingly being viewed as a domineering neighbour meddling in Nepal’s policies and politics, China gives the impression of noninterference but manages to get its way most of the time. “China has been taking much greater interest in Nepal. They are becoming more visible and assertive in affecting India’s interests in Nepal,” K.V. Rajan, former Indian Ambassador to Nepal.
The political arena
Having played a role since in signing of the 2006 peace agreement and installation of the Madhav Kumar Nepal government in 2009—India is now at a crossroad where apart from Nepali Congress it doesn’t have any political ally in Nepal.
Despite brokering the peace accord in 2006, India in the past two years has increasingly grown wary of the Maoists, the largest party in parliament, and has tried various means to keep it from power. China on the other hand is making inroads into other parties like CPN-UML and the Madhesi parties from Terai while keeping warm its ties with the Maoists led by Pushpa Kamal Dahal.
The recent episode of a senior Maoist leader allegedly seeking money from a Chinese official to make Dahal the Prime Minister indicates China’s intention of having a ‘friendly government’ in power in Kathmandu.
“China’s activities have increased in Nepal and the recent episode involving the telephone conversation between a senior Maoist leader and an alleged Chinese official is highly objectionable and undesirable,” says Bimalenra Nidhi, general secretary of Nepali Congress.
The trade lines
Indian businesses in Nepal are affected by Chinese influence, with more contracts going to Chinese firms at the cost of Indian firm.
China’s core area of interest is the 83,000 MW untapped hydro-power potential of Nepal. Recently, the 456 MW Upper Tamakoshi Hydro Power Project was won by the Chinese after outbidding an Indian company.
“The increased influence of Chinese firms in getting projects is a cause of concern. The way their companies compete, it is difficult for our firms to outbid them,” said a senior Indian Embassy official.
Security and Tibetan refugees
India’s security concerns due to an open border with Nepal are also not getting addressed. The Nepal government is dilly-dallying on inking an extradition treaty and a contract to prepare machine readable passports that was given to an Indian government firm was later scrapped due to political pressure.
Instability and political impasse hasn’t however come in way of China pressuring Nepal to target nearly 20,000 Tibetan refugees in Nepal. In July, China pledged an annual assistance of $1.47 million to Nepal to curb anti-China activities by Tibetans in Nepal.
Nepal has failed to honour a gentleman’s agreement with UN to provide safe transit to Tibetans on way to India. Since the March 2008 uprising in Tibet, Chinese troops have stepped up patrol along the Sino-Nepal border with Nepali police. India has remained silent at instances of Chinese troops entering Nepali territory in search of Tibetans who try to flee to India.
India Image in nepal
The biggest loss for India may be its eroding image among the Nepali masses over the past years. New Delhi’s inability to maintain a smooth relationship with Nepali media houses which highlight each and every anti-India issue is one reason behind this setback.
Every issue where India is shown in a negative light gets scrutinised in the media microscope. But in contrast, China’s affairs in Nepal that are either never reported or get buried in inside pages. “Anti-India feeling in Nepal has reached unprecedented level and China is taking advantage of it. We need to do lot of introspection and handle affairs in a sensitive manner,” says Rajan.
Financial aid and investments by Chinese firms in infrastructure projects have have increased. China, now, has the third highest FDI in Nepal after India and USA.
But there are some who think that growing Chinese involvement should not be seen as a competition between Nepal’s powerful neighbours but as a possibility to boost the region’s economy. “China is getting more engaged in Nepal and in a globalised environment it is bound to grow. In the long run it would be beneficial for the region,” says Kanakmani Dixit, eminent Nepali journalist and editor of Himal magazine.