India-China-Nepal Relations: Economic Opportunities and Connectivity Challenges
On August 12, 2020, Dr. Geeta Kochhar Jaiswal organized an international webinar on India-
China-Nepal Relations: Economic Opportunities and Connectivity Challenges under the auspices of
NIICE and Creat Foundation Trust. There were 14 speakers from India, China and Nepal in total.
The webinar covered various aspects of the relationship including economic ties, challenges of
development, ecological issues for various projects, connectivity and linkages, cultural impediments
etc. apart from dwelling on the larger geopolitics and theories of hegemony.
In the opening panel, Ambassador Shambuhu Ram Simkhada focused on India-China relations,
especially as the tensions are brewing on the border, and related it to implications on and choices
for Nepal. He stated that both India and China are rising and are striving to get their rightful place in
the world order. However, he pondered on whether the two leaders PM Modi and President Xi
Jinping can rise above the present border issue or not. He pointed out that the leaders need to
liberate their minds, be creative and have grand ideas, as ideas can create a good future, but can also
destroy future. He showed positivity that the leaders of two rising powers have very good ideas like
win-win relationship, shared future, or “Sabka Sath Sabka Vikas” etc. but these need to be
materialised. In his perspective, a war between India and China is not probable; rather even
unthinkable. On an optimistic note, he stated that If European Union can build connectivities and
engage with each other after years of bloody wars, then why can’t India and China rise above their
bilateral border issues. He further highlighted that the US is currently pursuing regional hegemony
and not letting other powers to rise. It is ‘America First’ policy that is preventing the rise of other
powers. India will have to choose sides. In this geopolitical matrix, Nepal is facing the ‘Paradox of
proximity’. He argued against the ‘equi-distance’ policy of Nepal and advocated “Swabhavik
Sambandh” (Natural relationship), which can help Nepal turn the geographic proximity to ‘Reward
Dr. Huang Zhengduo, Director of Nepal Study Centre in Sichuan University, talked about China-
Nepal relations. Presenting various statistical figures, he pointed out that China’s trade with many
South Asian countries like Pakistan, Bangladesh, Srilanka etc. far exceeds China-Nepal trade. He
said that the low level of trade shows that there is greater potential to expand trade volume, though
Nepal has certain concerns over trade deficit. He also pointed out various Chinese projects in Nepal,
especially industrial parks and infrastructure projects under the Belt and Road initiative.
Maj. Gen. (Retd.) Vinaya Chandran looked into the Importance of Nepal in China’s Foreign
Policy. He stated that China wants to engage Nepal in order to get close to India. Historically, China
treated Nepal as a barbarian state, but in the contemporary times, China looks at Nepal as a transit
route to South Asia. He suggested that Nepal can become a ‘strategic buffer zone’ between India
Mr. Zou Zhengxin from Sichuan University talked about the India-China-Nepal economic
Corridor as well as the sub-regional cooperation. He stressed on Chinese President Xi Jinping’s 2+1
model of relationship between the three states, stating that in order to have economic engagement
among the three states, there has to be trilateral negotiations. He said, China is looking at
development plans for Nepal and it is learning by doing.
Dr. Bawa Singh and Dr. Rajesh Kumar argued over the larger geopolitical scenario, focusing on
the notions of hegemony that is linked to big powers and China’s posture in the changing global
order. They stressed that China needs to positively look at India’s rise and not confront India. They
even pointed out that with the assertive posture of China, it has not only lost the support of many
states in the world, but has antagonised a strong neighbour, which has an expanding potential
market. Balasubramanian C. also argued on similar lines, stressing on China’s ambitions for the
Dr. Gaurav Bhattarai from Tribhuvan University argued on the ‘connectivity driven strategy’ of
Nepal as an imperative need for Nepal’s development. He pointed out that there were certain direct
bus route connections from Nepal to Tibet, but they were stopped by China due to security
concerns. He said that cross-border connectivity projects with India are much easy and cost-
effective than with China, where free flow of population is the biggest hinderance. Ms. Hindu
Sanskriti Karki looked on connectivity projects from a theoretical framework, arguing that
‘survival’ is no more a factor for states, especially Nepal to engage with other powers. There are
many platforms like the multilateral institutions that can provide balance for Nepal. She stressed
that the fear and threat from China is exaggerated; while China offers many opportunities.
Prof. Yin Xinan form Sichuan university was very pessimistic about the cultural connections
between the three states. He stated that in order to boost cultural ties, the first step is to promote
Sanskrit both in China and in Nepal, as that was also the basis of Buddhism. Second, research on
Buddhism should be developed. He further argued that there needs to be a cultural and linguistic
dialogue between the states. He proposed to establish a trilateral fund to encourage students
exchanges and undertake research work.
Dr. Shree Govind Shah gave an elaboration of Indian and Chinese projects in Nepal and
highlighted that most of the projects overlook the environmental costs and ecological impact. He
said that Nepal needs to focus on development, but learning from the experience of other countries,
Nepal should be cautious about the destruction of ecological balance while seeking development.
He argued that China-Nepal Railway project is not feasible and the costs will be too high. In
addition, he looked at the seismic challenges that can have devastating affect on Nepal if some of
the projects are undertaken without due consideration.
Prof. Shen Dingli, was very stark in his views. He highlighted two main factors in contemporary
relationship. One, infrastructure development is not for free. He said that in 1940s, US spent 12
billions USD as free gift to other countries, the reason for its goodwill. However, Indian and
Chinese projects in Nepal are commercial projects that are based on interest and not for free. China
has many projects in Nepal and invested huge sums, but nothing is for free or as a gift. Chinese
State-owned enterprises spend huge sums, at times even by loosing huge sums, as their CEOs know
that they will not be held accountable; rather because of Chinese political system, pleasing the
leader (read President Xi) is important.
The second factor, in his view, is the geo-strategic interests. India thinks of becoming prosperous
and secure, but that does not let China happy. He believes that the Chinese have cold war mentality.
China tries to compete with India in Pakistan, Bangladesh, Maldives and now even in Nepal. Some
Indians also think the same way. He said it is wrong to posit that by building CPEC, China-Pakistan
relations will improve; rather they will deteriorate, as the opposition forces in Pakistan will be
against China. The ruling party may take money and allow infrastructure projects, but then the
change in regime will brew anti-China sentiments. In his view this is similar is case of Nepal, which
have a ruling government pro-China as of now. However, when the burden of cost of projects will
pinch Nepal’s economy that will be unable to repay and fall in debt-burden, the anti-China
sentiments will rise. Srilanka is a case in point in his view where China-Srilanka relations have been
influenced due to this debt-burden. He suggested that in Nepal there should be all party discussion
and referendum for projects under BRI of China. China should encourage this and not invest in
projects just to compete with India or undermine India. He further argues that both India and China
should build greater understanding between them, especially if China wants to undertake projects in
neighboring states like Nepal. India can do in similar ways and in specific should have all party
consultation sin Nepal; rather than discussions with just pro-India parties.
In his opinion, India and China have no space for vicious way to compete with each other; rather
should have greater transparency. China should undertake economic projects in neighboring states
and not strategic interference. He stated that the current strategy of China is deeply fraud. China
may not be vicious, but it acts in ways that prove China is vicious. He further pointed out that US
and China are competing everywhere, which is why US is very suspicious about China. If US gains
one overseas space, China wants ten.
On Galway valley incident, Prof. Shen made an humble apologize towards India and requested
India to forgive China. He appealed to demilitarize the border area and establish ‘Buffer zone’.
Dr. Geeta Kochhar Jaiswal
Assistant Professor, JNU
China Fudan FDDI Ambassador in