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The BRI In Nepal: China’s Outreach To The Himalayas – Analysis

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The Belt and Road Initiative (BRI) has become central to the economic relations between China and the rest of Eurasia. The infrastructure development has improved the connectivity of these regions and accelerated the engagement between China and other BRI recipient countries. 

Discussion on the BRI, however, has mostly focused on the continental and maritime BRI routes that pass through Central and Southeast Asia, and less attention has been given to the Tibetan plateau and the Himalayan region. Although rugged terrain complicates interaction across the mountains, the Himalaya constitutes a critical – and contested – border area between the region’s two population giants, China and India. If the BRI can improve the infrastructure and accessibility of this area, its strategic and economic importance in the South Asian region will likely prosper in the future as well.

In fact, China has been cultivating a close relationship with Nepal since the Nepal Earthquake of 2015, when Beijing offered aid to Kathmandu that revitalized damaged infrastructure in mountainous border areas. For instance, the Chinese and Nepali government signed an agreement during the Second Belt and Road Forum in May 2019 that committed new levels of aid for ongoing development of the Himalayan borderland area. These projects reflect a new phase of China-Nepal ties as an infrastructural relationship comprising cooperation in energy, transport, and security across the Himalayas and Tibetan Plateau.

In his lecture for the  research project “Infrastructures of Faith: Religious Mobilities on the Belt and Road” [BRINFAITH] at the Hong Kong Institute for the Humanities and Social Sciences, Dr. Galen Murton, Assistant Professor of Geographic Science at James Madison University, suggested three frameworks to understand Beijing and Kathmandu’s relations in the recent BRI discourse: national imaginaries, ethnographic anxieties, and geopolitical power. These three factors help to contextualize what propels the BRI in Nepal and how it may change the future of China-Nepal relations and South Asian regional politics more broadly.

National Imaginaries: Natural Disaster and Reconstruction

As a country located along the world’s highest mountain range, Nepal has long been affected by various geophysical disasters that frequently disrupt its economic development. In 2014, a landslide near the Sun Kosi River blocked the Friendship Highway, a key transit corridor that connects the Tibetan Autonomous Region in China with Nepal and has historically operated as the main trade route between the two states. The earthquakes in April and May 2015 also extensively damaged the country’s infrastructure and economy: 9,000 people were killed and more than a quarter of the Nepali population was affected by this disaster.

Infrastructure reconstruction to repair extensive damage from natural disasters became essential for maintaining the Nepali economy and society. In relation to its BRI strategy, Beijing helped Nepal rebuild infrastructures in multiple borderland areas. For example, due to damage from the landslide in the Friendship Highway, the Rasuwa-Kyirong Highway in central Nepal was inaugurated earlier than the original plan in October 2014, and it was transformed into a center of trade, tourism, and even Buddhist pilgrimage.

“This is a route that had been highly anticipated for years, if not decades. It was also the opening of a route in Nepal that had long been closed to foreign tourists as well as to other formalized official bilateral trade,” said Dr. Murton, “part of the reason for this, according to many people I’ve spoken with in Rasuwa, has to do with the Tibetan exile population living there, which is particularly sensitive in Nepali history.”

The earthquake in 2015 also accelerated the infrastructure collaborations between Nepal and China. Chinese development projects were implemented in the borderland areas, facilitating hydroelectric power generation and the development of additional borderland roads. In 2019, Larcha Dry Port and the damaged Friendship Highway in Eastern Nepal were also reopened with China’s aid.

“Some of these projects, but not all of them, are related to the BRI. There is a fuzziness sometimes about what is and what is not a BRI project,” said Dr. Murton, “much of that perhaps does not matter. What does matter is the way in which Chinese capacity for construction, earth removal, and development is mobilized in humanitarian and emergency response modalities. It furthered and deepened this unique relationship between Beijing and Kathmandu with respect to infrastructure and aid.”

The earthquake in 2015 also led to economic and social instability in Nepal. International relief aid was not effectively distributed to the Nepali population due to enduring inefficiencies within the government structure. More problematic has been the ongoing marginalization of ethnic minorities, such as the Madheshi population in the south, which in the post-disaster period led to social unrest against the Nepali government. Protests in the fall of 2015 led to a wintertime border blockade between Nepal and India. As Nepal relies heavily on India for its energy supplies, it resulted in a severe fuel crisis across the country. China, again, used this opportunity to assist Nepal to ‘Build Back Better,’ where it subsidized Nepal with 1,000 tons of fuel. 

“This led to a view, from Kathmandu and throughout Nepal, north towards China as a particular kind of friend, and India very much was not,” said Dr. Murton, “this kind of connectivity has been articulated and rearticulated in very important ways since that time.”

These responses to natural disasters show that the social and political turmoil that arose after natural disasters allowed China to use its humanitarian aid as a mechanism that pulled Nepal away from its economic dependence on India and promote active participation in the BRI. China’s aid contributed to improving the damaged infrastructure in the Nepali borderland, which, in return, rehabilitated the Nepali state which was suffering from economic and social unrest, and justified China to extend the BRI towards South Asia with Nepal’s favorable response.

Ethnographic Anxiety: Aid and Extraterritorial Policy

China’s influence in Nepal, including projects associated with the BRI, is also portrayed in its extraterritorial policy aiming at Tibetan populations. Traditionally, numerous ethnic minorities in Nepal, including Tamang communities in Rasuwa, had close cultural and religious ties with Tibet, in which Tibetan Buddhist practices and identities connected these minorities with Tibet. These ties had historically been deepened through trade and kinship interactions across the Himalayas.

Now, however, many ethnic minorities are experiencing additional anxiety as a consequence of BRI programs. Because China is increasing its leverage on Nepal through the BRI, Tibetan exiles as well as Indigenous groups living in borderland areas fear that these development projects may lead to the repetition of China’s suppression of ethnic Tibetans in the Tibet Autonomous Region.

“On the one hand, we see tremendous economic development and growth,” said Dr. Murton.  “On the other hand, there has been an extremely complicated human rights history and ethnic, religious, and linguistic persecution that have transformed Tibet.”

In fact, China utilized the aid and infrastructure development project to exert extraterritorial influence in BRI countries. This is visible in Mustang, one of Nepal’s Western borderland areas that historically maintained exceptionally close ties with Tibet. While China has been funding development projects in this region for well over a decade, such as solar electrification and the development of new dry ports, the area has also become highly securitized in the past few years. As a result, the age-old interactions between ethnic minorities in Nepal and Tibet are being interrupted, as it becomes difficult to practice cultural and religious interactions across these borders.

“There are many accounts by members of the Mustangi population of being arrested in this region on the Nepali side of the border by Chinese officials despite having committed no crimes or infractions,” said Dr. Murton, “it has really become an area off-limits to Nepali citizens of ethnically Tibetan heritage.”

Dr. Murton suggested that these ethnographic anxieties are intertwined with China’s increasing aid and FDI since 2014. China pledged $750 million to Nepal as relief aid for the earthquake in 2015. China also increased its FDI to Nepal, where by 2016, China accounted for over 60% of FDI to Nepal with $57 million. 

As a response, Nepal’s foreign policy has increasingly tilted in favor of China. The Beijing-Kathmandu Joint Statement in 2016 included both a reiteration of China’s One China policy and an extradition agreement over Tibetan exiles and refugees. Historically, Tibetan exiles and refugees from China passed through Nepal before settling in exile communities throughout India under an unofficial agreement with the United Nations. This de facto policy, however, was effectively nullified after the extradition agreement, under which Tibetan refugees are no longer allowed to pass through Nepal to seek exile in India. 

In the meantime, Nepal has also received promises of new aid packages and BRI infrastructure development, including a new railroad and electrical transmission lines; this has been framed as the Nepal-China Trans-Himalayan Multi-Dimensional Connectivity Network. 

“This ‘Handshake Across the Himalayas’ is growing ever firmer and ever closer,” said Dr. Murton. “New Delhi is no longer a close confidant and operator as it has historically been, but, in fact, it is now China.”

Through the extradition agreement, the Tibetan cultural and ethnic space in the borderland region of Nepal is transforming into a controlled area as China extends its extraterritorial policy, often in concert with infrastructure development. Kathmandu’s approach to Beijing also indicates that Nepal will no longer be dependent on its traditional economic and political partner – India.

Geopolitical Power – Establishing a ‘Power Corridor’ 

BRI projects in Nepal have not only domestic but also broader geopolitical effects that can shift Nepal’s foreign policy objectives from India to China. As mentioned above, China’s development aid has drawn Kathmandu closer to Beijing, and further away from India. 

According to Dr. Murton, China and Nepal’s transport and electricity network development project can be seen as the establishment of a power corridor. Not only is there an improved road network facilitating the movement of cargo but also a cluster of hydroelectric power generation facilities. For instance, numerous Chinese-funded hydroelectric power projects are being constructed or in operation along the Rasuwa-Kyirong Highway. 

As seen in the fuel crisis in 2015, energy supplies are essential for the national economy, especially for a landlocked country like Nepal without access to a global maritime trade route. What is visible in the connectivity network between Nepal and China, for example, is the construction of power supplies that can overturn India’s virtual monopoly over Nepal’s fuel economy. As a consequence of BRI projects, India’s role has been challenged, which may cause a strategic reorientation of the geopolitical power balance in South Asia. 

“If these roadways and power corridors can be activated, there is a much larger market further south in the Indian state and the broader subcontinent,” said Dr. Murton, “Nepal can potentially become a transit base here.” 

In recent years, China-Nepal geopolitical relations have increasingly transformed into a uniquely infrastructural relationship. Partly fueled by BRI agreements, Nepal has rehabilitated its damaged economy; meanwhile, Beijing continues to extend its economic and security interest abroad, including preventing Tibetan ethnic minorities’ exile to India through Nepal. These Chinese influences over Nepal through infrastructural relations have pulled Kathmandu away from New Delhi and prioritized its foreign policy vis-à-vis Beijing. Although Nepal is a relatively small and less-developed state, the BRI illustrates how infrastructure development projects can introduce new political values to a state’s foreign policy and help to shift regional geopolitical dynamics.

The Future of the BRI in Nepal

As discussed above, BRI dynamics in Nepal suggest three implications on the China-Nepal relations and the regional balance of power in South Asia. Firstly, natural disasters accelerated Nepal’s economic dependence with China. China’s petroleum aid to Nepal in the 2015 fuel crisis signified the possibility of China to break India’s monopoly over Nepal’s energy supply. 

Secondly, Nepal’s lean towards China is also seen in its trade with China. After the construction of transport infrastructure funded by China, the increased accessibility mobilized smoother interaction between the two countries. Before the BRI investments, Nepal was dependent on  Indian ports, through which two-thirds of its goods had to pass. However, the opening of the Rasuwa-Kyirong Highway not only resolved the road blockade in the Friendship Highway but also introduced a new scale of the relationship between China and Nepal, mitigating Nepal’s reliance on India. Chinese FDI to Nepal also surpassed that of India the same year as the opening of this route. If these trends of Nepal’s reliance on China escalate in the future, China will expand its foothold toward South Asia, while Nepal can benefit from the trade and reduce its dependency on India.

Thirdly, when considering the recent Quadrilateral Security dialogue between the US, Australia, Japan, and India – known as the ‘Quad’ – and the Sino-India border dispute, the US-China competition may also spread to the Himalayas; indeed, this is already the case with debates surrounding the infrastructural politics of the US-led Millennium Challenge Corporation in Nepal. Although the ‘Quad’ is more focused on maritime security and Nepal is at some distance from these international power politics, South Asian regional security may turn into a political, economic, and even military competition between China and India. China would seek to expand towards the Indian Ocean through the BRI to assert its strategic and economic interest, while the US would rely on India to balance against China’s expansion in South Asia. 

Thus, India might attempt to prevent its neighbors from leaning towards China, while China will accelerate its infrastructural relations. As Nepal has historically relied on India, but has recently increased its infrastructure cooperation with China, both India and China are competing over Nepal to assert their influence over the Himalayas. As a response to China’s BRI in Nepal, India has also implemented its ‘Neighborhood-first Policy,’ which included financial assistance and reconstruction projects after the 2015 Nepal earthquakes – similar to China’s BRI. Nepal also has closer cultural and linguistic ties with India, which poses more advantages for India than China. 

These future implications indicate that Nepal, despite its relatively small size and landlocked geography, is truly a strategically significant actor in the South Asian region. Although Nepal is a weaker military or economic power than its neighbors, if China’s BRI investments in Nepal accelerate in the future, it will likely become an even more important arena of competition between China and India. The three areas – natural disaster reconstruction, ethnic minorities, and geopolitical power – will continue to define Nepal’s relations with China, and the South Asian region may see changes in its historical power distribution.

*About the author: Seong Hyeon Choi studied a Master of International Public Affairs at the University of Hong Kong and is currently working as an intern for ASIAR- Asian Religious Connections, a research cluster under the Hong Kong Institute for the Humanities and Social Sciences at the University of Hong Kong.

Recommended/Further Readings List

(recent blog post on China in Nepal by Galen Murton and Austin Lord)

https://www.buzzsprout.com/196316/3457468-28-trans-himalayan-power-corridors-a-grounded-analysis-of-nepal-china-relations-dr-galen-murton

(2020 Trans-Himalayan Power Corridors podcast with Galen Murton)

https://munkschool.utoronto.ca/beltandroad/blog/

(BRI blog at University of Toronto, new post coming early July 2021 by Galen Murton)

https://www.tandfonline.com/doi/abs/10.1080/14650045.2018.1533818?journalCode=fgeo20

(2020 article in Geopolitics on related topics to this article)

https://onlinelibrary.wiley.com/doi/abs/10.1111/dech.12603

(2020 article in Development and Change on related topics to this article)

https://www.recordnepal.com/nepal-rasuwagadhi-road-to-china

(2018 article by Sam Cowan on Nepal’s roads to China)

https://scholar.google.com/citations?user=uKp1JQ0AAAAJ&hl=en

(The first 5-6 articles on Dr. Murton’s Google Scholar page all relate to this article as well)

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