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Nepal and China Identify 10 Projects for Execution Under BRI
They signed a BRI framework cooperation agreement during Nepali PM Oli’s visit to China. Will that speed up implementation?

Birat Anupam
By Birat Anupam
December 06, 2024
https://thediplomat.com/2024/12/nepal-and-china-identify-10-projects-for-execution-under-bri/

Nepal and China Identify 10 Projects for Execution Under BRI
Nepali Prime Minister KP Sharma Oli and Chinese President Xi Jinping shake hands ahead of their meeting during Oli’s visit to Beijing, China, Dec. 3, 2024.

Credit: X/MOFA of Nepal
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Over seven and a half years after Nepal and China signed the Memorandum of Understanding on the Belt and Road Initiative (BRI), the two countries signed the “Framework for Belt and Road Cooperation” on December 4 during the four-day visit of Nepali Prime Minister K.P. Sharma Oli to China.

Despite joining the BRI in 2017, no related project has materialized so far in Nepal. This has been an important irritant in Sino-Nepali relations. That could change if the two countries begin implementing the new BRI framework cooperation agreement, but difficult negotiations lie ahead.

Oli’s recently concluded visit to China is his first bilateral official visit abroad since taking office. The weeks preceding the visit were marked by much debate and discussion in Nepal over whether his visit to Beijing would materialize and, if it did, whether it would have any tangible outcome. Importantly, would Oli’s Communist Party of Nepal-United Marxist Leninist and Sher Bahadur Deuba’s Nepali Congress, which are partners in Nepal’s coalition government, overcome their differences on the BRI ahead of Oli’s visit to China?

Some doubts were laid to rest with Nepal’s Acting Foreign Secretary Amrit Bahadur Rai and Liu Sushe, deputy head of China’s National Development and Reform Commission, signing the Framework for Belt and Road Cooperation agreement.

Ten projects have been identified by Nepal for execution under the BRI: the Tokha-Chhahare tunnel road, Hilsa-Simikot road project, Kimathanka-Khandbari road and bridge, Jilong-Kerung-Kathmandu cross-border railway, Amargadhi City Hall in Dadeldhura, Jilong-Kerung-Rasuwagadhi-Chilime 220KV transmission line, Madan Bhandari University, Kathmandu Scientific Centre and Science Museum, China-Nepal Friendship Industrial Park in Damak, and Jhapa Sports and Athletic Complex.

Two of these projects, the Jhapa Sports and Athletics Complex and the China-Nepal Friendship Industrial Park will be located in Jhapa, Oli’s electoral constituency, while the Amargarhi City Hall at Dadeldhura is in Foreign Minister Arzu Deuba Rana’s constituency.

As of December 3, it seemed that Nepal and China had not reached agreement on any BRI projects. Neither the nine-deal MoU nor the 12-point joint statement that were announced that day mentioned any BRI-specific projects. All that the joint statement mentioned with regard to the BRI was that “The two sides expressed their readiness to sign the MoU on building the Trans-Himalayan Multi-Dimensional Connectivity Network and the Framework for Belt and Road Cooperation between the two Governments as soon as possible.”

This triggered debate in the Nepali media and social media over the future of China-Nepal BRI cooperation.

It appears that differences between Nepal and China on the question of project financing delayed the framework cooperation agreement. Nepal had insisted on grants as the project financing model. However, the Chinese were not agreeable and insisted on replacing the word “grants” in the document with “assistance financing.” Intense negotiations followed. The two sides eventually agreed on the term “aid assistance financing,” paving the way for the agreement’s signing on Wednesday.

Oli, who has strongly championed the BRI, had faced challenges from the Nepali Congress on the question of project financing. NC leaders have opposed loans. “We are already over-burdened by various multi-lateral and bilateral loans taken in the past, so we cannot opt for a new loan in the name of development assistance,” NC leader and former Foreign Minister Prakash Sharan Mahat said.

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After weeks of negotiations, the CPN-UML and NC reached a compromise. It was only a day before Oli flew to Beijing that the two parties reached agreement on a “Framework on BRI Cooperation.” The NC leaders had urged Oli to accept only grants-financed BRI projects.  Former Foreign Minister Pradeep Kumar Gyawali, an influential leader of the ruling CPN-UML, told The Diplomat that the framework agreement between the NC and CPN-UML, Nepal’s two largest parties, is a “historic collaboration on foreign policy.”

If the 2017 BRI agreement was signed during the NC-Maoist coalition government, the latest agreement has been signed between new coalition partners, the NC and CPN-UML. Finally, Nepal’s three major political parties — the NC, CPN-UML and CPN-Maoist Center — are on the same page about the BRI.

Besides grant schemes, Kathmandu has prioritized concessional loans similar to that of multilateral banking institutions like the World Bank, Asian Development Bank, Asian Infrastructure Investment Bank, among others to fund BRI projects in Nepal.

Nepal will have to sort out the knotty issue of regional geopolitics, which has been another reason for the slow progress in Nepal’s BRI implementation. India is not part of China’s BRI and some Indian media outlets are visibly not happy with the latest BRI agreement. Historically, India doesn’t feel comfortable with Nepal’s northern outreach.

It may be recalled that when Nepal and China agreed to open the first trans-Himalayan highway from Tibet to Kathmandu, India’s first Prime Minister Jawaharlal Nehru voiced his concern in the Rajya Sabha, India’s upper house of Parliament. On December 11, 1961, Nehru said, “We didn’t like it [the road]; it opened out possibilities which were not desirable, apart from everything else, from the point of view of smuggling goods from India via Nepal to Tibet.”

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This sentiment reflects India’s security concerns and is visible in New Delhi’s current approach too. Although India pursues a “multi-alignment” foreign policy, marking a departure from its previous position of “non-alignment,” and India is part of groupings like the Shanghai Cooperation Organization, BRICS and AIIB that include China, New Delhi opposes Nepal working with China.

Given the important role that India plays in Nepal’s economy, it is imperative that Nepal is more transparent with India on the question of cooperation with China. It will require Nepali leaders to take the Indian leadership into confidence on issues and projects that have a bearing on India’s security. During the Cold War, for example, the U.S. and the Soviet Union agreed to build some sections of Nepal’s first countrywide highway, the Mahendra Highway.

While several of the projects Nepal has proposed are achievable, mega projects will require enormous investment that may be challenging for a small economy like Nepal’s. The fate of such projects hinges on future financial negotiations. Is Nepal up to the challenge?

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Authors
Birat Anupam


China and Nepal sign agreement to advance Belt and Road Initiative
Nepal envisions BRI projects in the country to work as a bridge between India and China, the world’s two most populous states

December 05, 2024 by Abdul Rahman
https://peoplesdispatch.org/2024/12/05/china-and-nepal-sign-agreement-to-advance-belt-and-road-initiative/

Nepal's Prime Minister K P Sharma Oli meets with Chinese President Xi Jinping (Photo: K P Sharma Oli via X)
Nepal and China signed a framework agreement for the Belt and Road Initiative on Wednesday, December 4, advancing the level of their economic cooperation and strengthening ties between the two nations. 

Both the countries signed the agreement on the third day of Nepal’s Prime Minister K P Sharma Oli’s four day visit to China. During his visit, Oli met with Chinese president Xi Jinping, Chinese premier Li Qiang, and visited Peking University.

Nepal had originally signed the BRI in 2017. However, most of the projects conceptualized under the ambitious scheme were not operationalized in the country. Both the Chinese and Nepali governments now claim that they have shorted the differences and bottlenecks.  

China’s trip was Oli’s first foreign trip after becoming prime minister of Nepal for the fourth time. This broke a long term convention of Nepalese prime ministers going to India on their first foreign trip. The move has created speculations about Nepal’s changing orientation in India, and its alleged attempts to get closer to China. 

However, both China and Nepal have maintained that their mutual relationship does not impact any third country negatively. It is particularly so when China and India, after almost five years of tensions at their borders, agreed to restart diplomatic engagements afresh last month. 

On Wednesday, Oli also addressed the China-Nepal business summit, expressing hopes of increased Chinese investments in Nepal and an increase in mutual trade. China is Nepal’s second largest trading partner after India, with close to USD 2 billion in annual trade. Experts say there is an increase in the volume of trade between both countries. 

On Tuesday, during his meeting with Oli, Chinese President Xi said that China places Nepal in a very important position. China is working to consolidate its relations with Nepal and hoping to “push for new progress in advancing the China-Nepal strategic partnership of cooperation featuring ever-lasting friendship for development and prosperity,” the Global Times reported. 

Cooperation on multilateral forums 
Xi, while noting that both countries will celebrate 70 years since the establishment of their diplomatic relations next year, also emphasized strengthening coordination with Nepal on multilateral platforms such as the UN, as a way to defend the common interests of both countries and to resist hegemonic pushback by certain countries in China’s pursuit of a multipolar world.  

During his visit to Peking University, Oli acknowledged China’s support in Nepal’s economic development, also calling the BRI a vision for “shared prosperity and win-win cooperation.” He hoped that both the countries “can envision a future of shared prosperity and enduring friendship, inspired by mutual respect and the pursuit of a better world for all.”   

Both countries issued a joint statement on Tuesday, which reiterated the Nepalese support of the “one China policy,” with Taiwan being an integral part of China. China expressed its full support of Nepalese sovereignty and territorial integrity, in return promising enhanced cooperation in the fields of mutual development.   

The joint statement spoke about both the countries being firmly committed to “Trans Himalayan Multi-Dimensional Connectivity Network,” with a chain of ports, roads, railways, aviation, power grids and telecommunication “to help Nepal transform from a land-locked country to a land-linked country.” 

Talking to CGTN, former prime minister of Nepal Jhala Nath Khanal expressed hope that if the BRI projects are well implemented, Nepal can become a link between India and China, the world’s two most populous countries.

Khanal also noted that the Chinese approach to world relations expressed through Global Development Initiative (GDI), Global Security Initiative (GSI) and Global Civilization Initiative (GCI) stands completely opposed to the western attempts of domination and exploitation of the third world. China is using its economic and political potential to push the developing countries to become more and more independent, he said.  


China weighs risks as social unrest rocks strategic partner Nepal
Regional instability, political upheaval test China’s Belt and Road Initiative, casting uncertainty over key infrastructure projects

https://www.scmp.com/news/china/diplomacy/article/3325088/beijing-weighs-risks-social-unrest-rocks-strategic-partner-nepal

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Further Reading
Nepal’s Gen Z accuse people with political agendas for chaos in capital
China seeks to boost trans-Himalayan project amid contest to win over Nepal
Nepal railway in focus as China pledges to boost connectivity


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A protester prepares to burn a picture of Nepal’s former prime minister while storming the Singha Durbar palace in Kathmandu on Monday. Observers warn that Beijing should prepare for further instability among neighbouring Asian nations. Photo: EPA
Zhao Ziwen
Published: 10:44pm, 10 Sep 2025Updated: 10:33am, 11 Sep 2025
China is closely monitoring social unrest in Nepal, a strategic partner and key point in Beijing’s global infrastructure and investment initiative, following the resignation of prime minister K.P. Sharma Oli.
Observers warned that Beijing should be prepared for further instability in the region, citing weak governance and potential external influence in political transitions.

The unrest was initially triggered by a social media ban last week, and soon grew into a wider anti-corruption movement aimed at the country’s decade-long governing establishment on Monday.




Just days earlier, Oli had made a high-profile trip to China, holding talks with President Xi Jinping and attending the Shanghai Cooperation Organisation (SCO) summit before watching the Victory Day military parade in Beijing.
“Oli has relatively close relations with China, so I believe this will certainly attract greater attention from China,” said Lin Minwang, professor and vice dean at the Institute of International Studies at Fudan University.

Chinese foreign ministry spokesman Lin Jian said on Wednesday afternoon that China hoped all sectors in Nepal could “properly handle domestic issues and restore social order and national stability as soon as possible”.


Nepal’s ‘Gen Z’ revolt sparks PM resignation following deadly anti-corruption protests
“China always hopes that neighbouring countries will maintain stability and development, which serves the interests of regional countries and meets the expectations of the international community.”

Nepal joined China’s Belt and Road Initiative in 2017 but progress has been slow. The key project, the proposed Rasuwagadhi-Kathmandu Rail Line connecting Jilong in southern Tibet with Kathmandu, remains in preliminary planning.
A wave of social unrest also gripped Indonesia late last month, forcing President Prabowo Subianto to cancel his SCO plans. Prabowo made a one-day trip to Beijing for the same military parade, when Xi reaffirmed support for Jakarta’s governance.

Similar social unrest played out in Bangladesh last year, forcing prime minister Sheikh Hasina to resign and flee the country by helicopter. In Sri Lanka, protesters stormed the president’s residence, prompting former president Gotabaya Rajapaksa to flee the country.

Liu Zongyi, a senior fellow and director of the Centre for South Asia Studies at the Shanghai Institutes for International Studies, said the unrest could affect the belt and road plan but activity may pick up later.

“During periods of turmoil, there will certainly be an impact on the Belt and Road Initiative. However, after the turmoil, if their development and prosperity issues cannot be resolved, only China’s Belt and Road Initiative can help them address problems such as having enough to eat and living better lives,” Liu said.

It remained unclear whether there was an “unknown power” behind the social unrest, but it was ultimately those Asian countries that provided the “soil” for unrest, he said.

Liu said that poor governance, economic problems and “international border background” – a reference to the US trade war – had contributed to the turmoil.

Zhang Jiadong, director of the South Asian Studies Centre at Fudan University, said the social unrest in Nepal was part of the new internal order in South Asia, where “public awakening, economic difficulties and the rise of social media have collectively driven political changes in the region”, adding that he urged Beijing to “pay attention”.

Lin, from Fudan University, said South Asian governments remained fragile as civil society was relatively developed, but state institutions were still weak, leaving them prone to frequent political turmoil.

While the protests have targeted the countries’ establishments, they have revealed little direct hostility towards Beijing, which has actively engaged with each new government after political changes.

For instance, Anura Kumara Dissanayake, the Sri Lankan president, was elected last year as a left-leaning anti-establishment figure following the Sri Lankan protests. He has maintained close relations with Beijing, like the previous leaders. China has also welcomed his government.
Chinese President Xi Jinping (right) shakes hands with Bangladeshi interim government chief adviser, Muhammad Yunus, during their meeting in Beijing in March. Photo: EPA-EFE
Chinese President Xi Jinping (right) shakes hands with Bangladeshi interim government chief adviser, Muhammad Yunus, during their meeting in Beijing in March. Photo: EPA-EFE
In late March, the head of the interim government of Bangladesh, Muhammad Yunus, travelled to China for a four-day official visit. During his trip, he met with Xi to discuss strategic bilateral issues, trade and investment.
Alfred Wu, an associate professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, said China’s Great Firewall, powerful online censorship and tightly controlled propaganda platforms shield Beijing from the repercussions of the large-scale protests and regime changes in its neighbours, but there were still lessons for China’s leadership.
“Beijing, just like any other government in the world, will need to have regular reality checks on the ground, find ways to meet people’s expectations and defuse public dissatisfaction as early as possible and fight corruption as harshly as possible. It can just look around to see what will happen if you fail to address people’s needs.”

Amit Ranjan, a research fellow with the National University of Singapore’s Institute of South Asian Studies, suggested that Beijing actively engage with new governments.

“Whether it’s China or other nations, we must understand that we have to deal with the new leaders. These new leaders may not be as sincere and approachable as their predecessors, but we have no other choice,” he said.

“They are there to build their state. They are part of the state, so [we] have to be with those leaders. We don’t have other options.”

Additional reporting by William Zheng





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