China exploits venality of corrupt regimes to make inroads in institutionally weak countries

Chinese Ambassador to Nepal Ms. Hou Yanqi with Prime Minister of Nepal K. P. Sharma Oli. (Photo courtesy: Chinese Embassy, Nepal)

(, Jul13’20) – China’s modus Operandi for making inroads into institutionally weak nations, whether in Asia, Africa or Latin America, has been to strike deals with corrupt heads of state, Nepal being a case in point, according to a Global Watch Analysis report seen posted on its website Jul 13. This enables Chinese companies to not only further their business interests in that country but also the Chinese State to surreptitiously penetrate the nation’s polity, with the objective to ensure its long-term influence, says the report’s author Roland Jacquard.

Calling Nepal an emergent classic example of this Chinese machination, the report said the ruling Nepal Communist Party, led by Prime Minister KP Sharma Oli, has been seen to blatantly advance Chinese interests, to the extent that it has made many senior members of his party uncomfortable.

During his first stint as Prime Minister over 2015-16, Oli was reported to have been helped by Beijing through its ambassador in Kathmandu and the top Chinese diplomat in Phnom Penh to invest in the telecommunication sector in Cambodia.

In his second term since 2018, Oli was stated to have circumvented government regulations to award projects to Chinese companies in return for kickbacks.

In Dec 2018, China Communication Service, an agent of Chinese telecom company Huawei, was given a contract to set up a ‘Digital Action Room’ with video conferencing facilities in the Prime Minister’s office without a competitive bid, even though the government-owned Nepal Telecommunication had the expertise to create this facility.

In the same way, in May 2019, Nepal Telecommunication signed an agreement with Hong Kong-based China Communication Service for developing radio access network and another with China’s telecom equipment manufacturer ZTE for installing the core 4G network for Nepal Telecommunication for around Nepalese Rupees (NR) 19 billion or around Euro 130 million.

Oli was also stated to have overturned the decision of his predecessor Sher Bahadur Deuba to not award the US Dollar 2.42 billion contract for the 1200 MW Budhigandaki Hydropower project, the largest in the country, to the Chinese State-owned China Gezhouba Group Company due to irregularities.

Oli’s personal wealth was reported to have increased manifold over the last few years, including with an account in the Geneva branch of Mirabaud Bank with a deposit of around US Dollar 5.5 million in options that are believed to yield a healthy return of half a million dollars annually.

While China steadily makes inroads into Nepal, this rampant corruption offers a “win-win” situation for Oli and his Chinese benefactors, the report concludes.


Please enter your comment!
Please enter your name here