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Nepal’s BRI loan rejection, Dalai Lama-devotion among its people behind China’s border port fickle-mindedness?

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(TibetanReview.net, Sep02’22) – Nepal’s refusal to yield to China’s commercial loan offer on its Belt and Road Initiative (BRI) projects in the country and the Nepali public’s display of devotion to HH the Dalai Lama, Tibet’s exiled spiritual leader, are seen as two major possible reasons why Beijing is playing fickle-minded on keeping the two border crossing points between the two sides fully and permanently open.

Nepal’s trade with China largely takes place through Tatopani-Zhangmu (Tibetan: Dram) and Rasuwagadhi-Kerung border points. The country’s bilateral trade with China has currently come to a grinding halt after the latter closed these two border points without giving prior notice, reported the IANS news service Aug 31, citing Nepali media.

The border points have never been fully functional since the devastating 2015 earthquakes. After the quakes severely damaged the road and other infrastructure at Tatopani, the busiest border point between the two countries, it took four years for it to reopen, but even then, only partially, noted theannapurnaexpress.com Aug 1.

The Rasuwagadi-Kerung border had come into operation in 2014, but due to lack of infrastructure and other reasons, it failed to serve as an alternative to Tatopani crossing, as China had planned, the report said.

Then Covid-19 pandemic struck in 2019. What little movement of goods that was taking place following the disastrous 2015 earthquakes came to a grinding halt, the report said.

* * *

The report cited officials as being of the view that China closed the Tatopani border mainly out of security concerns and the earthquake was just a pretext. This was because when Chinese security personnel arrived to assist Nepali villagers in border areas after the earthquake, they saw pictures of the Dalai Lama hanging in Nepali houses. And it alarmed them, the report said.

And the Tatopani Bazar, an important business hub for Chinese goods, was subsequently relocated. So, the once a bustling trading post is now deserted. Although the Tatopani border did come into operation in 2019, it was restricted to the movements of cargo trucks to curb the spread of Covid-19.

Besides, to this day, only limited cargo is allowed into Nepal from the border point, hitting Nepal’s exports to China and contributing to a swelling trade imbalance, the report noted.

* * *

And the IANS report noted, citing a Nepali official, that in a recent meeting between the Nepali and Chinese foreign ministers – Narayan Khadka and Wang Yi – in Qingdao city of China, the former reportedly expressed reluctance to accelerate already finalized development projects under Beijing’s flagship BRI, fearing the possibility of a ‘debt trap’ similar to that of Pakistan and Sri Lanka.

“It is our unstated policy now that we can’t receive commercial loans from China like Pakistan and Sri Lanka. We have only preferred grants from China. Coming back to the point of border closure, we can’t categorically say that the Chinese side is giving us a cold response due to our reservation in receiving commercial loans under the BRI projects,” the unnamed official was quoted as saying.

* * *

The Chinese side has yet to clearly spell out why the movements of goods to Nepal from its border points are being restricted, said the theannapurnaexpress.com report. “The Chinese side has communicated that they have locked down major cities in Tibet, so it will take some time for things to normalize,” Bishnu Pukar Shrestha, Nepali ambassador to China, has said.

Still, given the imposition of such border restrictions by China even before the Covid-19 pandemic, foreign relations experts in Nepal have been cited as saying Nepali officials should find out what is bothering Beijing and try to address the situation.

Upendra Gautam, general secretary of China Study Center Nepal, has said Nepal should not hesitate to ask China if there are other issues beyond Covid-19 restricting the movement of goods into Nepal.

“For China, security is more important than trade and economy,” Gautam has added. He is of the view that the two countries should have an honest talk on the matter. 

“China’s restrictions at the Tatopani and other border points follow from security concerns,” an official with the Ministry of Industry has said, requesting not to be identified.   

Nepal shares a 1,414 km border with Chinese-occupied Tibet.

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