PM Oli’s Landmark China Visit and the BRI Cooperation

22 December 2024, NIICE Commentary 9799
Manila Prajapati

Nepal Prime Minister K.P Sharma Oli’s visit to China on 2 December at the invitation of Chinese Premier Li Qiang holds significance for the BRI Cooperation framework and infrastructure Development. It marked an important chapter in Nepal-China relations. Oli was accompanied by a delegation of 87 people and to make this visit successful many high-level delegations hold talks as a part of his visit. Foreign Minister, Dr. Arzu Rana Deuba before Oli’s visit, emphasized the progress of connectivity projects like the cross-border railway project, the Tokha-Chhahare tunnel, highway and economic corridor projects while in a meeting with Chinese Minister Wang Yi.

Agenda

Oli’s China visit agenda focused on several areas of mutual interest. Topmost among them was signing the Belt and Road Initiative (BRI) with a focus on signing agreements for new infrastructure projects under the BRI framework which was successfully completed on his visit. The agenda of the visit includes connectivity, trade, investment, tourism, agriculture, and infrastructure development projects. With this agenda, the visit has shown the significant importance of Nepal-China relations in the economic framework.

Major Outcomes

One of the main outcomes of Oli’s visit to China reflects the meeting between Nepali PM Oli and Chinese President Xi Jinping on December 3, where Xi highlighted the willingness for enhanced cooperation with Nepal in the areas of infrastructure development and Belt and Road Initiatives (BRI). On the same day, Oli held a meeting with Chinese Premier Li Qiang. They signed various nine deals including various agreements and MOUs. The nine deals include Tokha-Chhahare Tunnel Construction, Nepal-China Trade Enhancement,  Basantapur Durbar Reconstruction, Thermally Processed Buffalo Meat Export: Protocol for buffalo meat export, Development Plan (2025–2029), Economic and Technical Assistance: MoU for further cooperation, Cash Assistance: Exchange of letters for 300 million Chinese Yuan assistance, Volunteer Chinese Language Teachers: MoU on sending volunteer teachers and Communication Technology Cooperation: MoU on collaboration between Nepal Television and China Media Group.

Nepal and China signed the BRI

Nepal and China signed on BRI, it was delayed by a day due to the term “grant” but on December 4, after a discussion Nepal and China officially signed a BRI cooperation framework using the term “assistant financing modality” which was amended by the Chinese side. The BRI was signed by Amrit Bahadur Rai, the Acting Foreign Secretary, and Liu Sushe, the deputy head of China’s National Development and Reform Commission. In an address at Peking University, Oli highlighted that under President Xi Jinping’s government, Nepal would benefit from China’s BRI. After Oli returned to Nepal, he noted the significance of all signed agreements, particularly under the BRI, which would enhance Nepal’s connectivity and socio-economic development.

Focus on Infrastructure development and Economy

Nepal and China have focused on improving connectivity, developing infrastructures, with China playing a key role in supporting Nepal’s infrastructure development for economic transformation. Infrastructure development is crucial for Nepal’s goal of transitioning from landlocked to land-linked, thereby enhancing connectivity with regional and global markets. At the Nepal-China Business Summit held on December 4, the discussion centered on expanding trade, economic cooperation, and infrastructure development between the two nations. It reflects the agreements signed between Nepal and China. Oli also acknowledged China as the largest investor and second-largest trading partner of Nepal but stressed the need to address the trade deficit and facilitate trade for Nepal agricultural products in the Chinese market. Strong trade and economic ties were highlighted with both sides emphasizing the potential for future collaboration in trade and investment. Tourism was also highlighted as a sector with immense investment potential. During Oli’s visit, Chinese President Xi Jinping also showed support for Nepal’s infrastructure development highlighting that China will offer more support to develop the country’s infrastructure.

 Conclusion

PM Oli’s China visit has marked a crucial turning point in Nepal-China relations, which was in low limelight during the pandemic. The agreements signed, particularly those related to the BRI, set the stage for increased Chinese investments in Nepal’s infrastructure and trade sectors. While there are concerns of Nepal falling into debt trap, Nepal should be careful on selecting projects which are economically viable and technically feasible. If these aspects are taken into consideration, Nepal’s future prospects under the BRI framework are promising. However, much also depends on the implementation as political instability, distrust among the coalition partners and other geopolitical factors have huge impact in Nepal.

Manila Prajapati is a Research Intern at NIICE.