Remember Xi Jinping’s Belt & Road Initiative (BRI), announced with much fanfare in 2013 during back-to-back visits to Kazakhstan and Indonesia? The initiative is seen as a success overall in terms of the strategic dividends for China: meaning more trade with the Global South and lots of business for Chinese companies in infra building including highways, railways and airports.
But there’s been backlash too and in Nepal, nine years after it signed onto the BRI, there’s nothing to show for it. According to an analysis in The Kathmandu Post, the BRI was presented as a major opportunity for Nepal to improve infrastructure, connectivity, trade and financial cooperation with China. Leaders spoke of turning Nepal from a “landlocked” country into a “land-linked” nation.
The first disappointment came when China slashed Nepal’s 35 proposed BRI projects to a grand total of nine. Even then nothing. When Nepal proposed more grants in aid rather than high interest Chinese loans, Beijing appeared to lose interest. Add to that concerns about viability given Nepal’s hilly terrain, and sparse population.
Even Pokhara International Airport became controversial. China unilaterally described it as a BRI project, but Nepal objected to the claim.
In 2023, China also launched the “Silk Roadster” initiative in Kathmandu under the broader BRI umbrella. Unlike the earlier focus on mega infrastructure projects, Silk Roadster focused on smaller projects, training programmes, cultural exchanges, vocational education and people-to-people cooperation. Chinese officials described it as a more practical and grassroots version of BRI engagement in South Asia.
But according to the Kathmandu Post report, the Chinese appeared preoccupied “strategic issues”. Recent meetings between Chinese ambassador Zhang Maoming and Nepali ministers focused mainly on Beijing’s strategic concerns.
Chinese officials reportedly urged Nepal not to issue identity cards to Tibetan refugees, avoid joining the US State Partnership Program, and stay away from Elon Musk’s Starlink internet service. Beijing also expressed concerns about growing American influence in Nepal and delays in Chinese-funded projects.
A briefing published by the Kathmandu-based think tank Centre for Social Innovation and Foreign Policy noted that Nepal’s approach to the BRI is strongly influenced by how India and US view the initiative.
India sees the BRI as expanding China’s strategic influence in South Asia, while Washington views it as part of Beijing’s broader geopolitical push. For Nepal, balancing between these competing powers has made the BRI even more sensitive politically.
Meanwhile, recent reports suggest how China is expanding its financial influence in the region with Pakistan preparing its first-ever issuance of yuan-denominated “Panda bonds,” reflecting Beijing’s growing push to internationalise its currency and deepen financial integration with partner economies.
