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International relations

China mediates Nepal ruling party split and sidelines India

Beijing calls on Himalayan nation's leaders to honor their election pledges

Nepal's Prime Minister K.P. Sharma Oli with Chinese Premier Li Keqiang at a signing ceremony in Beijing's Great Hall of the People in June 2018.   © Reuters

KATHMANDU -- Hou Yanqi, China's ambassador in Kathmandu, has spent the last three months playing peacemaker to feuding members of the ruling Nepal Communist Party (NCP).

The ambassador's marathon series of meetings included a courtesy call on President Bidhya Devi Bhandari in early July that followed talks with Madhav Kumar Nepal, Jhala Nath Khanal and Pushpa Kamal Dahal -- all of whom are senior NCP leaders and former prime ministers.

The three politicians have mounted a serious challenge to the incumbent prime minister, K.P. Sharma Oli, demanding that he choose between the premiership and the party chair. Dahal, the former Maoist chairman, serves as co-chair with him of the ruling party.

In May, Hou met the disputing leaders during another political row. Trouble stirred when the Oli government issued an ordinance that would have facilitated splitting the NCP. Because Oli's opponents had gained a majority in the NCP's central committee, the prime minister hoped to amend the law to enable the party to split away with just 40% of the lawmakers. His government was forced to withdraw the ordinance.

Previously, it was India not China that was accused of meddling in Nepali affairs. A 2005 agreement between the Maoists and pro-democracy forces was mediated by New Delhi. The deal paved the way for peaceful protests in 2006. Two years later, the ancient Hindu monarchy was ditched, and the Himalayan kingdom became a republic.

India's Prime Minister Narendra Modi, left, with Nepal's Prime Minister K.P. Sharma Oli during a visit to  a Hindu temple in May 2018.   © Reuters

India's influence waned, however, after New Delhi imposed an economic blockade on Nepal in 2015 that cut crucial supplies to the landlocked country.

Lekhnath Paudel, a geopolitical analyst based in Kathmandu, said China tapped deeper into the NCP following its election victory in 2017.

"The Chinese were looking for an ally in Nepal," he told the Nikkei Asian Review. "The blockade of 2015, when Nepal-India relations hit a low point, brought China and Nepal closer."

Paudel said the merger between the former Maoists and the Unified Marxist-Leninists that produced the NCP opened the way to China becoming a major political stakeholder: "The NCP had a powerful country to lean on, and Beijing seemed comfortable with that alliance."

Ambassador Hou's mediation efforts indicate that Beijing is no longer pursuing "quiet diplomacy," in Paudel's view. "Through the flurry of meetings with the party leaders, China's ambassador gave the impression in Nepal that it was an influential neighbor," he said.

Prime Minister K.P. Sharma Oli, left, confers with Hou Yanqi, China's ambassador in Kathmandu, during an infrastructure opening ceremony in early 2019.    © Getty Images

Relations between the communist parties were cemented with an agreement in September 2019 between the Chinese Communist Party (CCP) and the NCP. It was signed by Madhav Kumar Nepal, chief of the NCP's international relations department, and his Chinese counterpart, Song Tao, head of the CCP's international liaison department.

According to Bishnu Rijal, an NCP leader, the agreement was designed to share experience on governance and controlling corruption, and to smooth relations between the party and the government.

"We wanted to learn from the Chinese how to facilitate transition of party cadres after they finished in government-appointed positions to the party," he told Nikkei. "We also wanted to learn how to coordinate work between the government and the party."

During recent meetings, Hou urged the leaders to resolve their differences. "Since the party received a popular mandate for peace and prosperity, we should work toward that goal," Rijal said. The ambassador said they should honor their election pledges.

Not everyone was happy with China's diplomacy, and on July 7 a group of students protested outside the embassy. Placards were emblazoned with, "Keep in the embassy, not in our leader's house," and, "Keep silence Yanqi." 

Zhang Shubin, director of the Nepal Study Center at Hebei University of Economics and Business, dismissed the allegations of Chinese interference as "baseless."

"It is the ambassador's duty to meet the president and leaders of the ruling party as well as opposition party to exchange opinions," he told Nikkei.

"If the meetings can help Nepal achieve stability, it will be good for the country and the people," he said. "China would like to see a stable and prosperous Nepal. Without stability, no country can achieve prosperity. China should be appreciated and not blamed."

Nepal's President Bidhya Devi Bhandari welcomes China's President Xi Jinping at Tribhuvan International Airport in October 2019.   © Reuters

Growing engagement between the CCP and NCP reflects China's more assertive international posture, Paudel said. "As an emerging global power, China has been keen to shape politics in its favor," he said. "The Chinese want political stability in Nepal, but it should be conducive to their interests."

Meanwhile, a proposed trans-Himalayan railway connecting China's Tibetan region to Kathmandu has recently been revived after being stalled by a financing disagreement. Survey work has begun on the $300-million project, and an ambitious 2025 completion date set. 

Kathmandu has reciprocated China's support for the government. Nepal was one of 53 countries that backed China's controversial security law for Hong Kong at a United Nations Human Rights Council meeting in Geneva. On July 27, Nepal's foreign minister, Pradeep Gyawali, along with the foreign ministers of Pakistan and Afghanistan, attended a video conference with Wang Yi, China's foreign minister and state councilor. Wang promised support in the fight against COVID-19 and to accelerate post-pandemic economic recovery, Xinhua News Agency reported.

China's use of the three countries is seen as a way of shoring up support around South Asia against India and its sphere of influence. But there are limits to how far it can go. According to Paudel, China will be unable to completely usurp India because of Nepal's economic reliance on its southern neighbor.

"The Nepalese see China as a counterweight to India," he said. "China may not go in for the kind of micromanagement India was known for, but if it shows such tendencies it will not take long for anti-China sentiments to arise in Nepal."

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