Kathmandu- Chinese Premier Li Qiang on Wednesday called for the implementation of the long-pending Belt and Road Initiative (BRI) while congratulating newly appointed Nepal Prime Minister KP Sharma Oli. In a personal congratulatory message to Communist leader Oli, Premier Li conveyed his regards on behalf of the Chinese Government for Oli assuming office as the Prime Minister of Nepal.
Premier Li emphasized the need to implement the agreements reached between the top leaders of the two countries and to promote high-quality Belt and Road cooperation, as well as cooperation in other fields. He highlighted the goal of making new progress in the friendly China-Nepal strategic partnership for development and prosperity.
Recalling the longstanding friendship between China and Nepal, connected by the Himalayas and rivers, the message noted that since the establishment of diplomatic relations 69 years ago, both countries have adhered to the five principles of peaceful coexistence, setting an example of equality and win-win cooperation.
However, the implementation of BRI projects in Nepal has faced significant challenges, primarily due to disagreements over financial modalities. Nepal has been reluctant to accept commercial loans from China, requesting either grants or loans with lower interest rates, similar to those offered by the World Bank and the Asian Development Bank. These financial concerns have stalled negotiations and the signing of the BRI implementation plan, which is essential for determining the financing and investment modalities of the projects.
During a visit to China by former Foreign Minister Narayan Kaji Shrestha, the two sides agreed to sign the BRI implementation plan “as soon as possible.” However, no progress has been made yet.
Despite these challenges, China has continued to use its soft power to maintain influence in Nepal, leveraging areas such as education, tourism, and health. Nepal’s strategic location between India and China makes it a crucial player in regional geopolitics, and China’s engagement through the BRI is part of a broader effort to strengthen ties with the Himalayan nation.
The political dynamics within Nepal further complicate the BRI’s implementation. The Nepali Congress, part of the coalition with Oli’s government, has taken a clear stance against accepting loans for BRI projects, preferring grants instead. In contrast, Oli’s party, the CPN UML, is more open to signing the BRI implementation plan even if it involves loans.
Interestingly, before signing the gentlemen’s agreement with Oli, Congress chair Sher Bahadur Deuba convened a meeting of all office-bearers and former office-bearers of the Nepali Congress to discuss the implementation of Chinese President Xi Jinping’s BRI projects in Nepal, a sensitive issue in the Himalayan nation.
With the Foreign Ministry now led by Arzu Rana Deuba from the Nepali Congress, the new coalition faces a challenging decision ahead. The need for transparency and parliamentary approval of the BRI framework agreement, signed in 2017, remains a contentious issue, with various political factions demanding clarity on the terms and conditions before any further commitments are made.
