China’s Growing Political Clout in Nepal

In the last week of April 2020, Nepal’s ruling Nepal Communist Party (NCP) suffered a serious internal rift as rival factions within the party threatened to unseat Prime Minister K.P. Sharma Oli. Oli had come into power in 2018 with a five-year mandate.

Rival factions within the NCP were engaged in signature campaigns to demonstrate majority support in their favor. Senior leaders of the party, including co-chair Pushpa Kamal Dahal and Madhav Kumar Nepal, appeared to gang up against Oli. As the intra-party rift escalated, Chinese Ambassador to Nepal Hou Yanqi held a series of meeting with top party leaders including Oli, Dahal, Nepal, and Jhala Nath Khanal. According to local media reports, the Chinese ambassador requested that ruling party leaders maintain unity, and avoid a party split. The rival factions have since backtracked from their position seeking Oli’s resignation.

Foreign Minister Pradeep Kumar Gyawali said that Hou’s meetings with political leaders were part of China’s efforts to strengthen Kathmandu’s fight against the COVID-19 pandemic. But the series of meetings with specific ruling party leaders, namely those who were at obvious loggerheads with Oli, clearly demonstrated Chinese concerns about a possible internal rift within the ruling party.

Reports that Hou inquired about the internal NCP divisions and suggested they make efforts to maintain unity put on display China’s efforts to influence the internal political affairs of Nepal. Such efforts have gradually increased and become more clear and vocal than in the past. Local English media have published commentaries arguing that China is engaged in micro-management and is crossing a red line in Nepal.

Former Nepali ambassador to China and the leader of the ruling NCP, Tanka Karki, however, dismissed such reports. “In my understanding and knowledge, Chinese ambassadors meeting with political leaders was focused more on coronavirus-related issues, not about political issues and intra-party rift,” Karki said.

Traditionally, in Nepal, China has positioned itself as an external power that does not interfere or show too much interest, at least publicly, in the internal political affairs of the country – a standard diplomatic stance. In the past, China’s approach urged Nepal’s parties to resolve internal political issues by themselves. Over the past decade, mainly after the abolition of the monarchy in 2008, China began to increase its influence efforts with regard to all political parties. Before 2008, China depended on the monarchy to secure its security interests in Nepal. It was more engaged with the monarchy in a quiet way and its relations with other parties were very limited in the era before the abolition.

Kathmandu-based political analyst Chandra Dev Bhatta says, “China is an important neighbor of Nepal. [The] commonly held view with regard to China’s role is that it does not ‘interfere’ in Nepal’s domestic politics. This may partly be true in the past but not now.”

“Reality is such that after the political change… China has strongly positioned itself in Nepal and scaled up its engagement in more than one way. In the past, one could notice China’s involvement in the development of infrastructure but not in soft areas. Of late, China has been penetrating in Nepali politics as well as in society,” he adds.

With the abolition of the monarchy in 2008, there was a power vacuum. The political situation was very volatile. China began to cultivate ties with all of Nepal’s political parties. During the insurgency, China did not provide any support to the Maoist party; instead, it provided military assistance to Nepal after King Gyanendra’s military coup in 2005. Other countries such as India and the United States had suspended their military assistance, demanding the restoration of democracy in Nepal, but China helped the Nepali government fight the Maoists.

Then when the Maoists emerged as the largest party in 2008, China worked to strengthen their government. Even after the collapse of the Maoist-led government, China worked to maintain unity inside the Maoist party. In 2013, Beijing reportedly told the Maoist faction led by senior Maoist leader Mohan Baidya not to split the party. Ultimately, the Maoist party suffered two major splits in 2013 and 2015. Beyond the Maoist party, Chinese leaders suggested that Nepal’s communist parties come together to form a single communist party, but that was a hard sell.

During Nepal’s constitution drafting process from 2008 to 2015, China showed concern over the federal structures in Nepal. China suggested to Nepali politicians that they decrease the number of total provinces and stay away from ethnicity-based federalism. Though it was not publicly vocal on the matter, Beijing conveyed this message to the top leaders of major parties who were engaged in the constitution drafting process.

Soon after the constitution’s promulgation in 2015, two communist parties, the CPN (Maoist Center) and CPN-Unified Marxist-Leninist (CPN-UML), formed a coalition government. The coalition government, led by Prime Minister K.P. Sharma Oli, signed a Transit and Transport Agreement with China, which in principle ended Nepal’s dependence on India for its supply chains. After a few months, there was a crack in the coalition government as then CPN (Maoist Center) Chairman Pushpa Kamal Dahal “Prachanda” tried to sever ties with Oli. China then played a role to keep the coalition intact.

Later, the Oli-led government was toppled and the Chinese side expressed its dissatisfaction quietly. This was reflected in some Chinese newspapers, including in the Chinese Communist Party-linked Global Times. After Oli announced his resignation, the Global Times ran an editorial titled “Nepal should not let Prime Minister’s resignation hinder beneficial ties with China.” The story said, “Nepal’s Prime Minister KP Sharma Oli recently announced his resignation, causing uncertainty in the South Asian nation, as well as for Chinese investment in the country.”

Of late, China wants to maintain unity in the NCP and expand ties with Nepal. In 2019, a 15-member team of the ruling NCP, led by Dev Gurung, visited China at the invitation of the Communist Party of China. Chinese leaders that met the Nepali delegation underlined the need for strengthening the relationship between the two communist parties and suggested further consolidation of communist forces in Nepal. Chinese leaders also shared their views with Nepali leaders on ways to win the hearts and minds of the people and the best means by which to strengthen a party’s organizational base. It was one of several such visits by NCP leaders. There were a series of visits by ruling party leaders before the outbreak of the COVID-19 pandemic, including of chief ministers of Nepali provinces and chiefs of local governments.

Before Chinese President Xi Jinping’s visit to Nepal in October 2019, the CPN and Chinese Communist Party organized a symposium on Xi Jinping Thought. In 2018, at the 19th National Congress of the Chinese Communist Party, Xi presented his political blueprint for the next 30 years, called Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, which has now been officially incorporated into the CCP constitution. This ideology is known as “Xi Jinpingism.” Inside China, the ideology is being taught to party leaders and cadres, bureaucrats, and journalists, and it has been included in school curricula. For the last two years at least, there have been regular interactions between the NCP and CCP on these issues. In recent months, unlike in the past, ideology often figures prominently in the bilateral relationship.

“The presence of ideologically like-minded political parties – Communists at the helm of the power – have made easier for China to penetrate its political agenda as well. The Chinese Communist Party provided trainings to the ruling NCP on ‘Xi Jinping Thought’ last year when President Xi was visiting Nepal. In fact, ‘Xi thought’ has become de facto official  doctrine for the NCP and Xi somehow is in the process of making himself de facto leader of the NCP like in the 1960s, when Chairman Mao used to be the supreme leader of some of the Communist parties of Nepal and India,” Bhatta, the political analyst, told The Diplomat.

Former Ambassador Karki, however, said that China prefers to build equal relations with all political parties and does not chose one over another. “In their foreign policy, in my understanding, Chinese are not guided by ideology, but by their national interest. They do not play cheap games,” Karki told The Diplomat. The public perception in Nepal is that China would not interfere in the internal political affairs of Nepal.

China is cultivating ties with other parties beyond the NCP as well. 

For a long time, the Chinese Communist Party has maintained cordial ties with the Nepali Congress, the grand old democratic party, which has been further expanded over the past decade. Similarly, the CCP is cultivating ties with Madhes-based parties, the regional parties active in the southern plains area bordering India.

“China is open to working with any political dispensation in Kathmandu as long as it is prepared to take strong action against political activities of the Tibetan refugees. Significantly, China has also begun taking an active interest in Tarai politics,” writes Nihar Nayak of the Institute for Defense Studies and Analyses, a New Delhi-based think tank, in his book Strategic Himalayas.

At least publicly, China is trying to give the impression that it enjoys cordial ties with all political parties in Nepal.