China’s Engagement With Nepal’s Ruling Party Troubles India

Recently, Nepal’s ruling party, the Nepal Communist Party (NCP), was on the verge of splitting due to an internal rift. But the active participation of the Chinese ambassador to Nepal, Hou Yangqi, likely averted the party’s split, preventing the dissolution of parliament and announcement of a general election.

On April 30, before a crucial NCP Secretariat meeting on May 1, Hou met with Prime Minister K.P. Sharma Oli, President Bidhya Devi Bhandari, and NCP co-chair Pushpa Kamal Dahal (Prachanda), ostensibly to discuss China’s role in Nepal’s response to coronavirus pandemic. The development, however, was significant since Prachanda and senior party leader Madhav Kumar Nepal had sought Oli’s resignation at an April 28 secretariat meeting. The tussle for power within the party continues and Oli has even gone to the extent of blaming India for trying to oust him.

The schisms between Oli’s faction and Prachanda’s over several governing issues pushed the country to the brink of political instability yet again. Prior to a 2018 merger that created the NCP, Oli and Prachanda had each headed up separate political parties, and had previously tussled over leadership and representation in the new unified party.

Mallika Shakya, a senior assistant professor at South Asian University, told The Diplomat that China seeks a stable government in Nepal.

“Chinese foreign policy on Nepal has been more strategic than ideological, or even emotional. For one, China lacks the kind of person-to-person relationship that India has with Nepal due to its 1,690 km open border. China is well aware of this reality. The Nepal-China bilateral relationship is about capital-to-capital diplomacy, and China has consistently prioritized stability over short-term calculations of loss and gain,” she says.

The fighting within the NCP had escalated after co-chairman Prachanda expressed his dissatisfaction over Oli, who also chairs the party. The duo had come to a compromise where Oli would rule the country for a full five years and Prachanda would take care of party affairs during the party unification process between Oli’s Communist Party of Nepal (United Marxist Leninist) (CPN-UML) and Prachanda’s Communist Party of Nepal (Maoist Centre) on May 17, 2018. The unification put the NCP party in a strong position, with a two-thirds majority in the parliament.

Prachanda in recent times had partnered with the Madhav Nepal faction to coerce Oli and make him resign from the post of both prime minister and chairman. Oli’s introduction of two ordinances on April 20 concerning political parties and the constitutional council thus sent a tremor among political fraternity.

One of the ordinances aimed at amending an existing provision of the Political Parties Act that requires 40 percent support from both the parliamentary party and party central committee for a party to split. The ordinance, which was withdrawn by Oli after criticism within his party, would have amended the act so that 40 percent support from either the parliamentary party or party central committee would have been enough to split a party. Analysts believe the ordinance targeted Prachanda and Madhesh-based parties. Despite the ordinance’s withdrawal, Prachanda felt that Oli had used it as a bully pulpit to bring out insecurities among the Prachanda-led factions.

Many believe that Oli is trying to stick to his demagogue behavior. Oli had proposed at an April 29 Secretariat meeting to make vice chair Bamdev Gautam the next prime minister and senior leader Madhav Nepal the third party chair. The move was seen as an attempt to sideline co-chair Prachanda. However, the party agreed to promote Gautam to the lower house of the federal parliament, hoping to settle all the disputes within the party.

The Secretariat meeting on April 6 saw the incumbent prime minister, Oli, walk out citing health concerns. The meeting was inconclusive and the standing committee meeting has also been postponed indefinitely.

China is concerned with the development as it played a key role in the unification of the party. In recent years, the NCP and the Communist Party of China have strengthened ties and increased bilateral visits. Chinese President Xi Jinping visited Nepal in October 2019 for two days and the NCP has shared Xi’s doctrine with its members. China also wishes to see Nepal become more independent of India.

Bishnu Rijal, deputy chief of the Department of Foreign Affairs and a member of the NCP Central Committee, told The Diplomat, “We welcome any positive message to our party from any nation. The meeting of the Chinese ambassador with NCP’s top leaders cannot be related to the party split. China reiterated that the ongoing Chinese-funded developmental projects won’t have any budget shortage. Her active meeting shouldn’t be interpreted otherwise.”

China’s engagement with the incumbent party also includes its investment in innumerable infrastructure projects, and seeks ideological similarity between the two governments.

Opinion is divided on whether the Chinese ambassador played a role to convey China’s message to the ruling party. Xi also had a phone call with Nepali President Bhandari on April 27. Although it was reported that the call was only about the COVID-19 situation in Nepal, many analysts believe otherwise.

Nabina Lama, member of House of Representatives from the NCP, said that the “Chinese ambassador’s meet[ing] with top leaders of NCP has been misinterpreted and misconstrued since had maintained diplomatic boundaries. Her meeting was only a part of maintaining a diplomatic relationship. It was not for lobbying.”

The Nepal Communist Party is expected to rule the country until the next elections in 2022. Political analysts in Nepal had hoped that the party would be the first in Nepal’s democratic system to rule for a full term. But the constant bickering within the party and Oli’s unpopular governance methods have made many skeptical about the party’s future.

China’s recent emergence as a mediator in Nepali politics sends a strong signal to India that the Himalayan nation is no longer as much in its strategic backyard as it would like to believe. There’s a sense of fear and dismay among analysts in Nepal that the country might be succumbing to China’s micromanaging tactics.

Sudheer Sharma, the author of The Nepal Nexus, details in his book how India’s intelligence unit, the Research and Analysis Wing (RAW), micromanaged Nepal’s politics throughout its civil war and argued that India is only interested in Nepal’s waters; it sees the country through the lens of its security. Sharma now fears that China might have growing interest in Nepal.

“We have seen Indian and American interference in Nepal since 1950. But Chinese activities have risen after the 2015 economic blockade. If an ambassador meets every key member of the political parties then it is concerning. Chinese lobbying is openly seen in Nepal and it is not a good sign for Nepal. It might have other effects in Nepal,” Gajendra Budhathoki, editor and economic commentator with News Karobar, said.

The rise of Chinese engagement in Nepal’s politics only complicates things now and in the future. There’s no denial among Nepali critics that India has from time to time interfered in Nepal’s politics, and the rise of China in a similar fashion is worrisome, with geopolitical implications.

However, Lama disagrees, and says that the ruling party is not going to split and that China played no role in ongoing political dynamics.

“The party was formed after the merging of two parties. One cannot deny that the role of India and China in Nepal’s politics will [never] disappear since they have their interests. And at the same time, they know well that they cannot interfere in Nepal’s sovereignty.”

China’s engagement with Nepal’s ruling party sends a strong message to India that Nepal no longer listens to India alone. As New Delhi is busy with containing COVID-19, the largest democracy in the world is silently watching Nepal drift away from its sphere of influence – wondering if its past micromanaging tactics that sought to maintain “controlled instability” in Nepal have backfired.

Chinese Ambassador Hou Yanqi continues to meet all the NCP top leaders as the fighting within the party hasn’t stopped. Many Nepalis see this as northern interference, as China seeks a controlled stability of its own in Nepal. Analysts argue that China has learned from India as the southern neighbor used to do the same before 2015.

“China played a key role in unifying the two communist parties and they have done the same to not let it split. Without any backing, the current PM Oli would not take any extreme steps. It is unfortunate for Nepal’s sovereignty that China now interferes in Nepal’s domestic affairs,” Budhathoki added.