BEIJING: Nepal’s veteran communist politician K.P. Sharma Oli, returning as prime minister this year for a fourth time, aims to persuade Beijing to give new momentum to planned infrastructure projects during a days-long visit to China.
Oli’s visit was his first to a foreign country since his July swearing-in, a break from the customary destination of New Delhi, with which Kathmandu has centuries-old ties.
He is set to meet Chinese President Xi Jinping and Premier Li Qiang on Tuesday for in-depth talks, Beijing said. Xi has previously said China would help Nepal transform from a landlocked country into a “land-linked” one.
Kathmandu, which signed up for China’s Belt and Road infrastructure initiative in 2017, says no project has yet been implemented since a framework pact was inked.
Oli wants to deepen and recalibrate economic ties with Nepal’s northern neighbour as much as he seeks to reduce its traditional dependence on India to the south.
India accounts for two-thirds of Nepal’s international trade while China has a share of just 14%.
But China is a bigger two-way creditor, having lent more than $310 million, World Bank data shows, or $30 million more than New Delhi.
Nepal signs power export deal with BD, India
During his first term as prime minister in 2016, Oli cut a petroleum deal with China after New Delhi imposed a six-month oil blockade on Kathmandu a year earlier.
That move upended India’s status as Nepal’s sole fuel supplier and paved the way for increased co-operation with Beijing.
China has since extended Nepal a loan of $216 million to build an international airport in Pokhara, the second-largest city about 200 km (124 miles) west of Kathmandu, which began operating last year.
But the Chinese-built airport, claimed by Beijing as a symbol of Belt and Road success, has grappled with problems, such as a lack of international flights, due to India’s refusal to let planes use its airspace to reach Pokhara.
Debt concerns have also spurred debate among political parties, including Oli’s Communist Party of Nepal (Unified Marxist Leninist) whether to embark on Belt and Road projects using loans from China, rather than grants.
Sri Lanka, a key recipient of Belt and Road loans to fund transport and power projects, defaulted on foreign debt in May 2022, offering a sobering reminder of the risks of unsustainable borrowing.