Foreign Minister Shisir Khanal’s visit to China was not limited to traditional diplomatic events. Having arrived in Beijing after his trip to India, he openly acknowledged Nepal’s own institutional weaknesses and administrative instability as reasons why projects under the Belt and Road Initiative (BRI) have not progressed as expected.
The visit involved important discussions in Beijing on sensitive issues ranging from addressing China’s concerns about corruption investigations at Pokhara International Airport to Nepal’s diplomatic note and China’s response regarding the Mansarovar Agreement between India and China related to the Lipulekh-Limpiyadhura region.
During his China visit, Foreign Minister Shisir Khanal held an extensive conversation with journalist Binu Subedi, covering diverse topics including the relationship between the Chinese Communist Party (CCP) and the Nepali Rastriya Swatantra Party (RSP), as well as the roadmap for Nepal-China economic integration over the next five years.
The formal part of your China visit is nearing completion. How do you evaluate this visit overall?
From my perspective, this visit had two primary objectives. First, the newly formed government following the elections sought to initiate high-level bilateral visits to strengthen relations between the two countries. Second, it was important to share the new government’s priorities with the Chinese side. Additionally, continuing traditional diplomatic strategies with China was also a goal. I believe that both formal and informal meetings helped create a positive environment.
It appears China was trying to understand the new political leadership formed after the ‘Janajati’ movement even before your visit. There were various suspicions concerning the government’s nature and how close or distant it would be from China. To what extent did your visit address these doubts?
China’s official stance is clear: regardless of political changes in Nepal, they want to work together with Nepal and maintain the stability of traditional relations. Since I have previously led the foreign department of the Rastriya Swatantra Party, we already had established links with the Chinese party. So, we weren’t new to the Chinese side. Contrary to what was said externally, there wasn’t significant suspicion. Even if some existed, this visit helped clarify matters and build mutual trust.
Yesterday, as Foreign Minister, you met with your counterparts and, in your capacity as head of RSP’s foreign department, also met the head of the CCP’s foreign department. These meetings have different dimensions and significance. You mentioned ‘A close neighbor is better than a distant relative.’ What was the context and meaning behind this statement?
The Chinese official had returned from a visit to Mongolia, during which we discussed Mongolia’s ‘Third Neighbor’ policy and relations with the United States. He compared Nepal and Mongolia as similarly landlocked nations and conveyed China’s perspective of prioritizing close neighbors. The phrase “A close neighbor is better than a distant relative” was used in this context, indicating that Nepal should understand and embrace this viewpoint as well.
There are concerns that the RSP government may lean westward and that China is worried about projects like the MCC and SPIP. Were these issues brought up during your visit?
The MCC and SPIP topics were indeed discussed. The Chinese side believes that certain powers might use Nepal to harm China, so Nepal must stay vigilant. Road and infrastructure work under MCC is ongoing. Regarding projects like SPIP, China suggested that Nepal should make decisions based on their merits and drawbacks. We clarified that Nepal is not part of any security alliance and follows a policy of non-alignment.
There are also Chinese concerns about increased Tibetan refugee activities in Nepal. What was discussed on this matter?
This is a longstanding issue that recent governments have also addressed in dialogue. We reiterated Nepal’s traditional position—that no anti-China activities are allowed on Nepali soil. We made this clear to the Chinese side. Without specific names or open accusations, the Chinese side also desires the same clarity and cooperation.
Did you discuss the ten projects under the BRI? How might these progress going forward?
We did not have detailed discussions on specific projects, but the general approach to advancing BRI-related projects was raised. Our focus is primarily on connectivity and infrastructure development.
Was there any discussion on financial modalities under the BRI framework agreements?
We could only engage in theoretical discussions about financing modalities. It is clear that project selection and prioritization are important. Connectivity projects are of special interest, and once financial agreements are in place, work can proceed.
As head of RSP’s foreign department and actively involved in party foreign policy formulation, what is your view on the BRI projects with China?
BRI projects are not inherently bad. However, it is vital to evaluate the economic merits and benefits of each project. Some projects on the list are good, but every project must be assessed on its own quality before moving forward.
What is the government’s stance on the Amargadhi Sports Stadium and Jhapa stadium projects?
The Amargadhi project began before the BRI and currently faces legal and land-related issues with the Investment Board. The possibility of high operational costs exists, so the project’s viability will be discussed based on these factors.
There is a significant trade imbalance between Nepal and China. Are there initiatives to help Nepalese products access the Chinese market?
Nepal imports many goods from China but exports very little there. China provides duty-free access on around 8,000 products, but Nepal has not been able to fully utilize this due to insufficient production volume and standards.
We need to focus on high-value agricultural exports and medicinal herbal products. To achieve this, collaboration with China in quality testing and establishing certification laboratories is necessary. Initially, manpower is more critical than equipment. The Chinese side is positive about this cooperation.
Has Nepal’s relatively small export volume impacted trade and market access in China?
That is likely the case. We have not been able to meet the quality and quantity standards set by the Chinese market.
By focusing on high-tech and low-weight products, Nepal can integrate into the supply chain. Although direct competition with China is challenging, participating in value and supply chains offers opportunities to learn technology and generate employment.
What kind of support does Nepal expect from China in technology, tourism, investment, and industrial sector development?
In high-level business discussions, I emphasized the tourism sector the most. Tourism is a relatively easy option to quickly improve Nepal’s economy. Despite many outbound tourists from China annually, only about 95,000 visit Nepal, which is a very small share of the Chinese market. This needs urgent improvement.
The dialogue highlighted the need to develop infrastructure, improve internal networks, resolve air connectivity issues, and invest in hotels and hospitality. If the Chinese government views this positively, support will be easier to obtain.
Nepal struggles with tourism promotion and awareness, including in Beijing where knowledge about Nepal is limited. What plans are there to improve publicity?
I have frequently heard this since joining the Foreign Ministry. Nepal’s presence on Chinese-language social media is somewhat weak. I am considering establishing a ‘China Specific Desk’ using social media to aid in promotional efforts.
During the recent investment conference, what types of questions did Chinese investors ask about investing in Nepal?
Chinese investors showed interest in various opportunities, particularly in technology, AI, smart cities, and tourism. Some inquired about the South Asian market and legal frameworks. We realized the need to present Nepal’s potential more effectively.
Investors require clarity on contact persons and legal systems. Our financial ties are weak, so establishing a ‘Dedicated China Desk’ is necessary.
What are the main challenges hindering progress on previous high-level visits and project implementation?
The biggest challenges lie in management and follow-up. Many projects are announced, but proposals are not submitted in a timely manner. Institutional capacity limitations within our government machinery are a primary cause.
How did the Chinese side respond regarding the corruption allegations at Pokhara Airport?
The Chinese were concerned this issue might be an attempt to damage China’s reputation. I clarified that the Commission for the Investigation of Abuse of Authority is conducting legal investigations independently and China is not involved. We are ready to cooperate further with facts if required.
You arrived in China shortly after returning from India. What are your thoughts on maintaining balanced relations?
The visit to India was planned earlier but rescheduling led to two trips within a short period. Our policy is to maintain friendly relations with all neighbors, though each relationship has its own dimensions and uniqueness. I have tried to advance relations separately but with parallel objectives.
What is China’s position and role regarding the disputes over Lipulekh, Limpiyadhura, and Kalapani?
The Chinese side acknowledged the longstanding agreement to open Mansarovar pilgrimage but clarified that dialogue between India and Nepal is necessary on this matter. Their main position is that the dispute is bilateral between India and Nepal, and China does not intervene. We clearly expressed our concerns regarding our geography.
Before meeting the Foreign Minister, you also met with the CCP’s foreign department head. What was the significance of that meeting?
From a party perspective, he is my counterpart, and the party plays a crucial role in China’s governance. The leadership of the ruling party is very important in China. Such meetings strengthen party-to-party relations.
RSP’s principles might differ from CCP’s guiding ideologies. How do you sustain relations despite these differences?
The Chinese side has stated that regardless of which party is in power in Nepal, they want to maintain relations, especially with ruling parties. They are interested in practical exchange of practices and learning. We have also expressed our desire to learn from China’s economic development and progress.
Finally, how do you envision Nepal-China relations over the next five years?
We share political, cultural, people-to-people, and geographical ties. Over the next five years, we expect significant progress in economic relations and connectivity. Tourism, infrastructure, agriculture, and industrialization sectors will also see substantial development. I am confident this government will achieve more progress than the previous five years.
