Nepal views on China and SA: Enhancing Cooperation for joint progress

Madan Regmi

Chairman, China Study Center, Nepal

China, 'another China' and South Asia: 

South Asia and China constitute nearly half of the world population. Most of the South Asian nations border China. China rises from the Far East and extends to all the regions of Asia including South Asia. In the last sixty years of amazing development and innovative reforms, China’s geo-political image was bound to change, even for South Asian countries, from a remote Far Eastern country to one which is in the middle of them. While China has made tremendous progress in alleviating poverty, in South Asia this remains a formidable challenge for regional peace and security as the region inhabits the greatest concentration of the poor in the world. The Economist, London calculates that, in South Asia," all told, almost 290m are neither working nor studying: almost a quarter of the planet’s youth.” The largest number (31.1%) of unemployed and inactive youths is in South Asia, followed by East Asia & Pacific (18.4%) and Sub-Saharan Africa (21%).

China has been carrying out several developmental activities for the all round development of its western region and this development strategy, which has entered its revised second phase, is important as it covers a two-third of Chinese territory and a significant part of China's dynamic population. This development in China's West, in the words of Niaz Naik, equals to "creating another China."  In this context of "creating another China", the railroad of China has already reached Lhasa and the possibilities of linking Nepal,  which was the entrepot of trade between South Asia and South West China, with present day South Asia is very plausible. Possibilities of opening up railway link and nine land routes through Nepal presents immense opportunity to contribute towards the development and stability of this region vis-à-vis Nepal's own development. To quote Abul Ahsan, SAARC first Secretary General, it has been suggested by some scholars that some South Asian ports such as Chittagong and Kolkata may be nearer and more convenient for South West China (for example, Yunnan and Sichuan provinces) and part of Myanmar.”

The deep Sea warm water port of Gwadar in Arabian Sea in a district of Baluchistan province of Pakistan is also very important for the connectivity of this region. This port is 533 kilometers away from Karachi and 120 kilometers from Iranian capital and it is at the mouth of the Persian Gulf placing itself closer from key shipping routes in and out of Persian Gulf. This port is considered very useful for China especially for "another China" due to social, economic, trade, and political accessibility.    

The advances in information and communication technology in the 21st century very subtly supported by the geo-political closeness of "another China" and South Asia further enable the neighboring nations and peoples to transcend territories and boundaries in the blink of an eye. It is therefore equally essential to build a trust-worthy and effective system for enduring security as well as sharing security information and action, as necessary, to sustainably secure all neighborly transactions including trade and commerce activities.

Major Area of Cooperation:

There already exist multiple linkages between China and South Asia at several levels. Starting from the bilateral cooperation in areas of interest between China and each individual nation of South Asia, SAARC and SCO provide sufficient platforms at the inter-regional level for discussions in the socio-economic fields. Regional and international organizations such as Asian Development Bank, The United Nations, World Trade Organization, and World Tourism Organization are supposed to up scaling support to bilateral and regional efforts for facilitating trade. For the overall cooperation between China and South Asia, tourism is a major component. However, because of various factors such as insecurity, violence and poverty prevalent in the overwhelming areas of South Asia, only a small fragment of Chinese tourists visit South Asian countries.  This has caused substantial economic loss to each and every South Asian country and largely hindered the prospect of enhancing cooperation and understanding from people-to-people level between South Asia and China. However, the Chinese tourists are increasingly becoming star attractions even for the most advanced western countries. United Nations World Tourism Organization (UNWTO) has said “Chinese tourists have overtaken Germans as world’s biggest spending travelers after a decade of robust growth in the number of Chinese holiday abroad”. Chinese tourists spent $102 billion on foreign trips last year outstripping deep pocketed travelers from Germany and the United States. Chinese tourists spent 41 percent more on foreign travel in 2012 than the year before, beating the close to $84 billion both German and U.S. travelers parted with last year. Chinese tourists made 83 million foreign trips in 2012 compared to 10 million in 2010.

With the advances in transport and communication infrastructure along with strides in science and technology, the scope of cooperation between China and South Asia is immense. In this regard, eradicating poverty by generating income at the local levels through exploitation of the water and forest resources, besides tourism development, may be noted. Water energy and forest resources based industries and tourism packages to cater the needs can be created to suit the taste of investors and the travelers. Together promoting cultural resources wherein the birth place of Shakyamuni Gautam Buddha, Lumbini in Nepal, one of the holiest lands on the planet, can rejuvenate the peaceful glory of the Himalayan civilization for the largest segment of the peace-loving people both in China and South Asia.

A Pan-Asian development concept with the richness of culture and the civilizations of China and South Asia that includes the ancient civilization of Yangtze of China and Harappa (Mohenjo-Daro) of Pakistan and investment also on bilateral basis would help support smaller and weaker economies to brace themselves and stand firm as well as create an atmosphere for the building of Pan-Asia cooperation. 

China and South Asia combined hold enormous reservoir of water resources that can feed the entire Asian continent. And this is no small matter when the whole world is getting anxious over the shortage of water that is said to be the reason for imminent conflicts. The vast majority of South Asian population is deprived of both water and energy. They are living either under darkness or using the primitive means to read, write and quench their thirst.

Nepal is the most potential country of South Asia in terms of water energy. Nepal’s capacity to generate clean energy in cascade is beyond the comprehension of many that can greatly contribute to the development of the entire South Asia including densely populated countries like India, Bangladesh and Pakistan, and China also may wish to share the water energy and the benefits in the forms of profit, industrial products, efficient services and high quality infrastructures. Sustainable conservation, optimal utilization and effective management of trans-Himalayan Rivers in the face of climate change vicissitudes would provide the most enduring and legitimate basis for the 21st century ties between China and South Asia. This "basis" to be nurtured most caringly and carefully will provide China and South Asia a sense of much sought after environmental security. To work towards this direction, the need of the hour is to establish and promote an inter-regional institutional mechanism. To start with, International Center for Integrated Mountain Development (ICIMOD), an inter-regional organization based in Nepal, may step-by-step help the governments in China and South Asia to realize the proposed objective.

Key Principles:

First and foremost, principles of state-to-state relations need to be defined and agreed between the countries. Fortunately for today’s world there are established universal standards and values. In the specific context of China-South Asia relations the five principles of peaceful coexistence (Panchsheel) should be the basis of cooperation. While China very much abides the principles of Panchsheel, all the nations of the South Asia have yet to be fully respect these principles. However, for a cooperative and harmonious relation, it is most imperative that every nation must acknowledge that irrespective of size and colonial past, every nation is equal and has a to exist in equal footing.

Second, in view of the dismal record of SAARC, any new cooperation model between China and South Asia needs to adopt a multi-pronged approach. However, existing issues and problems between the major actors of such cooperative mechanism can neither be ignored nor wished away. Thus the importance and value of bilateral cooperation between China and every country of South Asia can neither be belittled nor slackened while going for regional cooperation.

Third, one of the important bases for regional cooperative alliance has to do with the resource market. How to effectively use country’s resources on a commercial basis for reaping optimum benefit for the region should set the tone for this alliance. China is the second largest economy of the world. According to a report published in early November 2012 by Paris based Organization for Economic Cooperation and Development, China will overtake United States by 2016 to become the world’s largest economy. The IMF also predicted that China’s economy would be bigger than that of US by 2016 in terms of Purchasing Power Parity.  China with the reserve of $3.8 trillion is capable of jumpstarting newer avenues for economic cooperation in South Asia. This would provide a strong base for regional alliance and cooperation. Obviously, the basis of such cooperation should be based on transparency, and mutual understanding of all countries involved. In case of SAARC, after two decades of its birth it is still waiting to be a functional regional organization and we don’t know how many years we have to wait to make it a fructuous for the region and to commence economic cooperation with China as a dynamic regional organization. Nevertheless, China and Africa, though geographically far apart, has succeeded in forging a viable economic cooperation on win-win basis and African continent has become the fastest growing economy. Africa is now really upgraded in the multi-polar world. Africa was once a strategic “abandoned Pawn" of the West making popular of “African Pessimism" for a long time. 

Last but not the least, the bonding factor that will make it happen cannot be left aside. Good understanding of the diplomatic as well as cultural language of the countries concerned, particularly the international Chinese language needs to be internalized by the South Asian countries’ governments for preventing any likely misunderstanding now or in future. Exchange visits by academic scholars, policy makers and business leaders in each other country would help take this process forward, which augurs very well with Chinese President Xi Jinping’s call for “sharing China’s prosperity with its neighbors’’. Let us all move to realize this honest objective with determination and courage. Presented to China-South Asian Countries Think-Tank Forum June 6th- 7th 2013 Kunming, China

PS: Madan Regmi couldn't attend the "China-South Asian Countries Think-Tank Forum" because of some unavoidable problems. But his paper was submitted to Forum: Ed.

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I agree


  • Posted on - 2013-06-24    by     Madan Regmi
  • Maybe I couldn't project my views clearly. So, some of the enlightened readers might have interpreted it in a different way. In my short paper, I have just tried to tell that SAARC as a regional organization has remained dysfunctional because of the feud among the countries of South Asia. Though I shied away to tell the bitter truth that India is the main villain for SAARC. In the case of Nepal, India has been the primary obstacle for foreign investment. In retrospect, back in 2000 Kodak Nepal P Ltd. had to pack up from Nepal as India refused to give Kodak Nepal products’ access to its market despite of the provision stipulated in 1996 Treaty of Trade between Nepal and India. “The Kodak issue has been discussed at political levels too. US Secretary of Commerce who was accompanying Bill Clinton to India in April 2000 even put in a word for the company. Prime Minister Koirala also raised the issue during talks with his counterpart while visiting New Delhi last year. Later he is said to have pitched for Kodak again at a meeting with the Indian PM at the UN General Assembly in New York”. So far I know, Nepal is a highly potential country in terms of natural resources, a nation of beauty and one among the three holiest lands of the earth. Thus, investment of any volume is lucrative in Nepal. As I have mentioned in my paper, Nepal is one of the countries in the world which has the highest potentiality in generating eco-friendly energy like hydropower. Besides, more than two percent of the fresh drinking water of the world is in Nepal. This has big market in South Asia and also in China. However, investors always complained that Nepal is not conducive for investment. Who is the culprit? We all know. Nepal has the capability to generate not less than 100,000 megawatts of hydropower and India currently needs 150,000 megawatts of electricity to meet its demands and most of its cities are having long load shedding and most of its villages are without light. Nevertheless, India has almost captured all the rivers of Nepal and even the agreements between Nepal and India (such as Pancheshwar multipurpose project on Mahakali river) that was to build hydroproject to generate 6000 megawatt of electricity has not been able even to lay a brick of its foundation and the DPR after sixteen years of agreement remains incomplete. Our enlightened leaders are aware that “India” which claims to be the heir of British India has never been happy with the SAARC. From the inception of this regional cooperation body, India has considered it as a ploy to encircle it. Rather, it should have played the role of a leader of SAARC which wants to make the entire region prosperous and harmonious. But the irony is that, this young India, which almost thinks itself as a superpower has not been able to buy the rational concept that to become a great power it first needs to be friendly with its neighbor and be prepared to share its prosperity with its neighbors. China though is second largest economy and it has been investing not only in the developing world but also in the developed world has not been able to invest in Nepal because of the hurdles created mostly by India. China suggested for joint venture with Nepal when Deng Xiaoping visited Nepal in 1978 but the rulers rejected the idea with the fear that India will be unhappy. Now since last two years China is trying to invest in Nepal. China has signed an MOU with Nepal Government to invest 1.6 billion dollars on West-Seti multipurpose hydro-project but Nepal Government has not been able to implement the deal. Similar has been the fate of Pokhara International Airport. I am sure once Nepal is liberated, investment from China and developed countries will be pouring in Nepal. It is against the backdrop that China is the largest trading partner of India which is trying hard to get Chinese investment. Since last two years, FDI in India has nose-dived and the capability of most of its former western investors have also waned. As for China-Africa Economic Cooperation, so far I know, it is based on win-win situation and today’s Africa is the fastest developing continent. So I will like to quote an imminent economist Joseph Stiglitz’s view on the present position of Africa. He writes, “the west never had any moral authority. Colonization, slavery, splintering of Africa into small countries and a long history of resource exploitation may be matters of the distant past to the perpetrators, but not so to those who suffered as a result”. (Complacency in a leaderless world, Joesph E. Stiglitz Economist club) As for Mr. Prabin’s comment that my writing is pro-Chinese, it is not a correct assessment and proper reading of my spirit of my paper. In reality, India which is projected as the largest investor in Nepal is not true. Most of its so-called investment is not helpful to Nepal. Apart from it, India has no capacity to invest even in a mid-sized hydro project in Nepal. India’s economy was tenth in the world in 2012 (IMF report) and in terms of population its economy is smaller than Nepal’s which is in the 107th in IMF 2010 rating of 182 nations. So the major investors in Nepal will be from China and the developed countries and many of the developed countries of Asia-Pacific region of Europe and America are eager to Invest in Nepal. What are the obstacles and which country is the culprit? Both David and Prabin, who are enlightened, know it well. So my writing is neither against nor for any country. I earnestly write for my own motherland Nepal.
  • Posted on - 2013-06-16    by     prabir
  • David has made very valid points on Regmi's pro China presentation. Let me here ask him: since we support One China policy why, then, does China put pressure on Nepal not to allow Taiwanese investments in Nepal? We need to welcome more US, Japan, Korean and Singaporean investments into Nepal and not just from China and India in the name of 'trilateralism'
  • Posted on - 2013-06-15    by     David in London
  • China has huge trading surpluses with each country of South Asia. It also has road and air connectivity with almost all countries.Soon there will be rail connectivity. So how come China can't promote regional cooperation? Does Mr Regmi assume it can't unless India permits? As an Observer nation of SAARC one has yet to see China making bold and imaginative initiatives that South Asia will find it difficult to ignore. It did so in Africa to exploit it resources. Is that the only motive for its 'largesse'? Is this a good example of "sharing economic property with its neighbours" ? Mr Regmi at least should be more economically imaginative for the sake of SAARC and Nepal.