Nepal's new Prime Minister KP Sharma Oli is seeking to break away from India's influence and strengthen economic ties with China. The veteran communist leader has become the country's Prime Minister for the fourth time this year.
Prime Minister Oli left for China on a four-day visit on Monday. This is his first official foreign trip since taking office in July. In the past, Nepalese prime ministers usually went to Delhi on their first international visit after taking office. Delhi's relations with Kathmandu are centuries old.
Nine agreements were signed between Nepal and China on Tuesday. However, none of them are new. All of them have been done before. So far, there is no information about any new agreements between the two countries during Oli's visit.
Oli met Chinese President Xi Jinping yesterday. According to Chinese state media, in the meeting, the Chinese president reiterated his support for Nepal's infrastructure development. He said that Nepal should be transformed from a "landlocked country to a land-connected" country. The Chinese president also said that he would continue to support Nepal's economic development to the best of his ability.
Kathmandu has signed President Xi's 'Belt and Road Initiative'. President Xi has taken this initiative to build China's infrastructure and trade links with the rest of the world. Although the agreement was signed in 2017, no effective implementation of any project has yet begun, Kathmandu said.
Traditionally, Nepal is more dependent on its southern neighbor, India. Oli wants to break this tradition and deepen his country's economic relations with its northern neighbor and bring positive changes.
Currently, two-thirds of Nepal's international trade is with India. Only 14 percent of the country's total international trade is with China. However, China is Nepal's largest creditor country. According to the World Bank, China has lent Nepal more than $310 million, which is $30 million more than Delhi.
In 2016, during his first term, Oli signed a petroleum agreement with China.
A year before the agreement was signed, India imposed a six-month oil embargo on Kathmandu. Oli's deal with China has undermined India's status as Nepal's sole energy supplier and paved the way for Nepal's increased cooperation with Beijing.
Interest rate panic
China has so far lent $216 million to Nepal to build an international airport in Pokhara, Nepal's second largest city. Pokhara is about 200 kilometers from the capital Kathmandu. Pokhara Airport began operations last year.
China has built the airport. Beijing sees Pokhara Airport as a symbol of the success of its 'Belt and Road Initiative'. But the airport has been facing various problems since its opening. For example, not many international flights can arrive there. Because to get to Pokhara Airport, one would have to pass through Indian airspace. India is not allowing the use of its airspace.
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