Chinese FM to visit Nepal today amid Kathmandu's reservations on BRI

Chinese Foreign Minister Wangi Yi will look to ink key agreements on Belt and Road Initiative (BRI) with Nepal on his three-day visit to the country starting today, as the Himalayan country looks to flag reservations.

Officials familiar with the preparations said as many as 10 agreements related to technical and economic assistance to Nepal are likely to be signed during Wang's visit, reported Kathmandu Post.

The focus will be on signing at least implementation agreements for projects to be developed under the BRI, officials said, adding that, not even a single project has taken off under the BRI in Nepal in the last five years.

The Nepali side, however, has expressed reservations about financing and developing projects under the BRI, the report said citing sources.

Kathmandu has made it clear that there should be a joint mechanism for selecting the projects, preference should be given to grants but if a loan is required then the loan interest should not go beyond two per cent and that repayment time for the loan should be decided based on a mutually agreed timeline.

Nepal has also set a condition that there should be competitive bidding in BRI projects and they should be open to all, not just Chinese firms.

"After shortlisting projects, we can move ahead with a few under the BRI," said Prakash Sharan Mahat, spokesperson of the Nepali Congress who was former foreign minister when the BRI was signed in 2017. "Preference should be given to infrastructure and connectivity-related projects as per our requirements and priority."

The Chinese visit also comes amidst a recent deterioration in ties between the two countries in light of Nepal's recent ratification of the Millennium Challenge Corporation (MCC) compact with the US. The MCC compact grants USD 500 million worth of developmental assistance to Nepal from the US.

Following the MCC deal, the foreign ministry in Beijing reportedly concluded in its review that the Chinese presence in Nepal is weakening, hence, Foreign Minister Wang is being sent to Kathmandu to explore ways to turn things around, media reports said.

The Nepali side is also expected to raise other issues including allowing more Nepali vehicles to enter China by relaxing the COVID protocol, while also allowing more Chinese trucks to enter Nepal.

The Chinese side has been allowing only 20 Chinese cargo containers to cross over to Nepal daily via the Tatopani border and nine containers via the Kerung border, Kathmandu Post reported.

Nepal will also raise the issue of the Nepali students enrolled in Chinese universities who are currently stuck in Nepal after returning home due to the pandemic due to China not reopening flights.

Wang's Nepal visit will culminate the slew of trips that the Chinese Foreign Minister has made to the South Asian countries since he arrived in Pakistan on March 21 to attend the Organization of Islamic Countries (OIC) summit as a "special guest". Wang held talks with Taliban representatives in Afghanistan on Thursday, followed by his arrival in New Delhi the same evening, where he is expected to hold talks with External Affairs Minister S Jaishankar and National Security Advisor Ajit Doval today.

Wang had drawn a sharp rebuke from New Delhi on Wednesday on his remarks at the OIC summit where he had said that China "shares the same hope" as their "Islamic friends" on the Kashmir issue.

"We reject the uncalled reference to India by the Chinese Foreign Minister Wang Yi during his speech at the Opening Ceremony. Matters related to the Union Territory of Jammu & Kashmir are entirely the internal affairs of India. Other countries including China have no locus standi to comment. They should note that India refrains from the public judgement of their internal issues," Ministry of External Affairs spokesperson Arindam Bagchi had said.

Notably, Nepal's Prime Minister Sher Bahadur Deuba is expected to arrive in Delhi on April 1 for a three-day visit, soon after Wang's visit concludes.