China speaks about the US-funded MCC’s Nepal compact. Can Nepal’s leadership avert falling into a ‘geopolitical trap’?

While the USA is asking Nepal’s political leaders to meet or renege on their commitments of ratifying the compact, the comment from a Chinese official on the matter is feared to fuel the controversy.

Nishan Khatiwada

  • Read Time 4 min.

Kathmandu: At a time when communist forces of Nepal are alleged to be standing against the Millenium Challenge Corporation (MCC) grant at the behest of Nepal’s northern neighbor, a high-ranking Chinese official on Friday delivered a strongly-worded remark that China opposes “coercive diplomacy” of the USA. 

The report, however, does not elaborate what is the form of opposing such diplomacy. “Chinese Foreign Ministry Spokesperson Wang Wenbin said China opposes ‘coercive diplomacy,’ during a press conference on Friday, commenting on news that the US urged Nepal to endorse the Millennium Challenge Corporation (MCC) by February 28,” reported Global Times, a Chinese state-affiliated media.

The comment from the Chinese official comes days after the chairperson of the Communist Party of Nepal (Maoist Center) Pushpa Kamal Dahal’s secretariat had disseminated the message that Donald Lu, assistant secretary of state, ‘threatened’ Nepali leaders to ratify the Compact. Later, the US embassy in Kathmandu had rebutted the claim that the US Assistant Secretary of State threatened the Nepali leaders of consequences if the MCC Compact is not ratified by parliament.

“China welcomes the international community to cooperate with Nepal, contribute to Nepal’s economic development and livelihood improvement, but this should be done based on Nepalese people’s willingness without political conditions,” Global Times quoted Wang as saying.

“There is a mindset of passive compliance among Nepal’s political leaders and any powerful country can take advantage of that mindset. This case shows that some of our leaders have already submitted themselves to the geopolitical trap,” an analyst told Nepal Live Today on conditions of anonymity.

On January 29, Song Tao, Minister of the International Department of the CPC Central Committee (IDCPC), had held a video call with Prachanda. Though the Chinese side has issued an official statement regarding the call, the purpose and actual conversation between the two sides are not yet revealed by Prachanda. 

The comment by the high-ranking Chinese official, according to geopolitical experts, shows Nepal is falling into a geopolitical trap as political parties are handling diplomacy lightly. Comment from a Chinese official on such a sensitive issue is a deliberate move to push Nepal into a geopolitical quagmire.

“Comment from a third party on a bilateral project doesn’t bode well for Nepal. Nepal can not afford such a situation. If there are any issues between Nepal and the United States regarding the MCC Compact, they should be discussed and resolved through the bilateral mechanism,” said Geja Sharma Wagle, a geopolitical expert. “This also applies to any projects between Nepal and any countries, including China, India,” he added. 

Analyst Uddhav Pyakurel says that the situation has become complicated as the KP Oli government added the provision of parliamentary ratification in the contract. According to him, America and China standing at polar opposites regarding the MCC is not unusual or surprising.

“Two powerful nations in enmity always want to win over each other. So, it is natural for America and China to stand in favor and against the MCC,” he said. “But our leaders should have appropriate strategies to tackle the situation. They should not follow the instructions of either country. Nepal should not stay in the shadow of two nations’ enmity.” 

Nepal’s ruling alliance is divided over parliamentary endorsement of the US assistance meant for the construction of transmission lines and road upgradation. The tabling of the MCC Compact has been delayed as top leaders in the alliance are still at odds.

On Sept 3, 2021, Nepal’s Ministry of Finance sent a letter to the MCC office seeking clarifications. Later, on  Sept 8, 2021, MCC headquarters based in Washington responded to the letter clarifying that MCC’s Nepal Compact is not a part of the Indo-Pacific Strategy, it has no component of the military alliance, the constitution of Nepal prevails over the Compact and that it does not impact Nepal’s agreements with other countries.

PM Deuba and Maoist chair Prachanda sent a letter to the MCC on September third week, expressing commitment to quick ratification of the Compact. MCC responded to the letter and set February 28 as the deadline to ratify the Compact as per the request made from Nepal’s side. 

As the Maoist Center and CPN (Unified Socialist) are creating hurdles in the tabling of the Compact in parliament for its ratification, experts, as well as political leaders, are raising voices in favor of parliamentary ratification of the US grant.

Pyakurel further said that it is an obligation for Nepal to move forward calmly and transparently without letting the relationships with both countries worsen. 

Alliance parties should take this issue very seriously before there’s further damage to Nepal’s reputation in the international community. The message that Nepal is taking the side of any particular country or ideology is not in favor of Nepal and Nepali people, Wagle told Nepal Live Today

“There may be some sort of rivalry between the USA and China. But Nepal should not be dragged into any kind of strategic, geopolitical, and diplomatic debacle. Rather Nepal should use the superpower USA and the rising power China in the best interest of Nepal. So that the government should take the wise decision to avoid their rivalry in favor of the development of Nepal,” he said. 

“We always need humanitarian and developmental support from China. But this one is an uncalled-for remark by a Chinese official,” a Nepali Congress leader told Nepal Live Today. “Nepal has endorsed non-alignment as one of the guiding principles of country’s foreign policy and is capable of handling bilateral issues on its own.”

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