China Expanding Its Influence in Bordering Himalayan Districts, Making Pokhara a Strategic ‘Station’

China has initiated a strategic expansion of its influence in Nepal, specifically targeting the western region, including popular destinations like Pokhara. . China, which provided loans to build Pokhara International Airport, is now looking to further enhance its presence in areas like Manang and Mustang, which share a border with it.

China is currently involved in numerous significant projects in Nepal, and Chinese businessmen are actively establishing themselves in the tourism sector by operating hotels and restaurants in popular tourist areas such as Thamel and Pokhara in Kathmandu. Expanding its influence to regions connected to the Korala border, such as Pokhara and Manang, Mustang, is the next step for China.

The recent surge in China’s activities in Nepal has led to an increase in geopolitical complexities. The areas where China is extending its influence are of interest to the United States and Western countries as well. These nations are concerned about the potential for various illegal activities if China’s influence grows in these regions. From Nepal’s perspective, the presence of any foreign country, including China, in the region may not be advantageous.

China is actively promoting language education and citizen-to-citizen plans in accordance with the agreements made during former Prime Minister KP Sharma Oli’s visit to China. Initially focused on major cities, China intends to extend these initiatives to rural areas. The government aims to integrate these efforts with the Global Civilization Initiative (GCI), a concept introduced by Chinese President Xi Jinping.

Additionally, China is providing assistance to Nepal Police, Armed Police, and the National Investigation Department by selling and distributing essential equipment and firearms. These activities are planned to be aligned with the President’s Global Security Initiative (GSI).

Government officials state that the realization of China’s ambitious plan in Nepal is anticipated to occur under the leadership of Prime Minister Pushpa Kamal Dahal Prachanda. It is rumored that an agreement may be reached during Prime Minister Prachanda’s visit to China.

In this regard, Deputy Prime Minister and Home Minister Narayankaji Shrestha’s ongoing visit to China is believed to be for the purpose of advancing these objectives. Minister Shrestha is currently in China as part of his official visit.

China is set to enhance its presence in Pokhara and surrounding areas by utilizing the Pokhara International Airport. On January 1, Prime Minister Pushpa Kamal Dahal ‘Prachanda’ inaugurated the regional international airport, which was constructed with assistance from China, in the popular tourist destination of Pokhara in western Nepal. Initially, the airport served only domestic flights but, six months later, on June 21, it welcomed its first international flight from Chengdu Airport in China, operated by Sichuan Airlines.

The construction of Pokhara International Airport was funded through a loan of Rs 22 billion from China’s Exim Bank. However, Nepal is facing challenges in repaying this debt, as the country must generate profits from operating the airport to cover the loan. China has further fueled controversy surrounding the project by stating that it falls under the Belt and Road Initiative (BRI).

Chinese Ambassador to Nepal, Chen Song, once again reiterated that Pokhara International Airport is a significant flagship project of China’s ambitious Belt and Road Initiative (BRI). His remarks were made during the first international commercial plane landing event at the airport on 21st June.

Ambassador Song also previously had emphasized the airport’s connection to the BRI during its inauguration. On December 31, the Chinese Embassy in Nepal proudly declared the Pokhara Regional International Airport (PRIA) as a prominent flagship project of the BRI.  However, in reality, the concessional loan agreement between the Civil Aviation Authority of Nepal and China EXIM Bank had not mentioned the BRI. The work of Pokhara International Airport had already started even before the BRI scheme enters Nepal.

In 2012, an agreement was reached between Nepal and China to build the airport in Nepal. In May 2014, two years before the loan was agreed, China CAMC Engineering was given the construction contract, at a time when China’s BRI was in a nascent phase. Chinese President Xi first announced the idea of BRI in 2013 as ‘One Belt, One Road’.

After Nepal and China signed the framework agreement on BRI in 2017, Nepal had initially selected 35 projects to be undertaken under Chinese President Xi Jinping’s flagship connectivity project. Later, upon Beijing’s request, the total number of projects was whittled down to nine with Pokhara airport off the list.

Nepal’s financial situation is currently burdened by both external and internal debts, leading to a higher allocation of funds for financial management rather than capital expenditure in the upcoming budget. This indicates that the government is facing difficulties in meeting the interest payments on the loans it has taken. Consequently, there is a possibility that China might request permission to operate Pokhara Airport, similar to how China took over the management of Sri Lanka’s Hambantota Port. Sri Lanka had built the port with financial assistance from China, but due to their inability to repay the debt, China assumed control, significantly impacting the Sri Lankan economy. A comparable situation could potentially unfold in Nepal.

China is also aiming to enhance its cultural influence in the Pokhara region. An illustration of this is the recently organized ‘Nepal-China Friendship Dragon Boat Festival.’ The Chinese Embassy in Nepal collaborated with the Nepal Tourism Board (NTB) and Pokhara Metropolitan City to host the inaugural Nepal-China Friendship Dragon Boat Race Festival in Pokhara on June 23 and 24. The Dragon Boat Festival holds popularity in China, and China seeks to introduce and promote this cultural aspect as part of its presence in Nepal. As a step towards this objective, Sichuan Airlines, a Chinese airline company, arranged direct chartered flights to Pokhara.