Has Nepal fallen prey to China's debt-trap diplomacy under BRI projects akin to Sri Lanka?

With an eye to expanding Beijing's influence in the Himalayan region, experts say that China has allegedly entrapped Nepal in the garb of infrastructure development to promise trade under the ambit of cheap loans. Subsequently, the question arises whether Xi Jinping comes to the rescue of small and poor nations, such as Sri Lanka and Nepal, to boost its debt-trap diplomacy by luring these countries with cheap China-sourced projects. 

Political analysts said that the superfluous promises made by Beijing to develop infrastructure projects in Nepal under the aegis of 'Belt and Road initiatives (BRI)' are falling apart.

Now, the problem arises when these countries fail to repay and keep up with rate interests of loans with increased chances of Beijing demanding concessions or other advantages in the name of debt relief. Thus, giving rise to Chinese hegemony in regions where it was not visible before the trade deal was struck and enforced. 

In fact, the proposed project at Hambantota port in Sri Lanka serves as a cautionary incident for those who perceive that Chinese aid comes at no or bare minimum costs. The concern holds relevance as China officially agreed to construct four seaports- Tianjin (Xingang), Shenzhen, Lianyungang, and three land ports- Lanzhou, Lhasa, Xigatse to Nepal with an objective to provide transit points. 

Is Nepal failing to identify China's debt-trap diplomacy akin to Sri Lanka?

While India is regarded as a time tested partner of Nepal, the Sher Bahadur Deuba-led government even risked its historic relations with India for Chinese assistance in various fields, as per reports.

Nepal and China signed the Beijing-led BRI in 2017 with an aim to become a middle-income country by 2030, however, reports suggest that promises are shattering one by one, after five years. While the objective to convert Nepal from a land-locked country to a land-linked one seems like a far-fetched goal, China did not fail to increase their pre-requisites for starting various projects. 

Moreover, delays in project funding and execution coupled with hefty loans to Nepal have defined China's intentions and led to an overall conclusion of being let down by Xi Jinping's administration, yet again. It is pertinent to mention that with limited reports on the commencement of projects, Chinese officials have repeatedly refused to make their action plans available to the public. 

Is Nepal falling prey to Chinese trade manipulation?

The awkwardness between Nepal and China over BRI projects was visible during Chinese Foreign Minister Wang Yi's recent visit to Kathmandu, between March 25 and 27. Reports suggest that no BRI related talks were held and Nepal officials made their preference for 'only soft or concessional loan' explicit, The Singapore Post reported.

Asserting the vicious debt trap cycle as it did in Sri Lanka, China had offered logistical support to Nepal under the scope of the China-Nepal Agricultural Technology Cooperation Agreement. The unforeseen COVID-19 pandemic and roadblocks compelled Nepal to seek an extension of the programme to one year. However, the Xi Jinping-led government dismissed Kathmandu's concern and even forwarded a termination notice for the programme.