Asia

Why China's influence on Nepal worries India

File photo: Street vendors sit on the sidewalk in front of closed shops in Nepal's capital, Kathmandu, 6 March 2013 Image copyright AFP
Image caption Nepal is attracting investment from its neighbours India and China

As the instructor enters the classroom in Kathmandu, students rise from their seats and collectively greet him in Mandarin Chinese - "Ni hao! (Hello!)".

Each morning this group of about 20 boys and girls gather in a dingy, two-room flat above shops in a crowded Kathmandu market to learn Chinese. They are convinced that learning the new language will open up job opportunities.

"Over a billion people live in China, and even if just 1% of them visit Nepal every year, we will get a lot of employment," said student Raju Shreshtha, who wants to work as a tour guide.

A number of private institutions offering Chinese lessons have sprung up in the past few years in Nepal, a country sandwiched between the two Asian powers of India and China.

The Chinese government is actively encouraging Nepalese people to learn the language.

It has even sent instructors to Kathmandu to give free lessons and set up the Confucius Centre at Kathmandu University to "spread Chinese language and culture".

Image caption Raju Shreshtha is among the many learning Chinese in Nepal

As Nepal grapples with political uncertainty after years of Maoist armed rebellion and a seemingly unending peace process, Beijing is vigorously stepping up its engagement with Kathmandu.

It is focusing on investment, cultural exchange and heightened contact at all political levels.

Ahead of elections to Nepal's Constituent Assembly due in November, China is inviting leaders of important political parties for consultations, beginning with former prime minister and powerful Maoist leader Pushpa Kamal Dahal, more popularly known as Prachanda, who has just returned from Beijing.

Experts say China is also developing itself as an international educational hub, doubling the number of scholarships to attract Nepalese students.

"Traditionally the Nepalese elite used to go to India for higher education. But soon a day will come when the future leadership of Nepal will be educated in Beijing and Shanghai rather than in Indian universities in Allahabad, Varanasi and Patna," said senior Nepali journalist and analyst Yubaraj Ghimire.

All this is making China's regional rival, India, uncomfortable.

"India should watch out for Chinese activities in Nepal and if China starts spreading its influence southwards to the Terai region, then it's worrying for India," said Deb Mukherjee, India's former ambassador in Kathmandu.

Given the long history of mutual mistrust, an armed conflict in 1962 and the unresolved border dispute between the two countries, India is watching China's increasing interest in Nepal with a certain degree of suspicion.

Investment trend

Even though China is still far behind India in terms of overall investment in Nepal, officials say it will soon catch up.

China signed a deal with Nepal in 2012 to invest $1.6bn (£1bn) in the 750-megawatt hydropower project in West Seti, one of the largest power projects in Nepal.

A Chinese company is constructing the indigenously-funded 456-megawatt hydropower project in the Upper Tamakoshi region.

"As of now India is the largest investor in Nepal, but this trend is changing," said Dhruba Rajbanshi, director-general of the Department of Industry.

"Now China wants to invest in big hydropower projects and if that happens the Chinese investment will become really huge."

Chinese officials have said they want to use Nepal as a transit point to spread their business across to South Asia. This is another reason for India's discomfort, because it is already inundated by Chinese goods.

Road building

Image caption Nepalese students of Mandarin believe Chinese tourism will bring more jobs

As a first step to push its business interests beyond Nepal via the land route, China has undertaken various projects to develop road networks across the Himalayas.

It is modernising the 115km (71-mile) Araniko Highway, which connects Kathmandu to the Chinese border near the town of Kodari.

China is also investing $20m to upgrade the 17km dirt track between Nepal's Syaphrubesi and Kerung in Tibet. On the other side of the border it has already built Highway 318, which leads to Lhasa and ultimately to Shanghai.

"The Himalayas are no longer a barrier between China and Nepal," said Kanak Mani Dixit, editor of Himal Southasian.

He said there was an undeclared understanding between the first prime minister of independent India, Jawaharlal Nehru, and then Chinese Premier Zhou Enlai that Nepal should remain in India's sphere of influence.

"Now things are different. With growing instability in Nepal, Chinese interests and influence have also grown," Mr Dixit said.

"Concomitant to that, India is also becoming wary of China's moves in its neighbourhood."

Although bridging the huge cultural, linguistic and religious gaps with Nepal will remain a challenge for China for a long time to come, India is aware that China plans ahead and that it will not give up easily.

Now Delhi is now faced with the question of how it will respond to growing ties between China and Nepal.

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