Sino-Nepal relations are characterized by a remarkable continuity and stability both during the 30 years of the Panchayat system and in the last 12 years since the peoples’ movement succeeded in 1990. Despite political upheavals, these relations forged ahead, embodying various political and economic aspects, and opening up significant avenues of bilateral cooperation. The joint communiqué issued at the end of Prime Minister BP Koirala’s visit to China on 21 March 1960 stated that the two Governments had signed an “Agreement on the Question of the Boundary between the Two Countries”. Under the rubric of the Five Principles of Panchasheel, the two sides settled this question inherited from history.

     The royal takeover in 1960 and the banning of political parties in 1961 occurred at a crucial time in South Asia’s history. The subsequent defeat of India in its war with China compelled King Mahendra to adjust Nepal’s foreign policy with its two neighbors. Judged from today’s standpoint, some scholars have termed it as his pursuit of “playing one neighbor off against another” or his policy of “leaning towards China”. However, it was a pragmatic and independent exercise of Nepal’s foreign policy based on the geo-political reality of those days.

     The late King Birendra visited China a total of nine times and the Chinese leadership named him “an old and a trusted friend of China”. In fact, the King is probably the only world leader who dealt with all the top leaders of Chinese contemporary history right from Mao-Tse Tung to Jiang Zemin.

     The recently concluded visit of King Gyanendra and Queen Komal to China is their second visit abroad after his accession to the throne last year. During this visit, China expressed support for the Nepalese government’s fight against the Maoist rebels and its drive to achieve peace. The Chinese ambassador to Nepal had remarked, prior to the King’s visit, that the Nepalese Maoists have nothing to do with Mao Tse Tung and that they are misusing his name. Like India, the Chinese too do not want a chaotic and politically messy Nepal unable to govern itself and resolve its own problems. The Chinese recall that the last time there was an armed rebellion in Tibet, it was through Nepalese territory and the Royal Nepalese Army had to be used to invalidate the Khampas. The fleeing of the Karmappa Lama via Nepal proved yet again that Nepal is the easiest way into and out of Tibet which, despite its much publicized economic progress, remains the soft under-belly of China.

     Bilateral relations are witnessing a positive and encouraging trend due to greater contacts and deeper understanding between the two people in different fields and through various channels. In Fiscal Year 2001-2002, Nepal imported Rs. 11 billion worth of goods from China, of which goods worth Rs. 5 billion were imported from the Tibet Autonomous Region of China. On the export front, goods worth Rs. 538 million were exported to China of which Rs. 525.4 million was to Tibet. A non-governmental cooperation forum was constituted in 1996 with the objective of extending economic relations by the exchange of information and promoting Chinese investment in Nepal to reduce the increasing trade imbalance between the two countries.

     Last year, China placed Nepal as the ninth destination for Chinese tourists. It is expected that, with this pronouncement, Nepal’s tourism market will be diversified and tourist arrivals will go up at a time when the industry is passing through an extremely difficult period. It must be recalled here that Nepal is the only country which has direct flight links with Lhasa, the capital of Tibet. The Chinese are constructing a railway line from Golmo to Lhasa which is expected to be competed by 2006; this is expected to boost Sino-Nepal bilateral commercial exchanges, along with the completion of road construction from Safrubesi to Rasuagadhi, which will be the second highway linking Tibet with Nepal.

     The Chinese have always trusted the institution of monarchy in Nepal as a stabilizing force. Mao Tse Tung had honored King Mahendra to stand by his side as he reviewed the October 1st parade in Tianneman Square during the early sixties. King Gyanendra interacted with, among others, Vice President Hu Jintao, regarded as the future leader of China. It is this continuity from one generation to another, and a hassle-free relationship based on total trust between the leaders of the two countries, that is the backdrop to this visit in particular, and between China and Nepal in totality.