We oppose the US’ “coercive diplomacy”, China said in its reaction to Nepal’s MCC row - a stalled $500 million grant program that threatens to derail Nepal-US ties as Beijing accuses Washington of pressuring Kathmandu at the “expense of Nepal’s sovereignty and interests.”

China’s reaction came as senior US officials have reportedly warned that "future assistance" and "broad ties" will be "affected" if Nepal failed to ratify the Millennium Challenge Corporation-Nepal Compact, a 500 million aid program to improve the country’s transmission and road infrastructure, signed in 2017. [Read More]

On Friday, in its weekly press conference, China, while appreciating the world’s development cooperation with Nepal, said such cooperation should be based on “full respect for the will of the Nepalese people”. It should come with “no political strings attached.”

“We oppose coercive diplomacy and actions that pursue selfish agenda at the expense of Nepal’s sovereignty and interests,” Chinese Foreign Ministry’s Spokesperson Wang Wenbin said on Friday.

The Nepal government led by Prime Minister Sher Bahadur Deuba of the Nepal Congress is in favor of getting the deal ratified. However, he is under immense pressure from his allies not to table the bill. Doing so, now, threatens his government.

Significantly on Friday, Nepal’s ruling coalition decided not to table the MCC agreement after the CPN Maoist-Centre, the biggest party in the coalition, threatened to withdraw support from the Deuba government. [Read More]

Signed in 2017 during Deuba’s earlier tenure, the MCC deal ran into trouble after China-leaning Left parties protested against it. They claim certain sections of the agreement would drag the country into big-power politics, and term it detrimental to the country’s national interests.

Amish Mulmi, an expert on Nepali foreign policy and the author of the book “All Roads Lead North: Nepal’s turn to China” , accused Left parties of doublespeak.

“In the four-and-a-half years since the treaty was signed by Nepal, it has been extraordinary to witness the Communist prevarication, doublespeak, and the large-scale mobilization against the MCC,” Mulmi wrote in his weekly column in The Kathmandu Post.

He further wrote, “If the grant is against the national interest as the Communists charge, they must have the courage to face whatever comes next as Sri Lanka did, as our baampanthis [communists] like to often recall the island nation’s experience with grants.”

Since its signing, the $500 million aid—not loan—program was marred in what seems like a well-orchestrated disinformation campaign with the involvement of both external and domestic players.

Last year, Nepal intelligence agencies had reportedly alluded to the role of Chinese intelligence agencies in the disinformation campaign. The US State Department believes that the disinformation campaign has been “actively fomented or encouraged or funded or facilitated” by China, said The Hindustan Times. 

A few weeks ago, US Assistant Secretary of State Donald Lu in separate calls to senior Nepali leaders, including Prime Minister Sher Bahadur Deuba, had reportedly conveyed his displeasure over the government’s inability to counter negative propaganda against the grant program.

Prime Minister Sher Bahadur Deuba, however, continues to claim the agreement is in the favor of Nepal and he is committed to ratifying it.

(SAM)