70 Years of Nepal-China Relations – A Journey Towards Future

Nepal and China share a relationship that spans centuries, rooted in geography, culture, and mutual respect. However, the modern diplomatic ties between these two nations were formalized on August 1, 1955. This marked a significant chapter in bilateral relations that have now remained in an excellent state for the last 70 years.

As of April 7, 2025, this milestone offers an opportunity to reflect on the evolution of Nepal-China relations over the past seven decades and to envision their trajectory into the future. Defined by mutual respect, deepening economic cooperation, and tremendous goodwill, this partnership has endured historical shifts and geopolitical complexities, and has been navigated prudently to set ambitious developmental goals for a dynamic and vibrant future.

The establishment of diplomatic relations in 1955, guided by the Five Principles of Peaceful Coexistence (Panchsheel), marked a new era of political and economic engagement, especially after Nepal’s own journey to democracy in 1951, and China’s foundation as the People’s Republic in 1949.

Historical Foundation

Modern Nepal-China relations stand on the firm base of cultural relations. The historical foundation of Nepal-China relations predates their formal diplomatic establishment, with cultural exchanges dating back to the 5th century AD. Figures like Nepali monk Buddha Bhadra, who contributed to Buddhist scholarship in China, and Princess Bhrikuti, who married Tibetan King Songtsan Gampo in the 7th century and influenced the spread of Buddhism in China, exemplify early ties. The 13th-century journey of Nepali artisan Araniko, who constructed the White Stupa in Beijing, further cemented cultural bonds. These exchanges, facilitated by the Himalayan proximity, laid the groundwork for goodwill that modern diplomacy built upon.

Milestones in the Relationships 

The first major milestone in this relationship came with the resolution of border issues. In 1960, Nepal became the first neighboring country to sign a boundary agreement with China, followed by the ratification of the Sino-Nepal Boundary Treaty in 1961. This agreement delineated a 1,414-kilometer-long border, fostering stability and trust in political relations. Throughout the 1960s and 1970s, Nepal pursued a policy of equidistance between China and its southern neighbor, India. 

High-level visits, such as those by King Mahendra and Prime Minister B.P. Koirala to China in the past, reinforced a balanced and interest-based foreign policy. Infrastructure projects like the Kathmandu-Kodari Highway, completed with Chinese assistance in 1967, symbolized the beginning of practical cooperation.

Economic Relations

Economically, the relationship has grown significantly over the decades. China’s support initially focused on infrastructure — roads, bridges, and hospitals — aimed at enhancing Nepal’s connectivity with China’s Tibet Autonomous region and beyond. By the late 20th century, trade became a cornerstone, with China emerging as Nepal’s second-largest trading partner by the 2010s.

Bilateral trade reached NPR 183.09 billion in the 2019-2020 fiscal year, though heavily tilted toward imports from China. The 2016 transit agreement, signed during Prime Minister KP Sharma Oli’s visit to China, allowed Nepal access to Chinese ports, reducing its dependence on India — a move spurred by the 2015 highly controversial disruption at the border. Tourism also flourished, with over 150,000 Chinese visitors to Nepal in 2018, bolstered by visa fee waivers and direct air links to cities like Lhasa and Chengdu.

Evolving Relations

The 21st century introduced new dimensions to this practical partnership, notably through China’s Belt and Road Initiative (BRI), which Nepal joined in 2017. Projects like the proposed Kerung-Kathmandu railway promise to transform trans-Himalayan connectivity, though progress has been slow due to confusion about funding and Nepal’s preference for grants over loans.

President Xi Jinping’s 2019 visit to Nepal and visits by Nepal’s President Vidya Devi Bhandari to China in the same year elevated ties to a “Strategic Partnership of Cooperation,” emphasizing development and prosperity. Recent agreements, such as those signed during Prime Minister KP Sharma Oli’s 2024 visit to China, including Nepal’s inclusion in the Friends of the Global Development Initiative, underscore a deepening economic and strategic alignment.

Geopolitically, Nepal’s position between India and China has shaped its conduct of foreign relations. While India remains Nepal’s largest source of foreign direct investment, China’s share has grown, particularly since 2015. China’s support for infrastructure and Nepal’s backing of the one-China principle regarding Taiwan and Tibet reflect mutual accommodation.

Future 

Looking beyond 70 years, Nepal-China relations appear poised for further expansion. The trans-Himalayan multi-dimensional connectivity network, encompassing roads, railways, and digital infrastructure, and people-to-people contacts, could reshape regional trade dynamics, benefiting both nations. Nepal’s aspirations for tourism development, hydropower, clean energy systems, healthcare, and agricultural development align with China’s technological and financial capabilities, promising mutual gains. Cultural exchanges, bolstered by institutions like the Confucius Institutes and sister-city relationships, will likely strengthen people-to-people ties. Yet, challenges remain: Nepal must navigate its trade deficit with China, ensure sustainable financial management under BRI projects and maintain its non-aligned stance, and strive to become a land-linked nation between the Sino-Indian geography.

Conclusion

In conclusion, the 70-year diplomatic journey of Nepal and China reflects a blend of historical affinity, pragmatic cooperation, and strategic foresight. As both nations stand at the cusp of a new era in 2025, their relationship holds the potential to transcend geographical barriers, fostering a partnership that balances development with sovereignty. By leveraging past successes and addressing present hurdles, Nepal and China can chart a future of shared prosperity, proving that even the mighty Himalayas cannot hinder enduring friendship and ambition.