China Power | Diplomacy | South Asia

Beijing’s Nepal Anxiety

Chinese analysts say that while the core concerns of a “close neighbor,” i.e., China, are sidelined, Kathmandu is making every effort to accommodate the ‘”distant relative,” i.e., the U.S.

Nepal’s Minister for Foreign Affairs Shisir Khanal shakes hands with his Chinese counterpart, Wang Yi, at a meeting in Beijing, China, on June 15, 2026.

“A close neighbor is better than a distant relative,” Chinese Foreign Minister Wang Yi told his Nepali counterpart Shisir Khanal during their recent meeting in Beijing. Although Wang named no country, given the context in which he made the statement, the top Chinese diplomat could not have been more direct: he was talking about China (the “close neighbor”) and the U.S. (the “distant relative”).

The Nepali foreign minister was in Beijing to reassure the Chinese that Nepali soil would not be used for anti-China activities. In recent times, Chinese officials have repeatedly voiced their discontent with what they see as growing U.S. “interference” in Nepal, which, they believe, is aimed at minimizing China’s presence in the country.

China grew uneasy last September, when K.P. Sharma Oli was forced out as the Nepali prime minister — just a week after his much-hyped China visit. Both as prime minister and as leader of the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML), Oli was someone who had cultivated close ties with Beijing. His China visit, among other things, was supposed to give impetus to the stalled Belt and Road Initiative (BRI) projects in Nepal.

Beijing was shocked when the rampaging Gen Z protestors literally chased Oli away from his official residence. Suddenly, the Chinese, who like to do business with strong power centers, faced the unenviable prospect of dealing with a completely new set of political actors in Nepal. What added to their unease were widespread rumors that the Americans had a big role, first in the protests, and then in giving shape to the interim government of Sushila Karki.

Amid this sea-change in Nepali politics, more and more top American officials started visiting Kathmandu and openly casting doubts on the Chinese intent behind pushing the BRI projects. They spoke of the rights of the Tibetan refugees in Nepal. These high-level American visits have continued even after the election of Balendra Shah as the new prime minister following the general elections in March 2026.

Nepal watchers in China believe that while even the core concerns of a “close neighbor” are sidelined, the government in Nepal is making every effort to accommodate the “distant relative.” The Americans have requested Nepal to “enhance support” for Tibetan refugees in the country. Starlink, the satellite internet provider founded by Elon Musk that the Chinese see as a part of the U.S. defense industry, has been in discussions with officials in Kathmandu to allow the company to operate in Nepal. American officials have also openly questioned........

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