By Dr. Upendra Gautam

When the streets of Kathmandu boiled over and a Gen-Z uprising forced a change in the fossilized political system, Beijing’s first public posture was predictable: congratulate the new interim leadership, stress continuity of relations, and publicly emphasize non-interference. China’s Foreign Ministry and state media promptly congratulated the interim prime minister and offered to work with Kathmandu — classic diplomacy aimed at preserving channels and calm.

Alongside this official civility, Chinese analysts and regional desks were quietly on alert. Commentaries in the region note that Beijing treats Nepal as a strategic partner for development and cooperation — particularly in prioritized BRI projects and security logistics — and therefore watches instability closely. Unrest is a risk to projects and political access, but also an opportunity to see which Nepali actors seek credible continuity in Nepal’s China ties. Beijing’s public calm and pragmatic posture — protecting core economic and security ties, refreshing friendship, and avoiding rhetoric that could push ulterior motives— reflects a mature policy toward Kathmandu.

As for K.P. Sharma Oli — long seen by many Western-leaning observers as one of the more pro-China Nepali leaders because of his tactical push for deeper ties — Beijing’s studied reaction to his government’s fall was notably forward-looking. State outlets described the episode as an internal political development, underscoring Beijing’s preference for long-term stability and access over public grandstanding about political change.

Outside Interference

Beijing has long viewed foreign NGOs, grant programs, and certain Western initiatives in the region as vectors of outside interference. Historically, when Nepal ratified U.S.-linked projects that increased American aid interests, Chinese officials consistently warned about external influence in Kathmandu’s domestic politics. They argue that such influences are often designed to disrupt and manipulate native social movements to politically realign a partner state.

On the specific allegation that U.S. NGOs orchestrated the Gen-Z unrest, open-source reporting shows competing narratives. Independent outlets and rights groups document long-term foreign engagement in Nepal — through training, funding, and media support — and observers note that such engagement can build civic capacities that are later mobilized for political purposes.

Neighbor’s Signals

India’s immediate public reaction combined concern for stability with offers of practical support. New Delhi telephoned Kathmandu’s new leaders, stressed peace, and framed itself as both a first responder and a reliable partner — a diplomatic script blending reassurance and reassertion in Nepali affairs. Indian observers note that New Delhi watches upheavals in Nepal not only for security and demographic risks but also for opportunities to consolidate political influence as power elements and factions realign.

In this context, the recent phase of cordiality and pragmatic engagement between China and India has introduced a subtle but significant layer to Nepal’s political transition. The relative thaw in Sino-Indian relations — expressed through resumed high-level dialogues, limited coordination in regional platforms, and calibrated border de-escalation — has temporarily reduced the sharp competitive pressure each exerts in Nepal. This has allowed both to adopt more restrained postures toward Kathmandu’s interim leadership. For Beijing, the bonhomie provides diplomatic space to safeguard BRI continuity without provoking India; for New Delhi, it offers reassurance that Chinese outreach in Nepal is more mutual development and cooperation-oriented than anything.

The Dalai Lama and officials of the “Tibetan Government-in-Exile” in India sent congratulatory messages to Nepal’s interim prime minister — an unprecedented move. Collectively, these gestures fed traditional regional geopolitical narratives. Organizations like Human Rights Watch often allege that China pressures Nepal to curb political activities by Tibetan refugees, raising domestic and international human rights concerns (2021). On the contrary, Nepali people basically view Tibetan residents as part of Nepal’s broader socio-cultural landscape and reject efforts to turn them into political tools.

During my visits to the Tibet Autonomous Region in 2004, 2006, 2016, and 2019, I observed Tibet’s transformation into a multidimensionally enriched strategic Trans-Himalayan gateway — opening foremost to Nepal, and then to the world.

System Debates

Debates about system change — toward either a presidency or a monarchy — have been amplified by political interest groups using instability to argue that the republican parliamentary system is failing. Recent months have seen pro-monarchy mobilizations and discussions of alternative systems. In Nepal’s context, constitutional tinkering for centralizing governance reforms often becomes politically attractive when elites return to promise “order” after upheaval. Nepal’s experience with China suggests that Beijing’s core interest here is not in any specific constitutional form but in a pro-people stability and trustworthy partner relations. Beijing prefers predictable institutions that protect its strategic partnership with Nepal and uphold Nepal’s independent choice of governance system.

Theater of Opportunity

When instability rises, a predictable cast of beneficiaries emerges:

• Domestic political entrepreneurs — royalists, populist independents, or party factions that can translate street energy into electoral or institutional power. They gain legitimacy and bargaining leverage.

• Security-minded elites and state actors — those who argue that “stronger executive” or emergency powers are needed to restore order — a classic path toward presidentialism or centralization.

• External patrons and investors — neighbors and great powers who can parlay instability into deeper leverage by providing security aid, emergency loans, or quick infrastructure deals in exchange for political influence. Both China and India have tools to do this. Beijing’s official line is Peaceful Coexistence. It applies aid, diplomacy, and economic linkages that provide leverage; New Delhi’s geographic and Hindu ties offer influence of a different kind.

Crucially, the “winners” with the most durable institutional value of Panchsheel as an organic principle offer that leverage which can convert short-term chaos into long-term structural change — parties that push constitutional reform, security institutions that expand powers, or external partners who lock in economic dependencies through infrastructure, loans, or training. Civil-society actors and ordinary citizens — the street drivers of the Gen-Z movement — typically gain a political voice but often lose out if institutions harden or if reprisals strengthen the security state.

Can Nepal?

In such a political environment, can Nepal preserve its sovereignty and territorial integrity? Yes — but only conditionally. Nepal’s sovereignty and territory remain resilient in both legal and practical terms. Neither India nor China wants open conflict at the expense of regional stability. Both Beijing and New Delhi have huge public security and financial incentives to avoid direct military or territorial confrontation.

At the same time, persistent internal instability creates vulnerabilities: if Kathmandu becomes financially or politically dependent on a single outside patron, or if constitutional change concentrates power in ways that sideline plural checks and balances, Nepal’s celebrated sovereign autonomy will shrink.

Nepal will likely remain formally sovereign and territorially intact, but its policy space may narrow if instability persists — meaning Nepal could become more of an observer than an actor. The actors most likely to benefit from induced instability are:

Domestic factions seeking stronger executive power (presidentialist, monarchist, or security-focused elite forces); and External patrons able to convert crises into binding diplomatic or economic footholds (through rapid reconstruction aid, security cooperation, or lucrative stabilization deals). Both India and China are positioned to gain leverage in different ways.

Protecting sovereign autonomy and territorial integrity, therefore, depends on three more possible political remedies:

i) a rapid return to inclusive, accountable governance that addresses youth grievances over jobs, corruption, and rule of law — with full enforcement of accountability at all executive, legislative, judicial and security levels;

b) broad, transparent international engagement that avoids exclusive dependencies while leveraging on comparative geo-economic connectivity and advantages; and

c) strong constitutional safeguards against the abuse of state power and monopoly over the use and exploitation of natural as well as governance resources.

The bottom line is, as Nepal’s founder King Prithvi Narayan Shah — whom Tibetans called Bana/Pana Lama (or Lord Narayana)— said, “The state is strong enough when the people are healthy enough.”