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By P. R. Pradhan

As Nepal and China marked the 70th anniversary of diplomatic relations in 2025, the occasion offered more than ceremonial significance. It provided a timely moment for reflection—on how far the relationship has come and, more importantly, on how much potential remains unrealized. With the two countries now entering the 71st year of formal ties, the question Nepal must ask itself is whether it has truly leveraged this partnership in the national interest.

Despite decades of friendship, Nepal’s engagement with China has often been marked by hesitation and policy inconsistency. The Budhi Gandaki Multipurpose Project is a prime example. Once awarded to a Chinese company under a BOOT model, the project was later reclaimed by the government with assurances that it would be built domestically. Years on, the river remains untapped. Meanwhile, the public continues to bear a 15 percent additional tax on petroleum imports in the name of financing the project, with little to show in return. This prolonged inaction has fueled suspicions that political actors may ultimately steer the project toward Indian involvement.

Such uncertainty reflects a deeper strategic dilemma. Former Prime Minister Sher Bahadur Deuba’s statement that Nepal should avoid assigning large hydropower projects to China—out of concern that India would not purchase the electricity—reveals how external considerations often overshadow domestic priorities. Rather than focusing on expanding internal consumption and industrial use of power, Nepal’s policymakers remain fixated on export approvals from across the southern border.

This export-centric mindset is also evident in the energy sector’s leadership. Claims of success in electricity exports to India have received far more attention than efforts to stimulate domestic demand. Experts have repeatedly warned that selling electricity at prices below production cost is economically unsustainable. Some, such as water resources specialist Ratna Sansar Shrestha, argue that using surplus electricity for high-value activities like data centers or bitcoin mining could generate significantly higher returns. Others, including Dipak Gyawali, emphasize that energy-led industrialization at home should be Nepal’s priority.

A similar pattern of missed opportunity is visible in aviation. Pokhara and Bhairahawa international airports remain largely underutilized due to India’s reluctance to provide additional air routes. Himalayan Airlines has been denied permission to fly to Indian destinations, reportedly due to Chinese involvement. At the same time, six Chinese-manufactured aircraft, including two donated by China, have remained grounded at Tribhuvan International Airport for years. Though technically operational, insiders suggest geopolitical pressure, rather than safety concerns, has kept them idle—while the government has failed to offer a decisive solution.

Over the past seven decades, China has transformed itself from an under developed country into a global economic and technological power. President Xi Jinping’s Belt and Road Initiative was designed to share infrastructure, connectivity, and development opportunities with partner countries. Yet Nepal has not been able to translate these offers into tangible gains, largely due to a lack of strategic vision and political resolve.

China’s vast market presents significant opportunities for Nepal—ranging from agricultural exports and herbal products to light manufacturing and assembly plants under joint ventures. President Xi’s vision of transforming Nepal from a landlocked to a “land-linked” country could be economically transformative. However, reluctance within Nepal’s political and bureaucratic establishment continues to impede progress.

As an India-locked nation, Nepal inevitably faces geopolitical pressures. But excessive dependence and a persistent fear of displeasing external powers have constrained independent decision-making and weakened economic prospects. A confident, balanced foreign policy—one that safeguards sovereignty while pursuing national development—remains elusive.

Seventy years of Nepal–China relations should serve as a reminder that friendship alone does not deliver prosperity. What matters is how that relationship is managed. Nepal can no longer afford indecision and policy paralysis. Learning from China’s development experience and engaging pragmatically, without hesitation or fear, may be one of the most critical steps toward securing Nepal’s economic future.