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Nepal's Prime Minister Khadaga Prasad Sharma Oli's upcoming five-day visit to China, his first after re-election (December 2017), will see the two countries signing dozen of Memorandum of Understandings (MoUs) including the construction of a railway line connecting Kerung (Gyirong) in Tibet Autonomous Region (TAR) to capital Kathmandu (touted to be US$ 8 billion mega-project, an estimation) and one on energy cooperation. In recent years, Beijing has pledged US$ 8.3 billion to build roads and hydropower plants in Nepal even as Indian commitments remain at meagre US$ 317 million.

The newly re-elected Nepali administration has been sending signals that it's country desire to establish a more balanced position between China and India, following India’s 2015 decision to create and execute an economic blockade at Nepal's southern border over its treatment of the Madhesi minority.

A report carried by China Daily in August 2016 said the country has accumulated technology and experience to build a rail link between the TAR and the South Asian subcontinent via Nepal.

Kerung (Gyirong) is lying at the Nepal-China border stands at an altitude of 2,800 meters above the sea level. The mountain pass to Nepal lies at around 1,800 meters, making the railway geographically feasible. The railroad will cross into Nepal through Rasuwagadhi border point. The 106-kilometer-long Pasang Lhamu Highway already connects the Rasuwagadhi border to China from Galchi, setting a precedent for another link.

According to the most recent five-year-plan, the Xigaze-Kerung (Gyirong) Railway will enter into operation by 2020. Additional tracks are also planned from Xigaze to two more border towns by 2030 - Burang and Yadong.

Additional tracks are also planned from Xigaze to two more border towns by 2030 - Burang and Yadong.

In July 2017, Losang Jamcan, chairman of the TAR Government said that building railroads is the best way to open up Tibet to trade from South Asian countries, particularly the large Indian market.

The policy experts in India are seeing these developments as Nepal's way of choosing a new strategic partner in China. However, China is categorically denying such interpretations. On April 18, 2018, China's top diplomat State Councillor Wang Yi said he invited India to participate in connectivity projects between the three nations - China, Nepal, and India. He added, "We hope that such cooperation can contribute to the development and prosperity of all three countries."
In 2016-17, Nepal imported $6.1 billion worth of goods and services from India and exported only a little more than $400 million worth, making for a trade deficit of over $5.7 billion.

Tight-rope Diplomacy? Yes!

For Nepal, India’s unkept promises such as the Nepal's National Armed Police Force Academy, eventually being built by China and poor project track records in its territory, such as the India-funded road projects in southern Nepal or the high-profile hydropower project on the Mahakali river - led to the destruction of India's own credibility. And, the Madhesi related blockade was the tipping point, making Nepal suffer a serious energy crisis and was forced to turn to China for help.

"We can’t forget that we have two neighbors. We don’t want to depend on one country or have one option," Prime Minister Oli said to SCMP daily on February 28, 2018. "With a new constitution and completion of elections to the three tiers of government, we have completed our political transformation.

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