Basic Economies and Politics behind Nepal China rail link
It has been a dream for many Nepalese to see train in Nepal coming from China since a long time and this dream has started to take shape rapidly after a long unofficial blockade by India.
The purposed railway map is marked blue in the following figure:
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Purposed Railway from China to Nepal. (unedited image source: stratfor.com) |
As you can see this railway is going to link the populated part of India with the populated part of China. It will mean a lot to the economics and politics of India, China and Nepal.
Nepal:
This railway will distribute Nepal's international trade dependency between China and India. Currently, Nepal has huge dependence on India for Trade. Such distribution of dependency will prevent India from imposing future blockades on Nepal. Or at least, blockade will have much smaller effect than the one we faced after 2015 earthquake in Nepal.
Nepal has a huge possibility in generating hydro electricity and electric trains can be good consumers.
Nepal consumes a huge amount of China made goods. These goods come all the way around through Pacific Ocean and then India. Eventually, these goods become much expensive than they would be if they were to imported directly by railways. Furthermore, Nepal lying in between China and India's populated regions, could be an important trade link between these giant countries. This would give Nepal some more power in controlling Asian economy. Nepal would also receive more Buddhist tourists who would come to Lumbini; the birth place of Lord Buddha.
China:
China also has major strategic vision behind this railway. Even though, India and China are bordered, there is no proper linkage through land between these giants. The political and sentimental will often becomes a hurdle. In such case, Nepal could play an important role in being a trade mediator through land. China can expand its trade control in south Asia. As China has more productions of goods than India, for now, China would benefit more than India.
Current trade link between China and India is marked green:
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Current trade link between China and India. |
India:
A lot of Indian intellectuals pressure Indian government to carry out protective policies in order to compete with cheap Chinese products. So, often Chinese investment is discouraged in Nepal by India. This would be a pure stupidity and short sightedness. Stupidity, in a sense that protective policy will make Indian economy fragile disabling the consumer's purchasing power and Indian products incompetent. Short sightedness, in a sense that India is now the new powerhouse of cheap labor and this should be used in order compete with the Chinese productions in the future. Protective policy will hamper such possibility. India should rather focus on what it can produce better than China and take advantage of railway to search market along Nepal, Tibet and all the way to populated part of China.
Throughout the history of the world, economy has driven politics and India should rise above sentiment as soon as it can. The trade between China and India is increasing and it will further increase. Such interdependence between giants of Asia means a peaceful and united Asia.
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