Will President Donald Trump give his Chinese counterpart Xi Jinping a gift? While Trump prizes unpredictability, Xi aims to position China as a force for global stability. Thus, there is a widespread assumption that China will rush to fill the vacuum left by an increasingly nationalist and isolationist United States.
The Chinese leadership has no interest in filling America’s shoes. Attempting to do so could cost China dearly just when it is undertaking a broader economic reorientation at home. The world may be tired of US interventionism – and, now, of <a href="https://nepalitimes.com/opinion/trump-s-first-month">Trumpian aggression</a> – but that does not mean it is ready to welcome an abstemious superpower.&nbsp;
China has studiously avoided becoming involved in major crises beyond its <a href="https://nepalitimes.com/editorial/trans-himalayan-handshake">immediate neighbourhood</a>. Though it has proposed global initiatives on ‘development’, ‘security’, and ‘civilisation’, and articulated a vision of multipolarity in which all countries are treated equally, its efforts to realise these goals have not gone beyond economic statecraft.
While foreign commentators debate what <a href="https://nepalitimes.com/here-now/what-is-xi-jinping-s-big-surprise">China’s vision </a>entails – with some describing it as a potentially benevolent hegemon, and others as a malevolent one – Chinese authorities and intellectuals are more immediately concerned with weathering the storm that Trump has unleashed.
Viewed from outside, China’s core <a href="https://nepalitimes.com/here-now/staying-neutral-in-a-us-china-confrontation-8qni2ij1">national interests</a> seems straightforward: to replace the US as global leader. But pursuing that role may contradict other core interests, such as maintaining regime legitimacy and security, orchestrating a continuous rise in living standards, and reunifying Taiwan with the mainland.&nbsp;
These goals might best be served by maintaining a cold peace with the US, rather than embracing conflict with it.
Having watched the US, China knows all too well that being a <a href="https://archive.nepalitimes.com/news.php?id=4815">global superpower </a>would inevitably draw it into regional conflagrations that it would prefer to avoid. But China also knows that it has benefited massively from the relatively stable world economy that the US and its allies helped bring about.
China needs to retain enormous amounts of resources and manpower domestically to tackle its biggest challenges. Chinese leaders must <a href="https://nepalitimes.com/news/nepal-s-bubble-economy">manage an economy</a> that is no longer driven primarily by property development and exports, while preparing for the possibility that one of its largest trading partners could descend into total isolation.
Trump’s ‘Liberation Day’ tariffs and escalatory duties in response to Chinese countermeasures were a wake-up call. Whatever happens in the trade war, China urgently needs to rebalance its economy by stimulating greater domestic demand.
While Chinese leaders have long acknowledged the need for such a rebalancing, they have been slow to follow through with the necessary policies. Public messaging notwithstanding, they have continued to prioritise industrial output over living standards, and capital investment over consumer spending. But the prospect of losing one of its biggest export markets should change this calculation.
Read also: <a href="https://nepalitimes.com/opinion/turning-point-in-us-india-relations">Turning point in US-India relations</a>, Shashi Tharoor
Similarly, China has an interest in building resilient supply chains for critical technologies in order to circumvent US chokepoints. A significant share of national resources has already been redirected toward promoting domestic innovation.&nbsp;
With the Sino-American rivalry intensifying over the past decade, Chinese leaders have come to regard domestic innovation as a strategic necessity.
Beyond boosting domestic innovation, China is eager to seize opportunities to set the global governance agenda for emerging technologies.&nbsp;
Its recent successes in <a href="https://nepalitimes.com/here-now/nepal-needs-to-be-more-intelligent-about-ai">AI</a> – most notably <a href="https://nepalitimes.com/here-now/artificial-censorship">DeepSeek</a>’s release of low-cost models that rival those from top US developers – have created a strong impetus for China to amplify its voice. China’s message – that a handful of rich countries should not be able to monopolise the technologies that will determine everyone’s economic future – undoubtedly resonates with many around the world.
During the post-Liberation Day staring contest with the US, China convened an impromptu gathering of the all-powerful Politburo and Chinese ambassadors stationed abroad. The purpose was to assess China’s relations with its neighbours, and the stature of those in attendance spoke to the sense of crisis that had swept through the country’s top leadership.&nbsp;
More to the point, the meeting confirmed that China’s strategic orientation remains focused on its own region – not the global context.
Beijing remains fully committed to maintaining strong ties with the Kremlin, viewing Russo-Chinese alignment as a geographical and strategic necessity. The two countries’ 4,209km land border gives China more than enough reason to work with Russia.&nbsp;
China’s ultimate focus is not Russia but its long-term rivalry with the US. An axis with President Vladimir Putin’s regime might well offer a workable (if imperfect) solution to the containment strategy that America has been pursuing against China.
Likewise, China has been de-escalating tensions with India, another large, nuclear-armed neighbour. Both know that the structural and historical strains on their relationship – characterised by an obvious power imbalance and mutual mistrust – will not be easily eliminated. But both also know that predictable, stable ties will yield big benefits over time, especially in a new multipolar order.
PAX SINICA
Beyond managing relations with its immediate neighbours, China has sought to mobilise the Global South behind reforms to multilateral institutions.&nbsp;
When Chinese leaders and diplomats speak of ushering in an ‘orderly multipolarity’, they mean an international order in which the non-Western world has much more clout. Hence, China is a strong advocate of the recent BRICS expansion, and of proposals to redistribute voting shares within Western-dominated international financial institutions.
China has also sought to shape the agenda at United Nations-affiliated institutions where the US historically has had less influence, such as at UN Trade and Development and the South Centre. It can assume a limited leadership role without directly confronting the US and the rest of the G7.&nbsp;
China does have a foreign-policy interest in subtly countering US influence in the developing world, which is why it builds large-scale infrastructure and addresses long-ignored development needs there without making any demands about democracy, human rights, and accountability.&nbsp;
Instead of offering security guarantees, China offers roads and bridges. In exchange, it can secure access to critical raw materials and open new markets for its state-owned enterprises and private companies at a time when the US and Europe are closing their doors.
China did broker a modest rapprochement between Iran and Saudi Arabia, and its Global Security Initiative <a href="https://www.iiss.org/research-paper/2024/10/the-global-security-initiative-chinas-international-policing-activities/" target="_blank">aims to</a> foster international cooperation in counter-terrorism, cybersecurity, biosecurity, and emerging technologies.
But in the case of the <a href="https://nepalitimes.com/opinion/how-to-agree-an-armistice-in-ukraine?%2F=">Russia-Ukraine </a>and<a href="https://nepalitimes.com/opinion/mortality-in-the-gaza-israel-war"> Israel-Hamas</a> wars, it has avoided taking direct responsibility, let alone providing any security guarantees. Of course, China’s self-proclaimed neutrality on the war in Ukraine has not gone unchallenged.&nbsp;
In Gaza, China has criticised the US for supporting Israeli Prime Minister Binyamin Netanyahu’s agenda of continuing the war. But unlike Iran – which China relies on for oil – these other flashpoints have been kept at arm’s length.
Read also: <a href="https://nepalitimes.com/editorial/world-wars">World wars</a>
China would face three big challenges in pursuing even partial or limited global leadership. First, given America’s accelerated withdrawal from international affairs, China might struggle to sustain its commercial engagement with many parts of the world. After all, the US wants to impose drastic costs on those who do business with China, and it may well get its way.
Second, China cannot avoid engagement in dangerous security situations forever. Sooner or later, it will have to develop a truly global foreign policy. In fact, simply putting its own Global Security Initiative into practice would require it to do much more heavy lifting, not only in setting the agenda but also in terms of deploying security personnel and resources. America may be retreating, but that does not mean it will sit idly by and watch China try to increase its own influence.
Third, China still needs to orchestrate a domestic economic rebalancing – a process that will have enormous global consequences. Shifting from export-led growth to greater domestic consumption will take years, and the push to rebalance may run up against China’s ambition to remain a global manufacturing powerhouse.&nbsp;
The latter objective is already causing tensions with Europe and some developing countries whose domestic manufacturers are struggling to compete with Chinese national champions (such as the electric-vehicle maker BYD).
Even as its economy continues to grow, China will remain a largely self-centered and reluctant superpower. Unlike the US, its domestic political economy calls for a more restrained foreign policy, focused primarily on its immediate neighbours and commercial opportunities in the Global South.
As the world grapples with the decline of US power and the shift toward multipolarity, China will increasingly become the centre of gravity in the global economy. The rivalry between a political and military superpower and an economic one will be dangerous for everyone. Both must tread carefully to prevent economic warfare from escalating into a conflict that all would regret.
&nbsp;©Project Syndicate&nbsp;
Yu Jie is a senior research fellow on China in the Asia-Pacific Program at Chatham House.

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What China wants

When two nearby cyclones rotate around each other, merging into a larger and more dangerous storm, meteorologists call it the Fujiwhara effect.
Is something like this developing in Northeast Asia?
Recent decades have seen an increase in what analysts call ‘transnational conflicts’ – that is, conflicts with local, regional and international dimensions. Ukraine is one example, Taiwan is another. It is difficult to address these multi-level conflicts, since responses are needed at all three levels.
Read more: <a href="https://nepalitimes.com/opinion/comment/ukraines-lessons-for-sandwiched-nations-like-nepal">Ukraine's lesson for sandwiched nations like Nepal</a>, Bhaskar Koirala
Recently, transnational conflicts in different parts of the world have started to merge together. Responding to these emergent global conflict complexes will be a still more daunting challenge.
East Asia has a raft of unresolved conflicts, left over from the postwar settlement of 1945. &nbsp;The legacy of the Korean war fuels continuing tensions and fears of war. The unresolved dispute over the <a href="https://www.businessinsider.com/china-taiwan-war-us-no-allies-2024-7">status of Taiwan </a>leads to dangerous military activity around the island. The territorial and maritime disputes in the East and South China Seas involve clashing nationalisms but also broader strategic concerns over supply lines and resources.
Events in these hotspots were always calibrated against the state of relations between the <a href="https://nepalitimes.com/here-now/40-years-after-the-sino-us-thaw">US and China</a>, China and Japan, Japan and North Korea. But it is only recently that they have become connected with conflicts in Europe.
The Russian invasion of Ukraine in 2022 rang warning bells in policy circles in East Asia. Policy-makers feared that President Xi might be emboldened to act against Taiwan following Putin’s lead.&nbsp;
The Ukraine conflict came closer with North Korea’s decision to supply the Russian Federation with weapons, and closer still when President Putin concluded a defence pact with Kim Jong-Un in June 2024. The Russian Federation and North Korea pledged to provide mutual assistance should either be attacked. Kim Jong Un offered “full support and solidarity to the Russian government, army and people in carrying out the special military operation in Ukraine” (CBS News, 19 June 2024).&nbsp;
Meanwhile, on the Korean peninsula, Kim Jong Un warned his people to prepare for war, and ordered the army to undertake <a href="https://asia.nikkei.com/Editor-s-Picks/Interview/China-s-drills-appear-to-be-rehearsal-for-Taiwan-invasion-U.S.-admiral">‘actual war drills’</a>, while proposing to change the constitution to refer to ‘completely occupying, subjugating and reclaiming the R.O.K. and annexing it as a part of the territory of our ​republic in case a war breaks out on the Korean Peninsula.’
At the same time, the West has not yet learned the lesson that NATO expansion is dangerous, and NATO is preparing to expand its activities into the Indo-Pacific region and north east Asia. <a href="https://apnews.com/article/nato-japan-south-korea-australia-new-zealand-6c3d9aa6fccc1253ca99ee140073f95c">NATO is developing links with South Korea and Japan</a> and invited them to attend its last two summits.
Staff talks between NATO and the Japanese Self Defence Force have identified areas of cooperation in responding to security challenges, cybersecurity and military planning. A NATO office was to have been opened in Tokyo, though France objected to this plan. &nbsp;
NATO sees its involvement in the area as a necessary response to the challenges to the ‘rules-based order’ coming from China, North Korea and Russia. The NATO summit of July 2023 declared that “The People’s Republic of China’s (PRC) stated ambitions and coercive policies challenge our interests, security and values.’ The NATO Secretary General followed this up by saying that security is now globalised and security crises in one part of the world reverberate in another.
In April, before attending the NATO Summit for the first time as a South Korean leader, President Yoon condemned any ‘attempt to change the status quo by force’ in the Taiwan Strait, and promised that South Korea would cooperate with the international community to prevent such an outcome. The Japanese strategic community also believes that Japan would be drawn in, under this contingency. The Korean and Taiwan and Japan-China conflicts are thus potentially interlinked.
China and North Korea see the collaboration between NATO and Japan and Korea as a US-led effort to bring NATO into the region. In North Korea’s case, it is seen as part of a US strategy to overthrow Kim’s regime. In China’s case, NATO expansion is seen as a "grave challenge" to global peace and stability. "Despite all the chaos and conflict already inflicted, NATO is spreading its tentacles to the Asia-Pacific region with an express aim of containing China."
The US is deliberately emphasising the interconnections between the European and Indo-Pacific theatres as part of its strategy of building alliances with democratic partners. "We are also growing the connective tissue between US alliances in the Indo-Pacific and in Europe…allies in the Indo- Pacific are staunch supporters of Ukraine, while allies in Europe are helping the United States support peace and stability across the Taiwan Strait," notes National Security Adviser Jake Sullivan.
NATO has addressed the possibility that it might become involved in conflict in the Taiwan Strait, specifically in the situation where US territory and forces came under attack, which would trigger Article 5.
China also objects to the participation of NATO members’ naval units in Freedom of Navigation operations in the Taiwan Straits.
How can the risks of transnational conflicts coming together into global conflict complexes be defused? Second-track dialogue meetings can convene interlocutors from different arenas and bring them together to discuss all aspects of a situation.&nbsp;
But though dialogue efforts are vital, they cannot bear the weight of conflict prevention alone. Restraint, trust-building and moderation on the part of political leaders is also needed. So is a climate of domestic political discussion that replaces security fears and nationalism with mutual understanding and an appreciation of our common humanity.
This article was issued by the Toda Peace Institute and is being republished from <a href="https://toda.org/global-outlook/2024/turbulent-currents-merging-storms-northeast-asia-outlook-june-july-2024.html">the original</a> with their permission.
Hugh Miall is Emeritus Professor of International Relations at the University of Kent, and Chair of the Conflict Research Society, the main professional association for peace and conflict researchers in the UK. He is a Senior Research Fellow at the Toda Peace Institute.

Turbulent Currents, Merging Storms

The current wave of anti-Chinese sentiment in the United States has been building for years. It started in the early 2000s, when US policymakers first raised national-security concerns about Huawei.&nbsp;
China’s national technology champion, the market leader in developing new 5G telecommunications equipment, was accused of deploying digital backdoors that could enable Chinese espionage and cyber-attacks. US-led sanctions in 2019 stopped Huawei dead in its tracks.
But Huawei was just the start. The US has since spiraled into a full-blown outbreak of Sinophobia – a strong word that I don’t use lightly. Phobia is the extreme or irrational fear or dread aroused by a particular object or circumstance.
Indeed, China threats now seem to be popping up everywhere. The US government has imposed export controls to cut off China’s access to advanced semiconductors – part of its concerted effort to stymie the country’s <a href="https://nepalitimes.com/opinion/artificial-intelligence-vs-human-stupidity">artificial-intelligence</a> ambitions.&nbsp;
The Department of Justice has just indicted a state-sponsored Chinese hacking group for allegedly taking aim at critical American infrastructure. Much has also been made of the purported risks of Chinese EVs, construction and dock-loading cranes and now TikTok.&nbsp;
Nor are the fears confined to technology. Several years ago, I wrote about America’s trade-deficit disorder, whereby the US government misdiagnosed a multilateral problem – a trade deficit with more than 100 countries – as a bilateral problem and punished China with tariffs.&nbsp;
Others have warned that Washington’s exaggerated claims of the Chinese military threat have, at times, bordered on hysteria as tensions mount in the South China Sea and the Taiwan Strait.
Of course, all this is only half the story. China is equally guilty of its own strain of Ameriphobia – demonising the US for its accusations of Chinese economic espionage, unfair trading practices, and human-rights violations.&nbsp;
Both phobias are related to the profusion of false narratives that I address in my most recent book, <a href="https://www.amazon.com/Accidental-Conflict-America-China-Narratives/dp/0300259646">Accidental Conflict</a>. Notwithstanding this tit-for-tat blame game, my point now is different:&nbsp;
There is good reason to worry about an increasingly virulent strain of this phobia spinning out of control in the US. Not since the red-baiting in the 1950s, has America so vilified a foreign power.&nbsp;
Back then, a two-pronged congressional approach, led by US Senator Joseph McCarthy of Wisconsin and the House Un-American Activities <a href="https://nepalitimes.com/review/the-destroyer-of-worlds">spearheaded an assault on alleged Communist sympathisers</a> under the guise of protecting Americans from Soviet espionage and influence.
Today, another politician from Wisconsin, Representative Mike Gallagher, has led the charge as chair of the House Select Committee on the Chinese Communist Party which, in an eerie parallel to the McCarthy era, has leveled a series of unsubstantiated charges against China. While Gallagher will retire from Congress in April, his legacy will live on, not just as co-sponsor of a bill that could lead to an outright <a href="https://nepalitimes.com/news/rattled-by-criticism-nepal-bans-tiktok">ban of TikTok</a>, but also as the leader of a congressional effort that has cast a long shadow over those who support almost any form of engagement with China.
The litany of US allegations is a manifestation of unproven fears wrapped in the impenetrable cloak of national security. Yet there is no “smoking gun” in any of these cases. Instead, it is all about circumstantial evidence of an increasingly aggressive China. At work is an unmistakable bipartisan politicisation of deductive reasoning.
For example, US Secretary of Commerce Gina Raimondo, a leading Democrat, <a href="https://www.wired.com/story/china-cars-national-security-threat-investigation/" target="_blank">asks us</a> to “imagine” what could happen if Chinese EVs were weaponised on American highways.&nbsp;
FBI Director Christopher Wray, a Donald Trump appointee and member of the conservative Federalist Society, warns that Chinese malware could disable critical US infrastructure “if or when China decides the time has come to strike” (emphasis added).&nbsp;
And a former US counterintelligence officer has compared sensors in Chinese-made cranes to a Trojan horse. There are many what ifs and mythical parallels, but no hard evidence on intent or verifiable action.
What is it about China that has generated this virulent US reaction? In Accidental Conflict, I stressed that the US has long been intolerant of competing ideologies and alternative systems of governance. The claim of &nbsp;American exceptionalism seemingly compels us to impose our views and values on others. That was true in the Cold War, and it is true again today.
Read also: <a href="https://nepalitimes.com/here-now/staying-neutral-in-a-us-china-confrontation">Staying neutral in a US-China confrontation</a>, Project Syndicate
I also argued that excessive fear of China conveniently masks many of America’s own self-inflicted problems. Bilateral trade deficits may well reflect the unfair trading practices of individual countries – China today, Japan 35 years ago – but broad multilateral trade deficits stem more from chronic US budget deficits that lead to a deficiency of domestic savings.&nbsp;
Similarly, the technology threat is not only an outgrowth of the alleged Chinese theft of US intellectual property, it also represents, as I stressed in Accidental Conflict, America’s underinvestment in research and development and shortfalls in STEM-based higher education. Rather than taking a long, hard look in the mirror, it is politically expedient for US politicians to blame China.
As Sinophobia feeds on itself, fear starts to take on the aura of fact, and the dangers of accidental conflict with China intensify. By acting on these anxieties, America risks inciting the very outcome it wants to deter. Fears over Chinese aggression &nbsp;in Taiwan are a case in point.
The US can and must do better. Rather than excusing the excesses of Sinophobia as justifiable reactions to the China threat, US leaders need to avoid the low road and think more in terms of being the adult in the room. Global leadership requires nothing less.
In his first inaugural address in 1933, US President Franklin Roosevelt underscored the ultimate risk of this dangerous pathology with the memorable line, “The only thing we have to fear is fear itself.”&nbsp;
Amid today’s Sinophobic frenzy, that message is well worth remembering. © <a href="http://www.project-syndicate.org/" target="_blank">Project Syndicate</a>&nbsp;
Stephen S Roach is a faculty member at Yale University and the author of the forthcoming Accidental Conflict: America, China, and the Clash of False Narratives (Yale University Press, November 2022).&nbsp;

US afflicted with full-blown Sinophobia

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161152/636d1e879c7e80680e0af414jpeg.jpg" alt="" width="1500" height="934"/><figcaption>Photo: Stefan Fussan/Wikipedia</figcaption></figure>In just four decades, China’s economy has achieved an unprecedented level of wealth and development, and, until recently, its upward trajectory of economic growth and prosperity seemed set to continue.But as political pressures and the coronavirus push many countries – particularly the United States – to embrace more nationalist policies, the heyday of globalisation soon could be replaced by a post-pandemic era shaped by national-security concerns and border controls.This is not good news for China, which would prefer that the world maintain the economic openness it achieved in recent decades. For that reason, China had been working hard to align its economic and trade activities with international rules and norms. But now it seems that China must prepare for a future characterised by higher trade barriers and restrictions.To this end, China’s 14th Five-Year Plan makes clear that the country will seek to reduce its dependence on external demand. The “dual-circulation strategy” announced in the plan instead emphasizes reliance on the country’s huge population. China also <a href="https://www.nepalitimes.com/latest/china-builds-digital-and-medical-silk-roads/" target="_blank" rel="noopener noreferrer">plans to invest heavily</a> in cutting-edge sectors, such as artificial intelligence and semiconductors, and work to achieve self-sufficiency in core technologies.Outsiders are deeply suspicious of China’s moves to increase state control over its economic development, such as imposing new regulations on tech companies and capital markets. They fear that the country is prioritizing its geopolitical objectives over the quest to build a market economy. Some even worry that China will return to the development model that predominated before Deng Xiaoping launched the country’s “reform and opening up.”These fears are overblown. China is unlikely to return to a state-controlled economy or enact isolationist policies. Instead, the increased role of the state in the economy and a shift toward self-reliance should be interpreted as a response to a changing – and, at times, hostile – external environment.This shift likely would have happened even if Sino-American relations had not deteriorated as they have, owing to China’s enormous population. Recognizing the potential of its own massive internal market, China’s leaders have long sought to increase domestic demand as a hedge against external changes. As for technological progress, a larger population implies more talent and higher returns for innovation.But, amid the retreat from globalization, China’s advantage may be even greater. In a 2018 paper, Klaus Desmet, Dávid Krisztián Nagy, and Esteban Rossi-Hansberg showed that in a world of restricted cross-country trade and migration, countries with large populations can provide <a href="https://www.journals.uchicago.edu/doi/10.1086/697084?mobileUi=0">more opportunities</a> to increase economic output through internal trade and specialization.The most populous countries are not necessarily the richest today, the authors note, largely because of migration. But if barriers to migration grow high enough, populous countries will outpace smaller countries in innovation, even if the latter are richer. Because long-run growth is driven by improvements in technology, this translates into a major economic advantage for countries with larger populations. This outcome highlights just how self-defeating America’s turn inward is: it’s clear that America’s success is thanks to migration and globalization.To be sure, China is facing strong demographic headwinds: its birth rate <a href="https://www.bloomberg.com/news/articles/2021-11-23/china-s-record-low-birth-rate-underscores-population-challenges">dropped to a record low</a> in 2020. But the effects of this decline will take a few decades to have an impact. China’s demographics today give the country a significant advantage over the US in terms of human capital for at least the next 20 years. Projections of China’s future growth suggest that if China makes the most of this advantage – as it seems poised to do – the US will find it all but impossible to hamper China’s economic progress. Rather than thwarting China’s ambitions, America’s policies will encourage China to continue hedging its bets, including by rethinking its national-security strategy and shifting more resources to its science and technology sectors. In the worst decoupling scenario, the world’s two largest economies will end up dominating their own technology-supply systems, each with its own rules and standards.This is a distinct possibility. But visionary politicians should appreciate how much more could be achieved on both sides if the countries instead worked together. The US would be far better served by seizing the opportunities China’s rise creates. And, while China’s large population affords it a major advantage in a deglobalized world, it still has a lot to learn from more advanced economies, beginning with the US. China remains a developing economy, after all, with a per-capita GDP amounting to just one-quarter of the OECD average.More broadly, while a more populous country has a large domestic market to fall back on, that is no substitute for access to the global market. Likewise, ties to the outside world, including the sharing of knowledge and ideas, invariably accelerate technological progress. And an open and decentralized economic system that encourages market-led activity is far more conducive to the iterative process vital to the commercialization of innovation.It’s clear that China has much to gain from a more open global economic system. China’s leaders have emphasized that they are not abandoning the path of market-led development and returning to a closed economic model – and there is no reason to believe otherwise.Read Also:<a href="https://www.nepalitimes.com/latest/climate-covid-19-and-china/" target="_blank" rel="noopener noreferrer">Climate, COVID-19 and China</a>, Rastraraj Bhandari© Project SyndicateZhang Jun, Dean of the School of Economics at Fudan University, is Director of the China Center for Economic Studies, a Shanghai-based think tank.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161152/636d1e8a9c7e80680e0af415jpeg.jpg" alt="" width="90" height="110">

China charts 2022 and beyond

The monsoon has got bad press because Nepal’s tourism operators actively told visitors to avoid <a href="https://nepalitimes.com/opinion/managing-the-monsoon?%2F">the rainy season</a>. It is time to change that. The reason can be found right here in the vast alpine meadows of Central Nepal where this time of year you can walk on velvet grass of pastures abloom with delicate pink, red and yellow flowers as the mist rolls up the valley. There is no sound except the hum of bumble bees. &nbsp;&nbsp; There are dozens of places across high Nepal called Chaurikharka, which means yak pasture. But this particular Chaurikharka in Rukum East located at an altitude of 4,000m stands out for its serene beauty, rustic charm and bucolic setting. There is just the occasional chime of <a href="https://nepalitimes.com/here-now/when-yaks-go-so-does-culture">yak bells</a> in the distance, and the sharp whistle of herders corralling sheep. &nbsp;&nbsp; The grass shoots are so fragile that one hesitates to step on them, the rounded ridges appear and quickly vanish in waves of mist. With the<a href="https://nepalitimes.com/here-now/before-the-next-monsoon"> arrival of monsoon</a>, these meadows are a soothing shade of green dotted with millions of <a href="https://nepalitimes.com/review/the-anatomy-of-a-flower?%2F=">multi-coloured flowers</a>. Until very recently, it took a week or so to hike up to places like Chaurikharka, but with the expansion of the road network even to these far-flung mountains in the lap of Dhaulagiri, they are much more accessible. It is just a three-hour uphill from the Mid-Hill Highway on the border between Baglung and Rukum East.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16.jpg" data-media-id="editor_4" data-image-id="20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Purists would say that such easy access devalues the sanctity of these remote high meadows, but it also means more people will be moved to treasure the experience, appreciate <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">the value of nature </a>so they can take steps to protect it.&nbsp; To be sure, the <a href="https://nepalitimes.com/here-now/deadly-monsoon-in-nepal-turns-deadlier">monsoon season can be challenging for road travel</a>. The roads are rough even at the best of times, and in the monsoon they become muddy and treacherous, often blocked by<a href="https://nepalitimes.com/news/monsoon-deluge-in-nepal"> landslides</a>. But that could be precisely the kind of adventure that the more intrepid visitors crave. Improved road connectivity has already made Chaurikharka and places like Badimallika &nbsp;and other sacred lakes in the mountains of western Nepal popular with domestic tourists. What is driving this traffic is the urge to go to exotic new places and share videos and selfies on social media. Several of Nepal’s travel vloggers have visited Chaurikharka and popularised the place, enticing followers on TikTok or YouTube to retrace their footsteps. But even as they become more popular, these fragile and once-remote places should be protected from over-tourism.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446.jpg" data-media-id="editor_8" data-image-id="20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446" data-rendition-name="original" width="1083" height="699" loading="lazy" alt="Visit Nepal in the monsoon NT"> </figure>  <h2>INCREASING FOOTFALL</h2> Chaurikharka is located in Bhume Rural Municipality of East Rukum, near the scenic valley of Dhorpatan in Baglung district. Even in the <a href="https://nepalitimes.com/banner/monsoon-culture">middle of the monsoon</a>, there is a steady stream of Nepali hikers trooping to these high pastures – especially during festival days like Saune Sankranti which this year was on 17 July and actually marks the auspicious beginning of the monsoon here. “This year the rains have not been as heavy and there have been some clear mornings when we could see everything from Dhaulagiri to Machapuchre,” says Khageswar Bhandari, who trekked up here from the road. “The flowers, the greenery and the snowy mountain views make this an incredibly unique place.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9.jpg" data-media-id="editor_10" data-image-id="20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9" data-rendition-name="original" width="2048" height="1152" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Chaurikharka is worthwhile to get to in any season, but it has a different charm during the monsoon. Word has spread and because it is now easy to get to from Baglung or even Pokhara, people have been flocking here.&nbsp; “Holidays and Saturdays see the largest crowds, with up to 500 visitors every day,” says ward chair Mankaji Pun of Bhume.&nbsp; There was a time not too long ago when local herders brought sheep, goats, cows, buffaloes, horses, and mules to graze here during the monsoon. Although there are still livestock around, animals have been replaced by visitors taking selfies. Read also: <a href="https://nepalitimes.com/here-now/the-monsoon-and-nature-s-arithmetic">The monsoon, and nature’s arithmetic</a>, Tom Robertson Ward Chair Pun says infrastructure development is his main priority. A foot trail to Chaurikharka was built last year by the Tourism Division Office in Kohalpur, but access via the Raniwas-Koipa road section still remains challenging.&nbsp; “If we get more budget, we can improve the road and facilities to make Chaurikharka the main tourist attraction of this region,” says Bhume Municipality Chair Hom Prakash Shrestha. “After that, we hope to promote Chaurikharka as a top tourist spot.”&nbsp; Economic activity is also picking up with the arrival of visitors, but there seems to be a need to manage the makeshift sheds made of corrugated sheets that spoil the beauty of the place. Tea shops and lodges are also available but facilities are basic. Kuldeep Neupane took a three-day trip from Ghorahi in Dang to visit Chaurikharka recently, and says: “This is an ideal trip to make a quick getaway and let nature recharge your mind and body. And it is much more fun with a tent, to watch the sunrise over the Himalaya or the mist blowing in.”

Visit Nepal in the monsoon

Two weeks ago, Prime Minister KP Sharma Oli announced jubilantly on social media that Nepal had achieved a historic annual growth of 81.8% in exports. He was right. Nepal’s trade did take a great leap forward compared to last year. But the dramatic rise was mainly due to processed soya bean oil.&nbsp; However, Nepal does not produce the edible oil it exports. In fact, the soya and palm oil that make up 44% of total exports are imported from Southeast Asia and South America, and simply re-exported, mostly to India.&nbsp; Under the SAFTA (South Asian Free Trade Area) Agreement, Nepal can export products to India duty-free if it has at least 30% value-added. Nepal’s traders have taken advantage of SAFTA even though the edible oils they export do not reach that value addition threshold. “The 30% value addition requirement is often only on paper,” says former commerce secretary Purushottam Ojha. “It is clear that simply packaging edible oils in Nepal does not fulfil the terms of the trade agreement.” Prime Minister Oli is aware of this, and even called Nepal’s export figures “fake” at an earlier event. The government is relying on other iffy figures to suggest that Nepal’s economy is strong and getting stronger. For example, the value of imports rose by 13.25% in 2024-25 compared to the previous fiscal year.&nbsp; Some of it was due to a jump in electric vehicle imports worth Rs 31.76 billion, but mostly it was because more wholesale soya oil was imported to be re-packaged and sold in India. The very fact that the government boasts about increased imports is an indication of how much it relies on taxing them for revenue. Touting such trade figures cannot be the basis to claim an economic rebound.&nbsp; “A jump in the value of imports can be interpreted as an increase in purchasing power, but it is not evidence of a stronger economy,” says economist Keshav Acharya. “Even though imports have increased, Nepal's domestic production and productive capacity have not improved.” Nepal Rastra Bank's semi-annual economic activity study report shows that industrial production was down in the first six months of the last fiscal year. This despite an increase in the number of new industries registered and investment commitments. Out of the Rs70.2 billion proposed foreign investment, Nepal received only Rs17.9 billion last year.&nbsp; Meanwhile, the rate of capital formation was limited to 24% last year, which is lower than the year before, suggesting that new investment, job creation and economic expansion all declined. If domestic production does not improve in relation to this year’s inflated trade figures, the outflow will put pressure on foreign exchange reserves like it did three years ago. At that time, Nepal borrowed from the IMF under its Extended Credit Facility Program to kickstart the economy.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f.jpg" data-media-id="editor_0" data-image-id="2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f" data-rendition-name="original" width="1633" height="723" loading="lazy" alt="Nepal's bubble economy NT"> <figcaption>Source: NEPAL RASTRA BANK</figcaption> </figure>  The macroeconomy is on firm footing with foreign exchange reserves at a comfortable Rs2,520 billion in May, up 23% from last year. This was largely due to remittances, and partly due to a falling NPR exchange rate. Real estate transactions and the stock market index have also been climbing as a result of government policies to revive the sector.&nbsp; However, former executive director of Nepal Rastra Bank Nar Bahadur Thapa cautions: “This is not organic growth, it is the result of deliberate policy decisions to relax rules on real estate and stock markets transactions.” In reality, the sharp rise in land prices have increased the cost of production, and excessive monetisation of the real estate has become the main source of Nepal’s economic woes. The central bank has announced a slew of new policies, shifting the terms of loan repayment for industrialists and entrepreneurs, reducing interest rates, and injecting more working capital — all designed to inject adrenaline into the real estate and stock market sectors.&nbsp; When he was governor, Mahaprasad Adhikari made several financial reforms during the latter half of his tenure to stimulate the economy, including tightening credit flow.&nbsp; By the last fiscal year, additional financial reforms had resulted in a credit expansion rate of around 8%. As the pace of credit expansion slows, real estate prices have started to fall. This is actually beneficial to the economy, because it lays the foundation for improvements in land-related entrepreneurship, production, and the construction sector. Just because real estate and the stock market transactions increase, it does not indicate an economic turnaround — especially when manufacturing and productive sector continues to languish.&nbsp; “It is foolish to believe that real estate and the stock market have magically revived our economy. Agriculture employs more than half of the population, but it is in decline. Investment in the productive sector has not increased, and job creation has not increased.” Two years ago, Nepal’s industrialists, business leaders, and political leadership predicted a recession amidst a sluggish business, declining market demand, large-scale job loss, and a shrinking real estate and share market.&nbsp; Still, the economy grew by 3.36% in fiscal year 2023/24. In fact, Nepal’s economy has grown nominally over the last two decades even when all sectors of the economy are in decline.&nbsp; Says Keshav Acharya: “The growth in trade, real estate, and the stock market are bubbles. The real economy remains stagnant.”

Nepal’s bubble economy

The final investigation report on the crash of a Saurya Airlines jet on 24 July 2024 at Kathmandu airport has revealed flaws in the carrier’s technical operation procedures, poor monitoring by the Civil Aviation Authority of Nepal (CAAN) and gaps in the airport’s emergency response. Eighteen people including a child were killed, and only the captain survived as the plane plunged seconds after takeoff, crashing within the airport perimeter. This was the latest in a series of aircraft accidents in previous years, and further tarnished Nepal’s already poor aviation safety record and contributed to the country being retained in the EU’s air safety list. &nbsp;&nbsp;&nbsp; The circumstances in the Saurya crash were different from the Yeti Airlines crash in Pokhara in January 2022 that killed all 72 on board, and two Tara Air crashes in February 2016 and May 2022 on approach to Jomsom that together claimed 45 lives. However, all four tragedies were a result of negligence of carriers and crew, failure to follow procedures, regulatory slackness, and overconfidence. The Saurya crash, especially, was a glaring example of how an ailing airline broke its own rules to allow passengers, including non-employees, a joy ride to Pokhara on a maintenance ferry flight. CRASH REPORT The Final Investigation Report prepared by the Aircraft Accident Investigation Commission and released on the first anniversary of the crash last week carried a long list of rules that were ignored or broken, and of regulatory failure. The first mistake was to cram spares, tools and inflammable chemicals needed for the aircraft’s C-Check in Pokhara into the cargo hold flouting its own ground handling procedures.&nbsp; There was no check-in of passengers, some of whom were not even employees – even though regulations say only flight and maintenance crew should be on board a maintenance positioning flight. Many brought their own luggage into the plane and stored it unsecured in the cabin. There was no flight attendant to give a safety briefing to passengers. The load and trim charts given to the flight crew were rough estimates, and the total takeoff weight of the plane was 18,300kg plus or minus 200 kg. That would still have been all right, but there was a glaring mistake in the speedchart Saurya pilots were using to calculate the minimum takeoff speed (known as VR), and it had been wrong ever since the 21-year-old aircraft entered service with the airline in 2017. FAULTY DATA&nbsp; The Commission probed Flight Data Recorder inputs from previous takeoffs of the Canadian-built CRJ200-LR in 2023-2024 and found that the undetected error in the speedchart had caused the plane to pitch up at an abnormal rotation rate at least 18 times on previous takeoffs.&nbsp; Any rotation rate more than 3°/sec is regarded as unusual. But on at least two occasions, this aircraft with tail number 9N-AME had rotation rates of 5.8°/sec and 5.5°/sec, the second one was when the pilot who survived was flying in March 2024.&nbsp; On this particular day, the plane’s rotation rate was 6.5°/sec, causing it to go into a deep stall soon after takeoff, the Commission report said. Essentially, the plane was not flying fast enough down the runway to take off safely.&nbsp; It is not yet clear whether excess weight, unsecured luggage, wrong centre of gravity were also factors, but relying on a faulty speedchart for the given takeoff weight, the captain flying pulled back on the yoke before the plane had reached takeoff speed and at a pitch angle that was too steep. The investigation report says the plane then went into a deep stall and started banking right with the stick shaking. At this point, the flight officer on the right hand seat is heard on the cockpit voice recorder saying: “Whoa, whoa, whoa. Sir, Sir, Sir…” It then banked left before the pilot flying turned the plane sharply to the right again in an evasive action to avoid the parking aprons of the international and domestic terminals. Had he not done so, there would have been a disaster of a much greater magnitude at Kathmandu airport that day. The plane scraped the runway with its right wingtip, collided with a container having helicopter spare parts, and plunged into a gully east of the runway, exploding in a fireball. The investigation also noted that the impact forces seemed to be survivable for some occupants. The fire trucks took unnecessarily long to reach the site even though it was inside the airport perimeter. The absence of an ICAO-standard runway strip, inadequate rescue drills, lack of training, and a blocked emergency service gate leading to the crash site were cited as other factors. &nbsp;&nbsp; <h2>Timestamp of a Disaster</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725.jpg" data-media-id="editor_0" data-image-id="20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725" data-rendition-name="original" width="778" height="826" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:10:34 - The Saurya Airlines CRJ200 on the takeoff roll from runway 02. It had a takeoff weight of about 18,300kg, but the pilot’s speedcard had a previously undetected mistake about the minimum takeoff speed. 11:10:55 -The plane with tail number 9N-AME goes into deep stall soon after takeoff because it does not have enough speed to lift its weight. The plane also has an abnormally steep nose-up attitude.&nbsp; 11:11:03 - Without enough speed to generate lift, the plane banks right, then left and right again in CCTV photos taken from the domestic apron (below). If it had not banked right, it could have hit the aprons and terminal buildings. Seen parked is Saurya’s other CRJ200 with tail number 9N-ANM.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd.jpg" data-media-id="editor_1" data-image-id="20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd" data-rendition-name="original" width="770" height="555" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:11:08 - The plane scrapes the runway with its right wingtip, and falls into the gully. The captain is thrown off the left side of the cockpit and survives. 11:11:15: Plane explodes in a fireball inside the airport perimeter. Firefighters take time to reach the site because of lack of access road and a blocked gate. Read the full investigation report <a href="https://www.tourism.gov.np/files/9N-AME%20AIC%20Final%20Report.pdf">here</a>.

Flouting rules caused Saurya tragedy

American artist Peter Makela was in Nepal in 2022 on a Fulbright scholarship when he experienced the Matya festival in Patan in which devotees made the rounds of the city’s shrines.&nbsp;
He joined the procession, walking through 2,600 stupa and 140 bahal of the town. That immersion left a lasting impression.
As part of Gallery Mcube’s international residency program in Patan, he put his inspiration to canvas in the exhibition Yala Yatra: Walking, Working, Worshipping. The exhibition also coincides with this month’s Matya festival.&nbsp;
Makela has visited Nepal often in the past 11 years but he mostly stayed in and spent his time around Boudha. “This time I stayed in Patan, put the sites I wanted to visit on my map, and off I went,” he tells us. “Each of my artwork is inspired by the stupas and shrines in Patan that I visited.”
The stupa and Ganesh are recurring motifs in his watercolours, and the elephant gods are located in chaityas — reflecting the interplay and blending of the Hindu and Buddhist faiths in Kathmandu Valley.&nbsp;
The stupas and Ganesh are painted in vivid red, yellow, blue and green against abstract backgrounds meant to represent the sky.
“I use the sky as a backdrop because the sky has no border,” says Makela. “The four colours represent the four elements, the different Buddha families and also lights bouncing off of a rainbow.”
The use of just four colours for all the artwork stands out, and combined with the absence of heavy canvases, frames or stands render Makela’s art striking in its simplicity.&nbsp;
The Ganesh is always holding something and the art also portrays the elephant god’s sacred vehicle, the mouse.
While his vibrant stupas and Ganesh reflect the tangibility of Patan’s tradition and heritage, it is as if the backdrops with their shades of grey and red and yellow capture the soul of the city’s shrines.
“If you look closely, there is a sense of form and formlessness at the same time,” he says.&nbsp;
Makela walked 108 kora around the shrines during his exploration of the town, and in the process developed a spiritual connection with Patan’s heritage and traditions.&nbsp;
The exhibition connects with visitors on a deeper, more spiritual, level as well. And with it, they feel a sense of pride as well as the need to urgently preserve Patan’s heritage for future generations.
“Peter’s inclination and approach towards Nepali art and culture is fascinating, and it reflects in his work,” says Mcube curator Manish Lal Shrestha, whose international artist residency program promotes Nepal’s cultural heritage. &nbsp;&nbsp;
Yala Yatra: Walking, Working, Worshipping
1-5 August&nbsp;
10AM-7PM
Gallery Mcube, Patan

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