Implications of the Dragon’s Rise for South Asia: Assessing China’s Nepal Policy

China has always been an important neighbour to Nepal which has otherwise historically been heavily influenced by India. The ‘rise of China’ has created a more outward-looking Middle Kingdom and so its influence in Nepal has significantly increased within the last decade. As a consequence, Nepal is experiencing growing interest from China. This article aims to give some historical background to Sino-Nepalese relations and to measure the most recent impact of the ‘rise of China’ on Nepal, particularly on its economic, military and political fronts. This is followed by a broader look at China’s policy towards Nepal, also taking into account China’s overall strategy towards South Asia. Apart from China’s relationship with India, the issues of stability in Tibet as well as Tibetan refugees within Nepal remain important factors for the Sino-Nepalese relationship even to this day.