In the name of Tourism, China’s strategy to loot Nepal

The COVID has plunged global economy into deep recession. The countries around the world are restructuring economic reforms or issuing bailout packages to revive economies. With no breakthrough in sight for the vaccine, the countries dependent on service industry and tourism that are staring at dark future. One such country in India’s neighbourhood is Nepal, an underdeveloped economy, is highly dependent on tourism.

As the COVID stuck, the Nepalese tourism industry was in for a shock. The local tourism industry shut down completely and gradually began to realize the ill effects of depending on high volumes of tourists from China. There were no profits to sustain the dark times, as Nepal was in the thick of “zero dollar tourism”.

“Zero-dollar tourism” phenomenon is a tourism trend that started garnering attention earlier this decade. Nepal, in particular, has been facing the brunt of the increasing “Zero-dollar tourism”phenomenon, which is the most common in the context of Chinese tourism. In this mode of travelling, the Chinese tourists book their tours to foreign destinations with Chinese travel operators for significantly lower charges than independent bookings. To offset the large discounts, these operators make long stops at shopping centres, with whom they have ties. The operators, thus, make their profits along with the shop owners.

Prima facie, it is an ideal situation for all the stakeholders. However, it is pertinent to know that these shops and restaurants are mostly owned by Chinese-run businesses.

Moreover, with the rise in electronic transactions and FinTech options, most tourists prefer to pay using Chinese-owned electronic payment channels, like Alipay and WeChat Pay.As a consequence, the foreign currency conversion fees,which would have added to Nepal’s economy, are eliminated from the process. In a nutshell, the Chinese tourists pay Chinese travel operators and shop at Chinese-owned shops through Chinese payment channels. Thus, besides the visa and hotel costs, Nepal or the any destination country barely gets to benefit from the flocking Chinese tourists in the country.

Although there was a rising trend of Chinese tourists in the country before, Nepal’s dependence on China solidified post 2015 earthquake. The earthquake had wreaked havoc in Nepal’s infrastructure. Popular tourist destinations were also destroyed. This included the renowned Nautale Durbar Palace, which was resurrected by China. Little did Nepal know then that it was the beginning of Chinese invasion and expansion in a new fashion.

For anyone who had visited Thamel district (the tourist town in Kathmandu) last decade, will be left astounded to look at the mushrooming Chinese restaurants, hotels and shops in the erstwhile busy streets crowded with local traders and vendors. The small businesses owned by the locals have been bought by the Chinese investors, who have created a niche for themselves in the capital. Inevitably, the place has witnessed a complete flip in the demography of the district with an overwhelming portion of Chinese. It is safe to say that any Chinese tourist can visit there and feel just at home.

The two prime reasons for this enormous increase in Chinese investments in Nepal can be attributed to visa-less travel and cent per cent corporate income tax exemption for five years in the tourism industry when investing more than two billion Nepalese rupees. These ease in investments have contributed to China’s plan of global dominion, which starts by dominating Asia. Nepal, thus, plays a key role in China’s larger scheme of things.

“Zero-dollar tourism” is in a way capturing the Nepalese economy, by way of “Sinicisation” or “Chinafication” of the country. It is expanding the influence of Han Chinese culture, language, societal norms, ethnic identity and economic activities over the territory. This will, in turn, confer Chinese Government the power to leverage its influence in diplomatic forums, and therefore, control the country akin to its policy of “Debt-trap diplomacy.”

China is gradually capturing the Asian economies using multiple approaches. It is notoriously popular in the region to lend huge sums of money to lower-income economies at lower interest rates than prevailing in the market. This tempts the economies to fall prey to China’s “debt-trap diplomacy,” where the large sums of money lent to these economies become impossible for repayment by the latter. This vulnerability is then leveraged to militarize China by owning control over the bases and ports of these countries.

Realizing the growing menace of Zero-dollar tourism in the economy, Nepal banned the popular Chinese digital payment apps payments in May 2019. The Government categorized them as unregistered systems and held such payment channels illegal. This is a start. The ongoing pandemic and consequent suspension in all international travel may serve as an opportunity for Nepal to identify ways to reclaim its economy and country, in general, from the twenty-first century Chinese invaders masqueraded as curious tourists and benign investors.