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Nepal asks China to forgive airport loan it cannot repay
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Nepal asks China to forgive airport loan it cannot repay

The Chinese embassy in the capital Kathmandu did not immediately respond to a request for comment.

If Beijing agrees to the request, it will be a further sign of the strengthening of relations between the country’s new government and China.

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In July, Nepal’s main communist party joined forces with the Nepali Congress, the largest party in the country’s parliament, to form a coalition government led by KP Sharma Oli, who has built a reputation for resisting the influence of India, Nepal’s neighbor to the south and a regional rival of China, during three previous stints as prime minister.

His administration has wasted no time in cozying up to Beijing. On Thursday, he overturned a ban on TikTok, the popular social media app owned by Chinese tech giant ByteDance, imposed less than a year ago by his predecessors.

On the same day, Nepal also said the two countries had agreed to a series of development projects, including two to upgrade highways connecting to the Chinese border. They also agreed to build integrated checkpoints along the Nepal-China border.

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Nepal’s economy, which relies heavily on foreign remittances and tourism, has struggled to recover since the COVID-19 pandemic. The international airport in Pokhara, a picturesque city in the foothills of the Himalayas, was seen as a way to boost tourism and revive the economy.

But so far, the airport has failed to attract a single commercial international flight, largely because India has refused to grant permission to its airlines to fly in and out of Pokhara. This has led to fears that the airport would not generate enough revenue to repay the loan from the Export-Import Bank of China. Nepal is expected to begin repaying the loan in 2026.

At the same time, there are two investigations into the airport construction. Nepal’s Commission for the Investigation of Abuses and Authority is investigating allegations of corruption by the Chinese construction company to compromise construction quality to maximize profits. Nepalese officials are also accused of taking bribes in awarding the contract to CAMC. A separate parliamentary committee has been set up to investigate possible irregularities in the construction.

CAMC did not respond to a request for comment on the investigations.

Binoj Basnyat, a retired Nepalese general who works as a researcher at Rangsit University in Thailand, said China would likely convert the loan into a grant because it wanted to build a strong relationship with Nepal’s Communist Party. He also noted another benefit to China by agreeing to the request.

“The investigation into the corruption allegations will come to an end soon,” Basnyat said. “No one will talk about it anymore.”

This article originally appeared in The New York Times.