This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 001326 
 
SIPDIS 
 
LONDON FOR POL/RIEDEL 
 
E.O. 12958: DECL: 07/07/2012 
TAGS: PREL PTER NP CH
SUBJECT: NEPAL'S KING JOURNEYS TO CHINA SEEKING HELP IN 
TIME OF CRISIS 
 
REF: A. KATHMANDU 1314 
 
     ¶B. KATHMANDU 953 
 
Classified By: Ambassador Michael E. Malinowski, Reasons 1.5(b),(d) 
 
¶1. (C) Summary.  Statements against Nepal's Maoist insurgents 
and "anti-China activities" can be expected during the first 
visit of Nepal's King Gyanendra to China.  A leading Nepali 
business leader accompanying the monarch hopes to strike 
deals that will help reduce Nepal's sizable trade deficit 
with China.  In recent weeks new Sino-Nepalese accords on 
travel and foreign exchange have taken effect.  Gyanendra 
will likely press for additional aid and work to reassure 
Beijing that stability can be reestablished quickly in his 
country.  End Summary. 
 
Nepal's New King to Beijing 
--------------------------- 
 
¶2. (U) Nepal's King Gyanendra Bir Bikram Shah travels to 
Beijing July 9 on a state visit hosted by Chinese President 
Jiang Zemin.  It will be only his second visit abroad since 
becoming King thirteen months ago; he returned from his 
first, to India, June 28 (Ref A).  (Note:  Gyanendra's 
brother, the late King Birendra, paid three official visits 
to China, the last time in early 2001 just three months 
before his death.  Birendra also toured China unofficially on 
seven other occasions.  End Note.) 
 
¶3. (U) The King will keep a busy schedule according to 
reports in Nepal's official press, stopping first in Beijing 
for meetings and to visit "science and technological 
centers."  Gyanendra departs the PRC from Shanghai July 15. 
In between, Nepal's monarch plans to travel to the 
northeastern city of Dalian--stopping at the Dalian Mounted 
Policewoman Training Base--and to the Three Gorges Dam site 
in central Hubei Province. 
 
Focus on Maoists and Other "Bad Elements" 
----------------------------------------- 
 
¶4. (C) As he did in Delhi, Gyanendra will try to assure his 
Chinese hosts that Nepal has made strides in its campaign 
against the Maoist insurgents.  China's Ambassador to Nepal 
Wu Congyong has made strong statements against the 
"anti-government" Maoists--singling out their misleading use 
of Chairman Mao's name (Ref B)--and similar rhetoric can be 
expected from Beijing.  Gyanendra will likely reiterate to 
the Chinese his previous statements against "anti-China 
activities" in Nepal.  Meeting with a visiting Chinese 
military delegation in September 2001, Gyanendra stated he 
"would not allow anti-China activities to be conducted within 
Nepalese territory."  He repeated this statement during an 
April meeting with a delegation of leaders from the Tibet 
Autonomous Region. 
 
Nepal Hopes for Economic Benefits 
--------------------------------- 
 
¶5. (U) Sharat Singh Bhandari, Nepal's Health Minister, and 
Ravi Bhanta Shrestha, President of the Federation of Nepalese 
Chambers of Commerce and Industry (FNCCI), will accompany the 
King to China.  Shrestha told us that he plans to meet with 
his counterpart from the All-China Federation of Industry and 
Commerce (ACFIC); the two organizations will sign a 
memorandum of understanding "to promote mutual cooperation." 
 
¶6. (SBU) Nepal currently runs a USD 150 million trade deficit 
with China, and Shrestha hopes that gap can be closed.  China 
has offered to build new roads to promote cross-border trade, 
including one through the former kingdom of Lo Monthang in 
Mustang (on Nepal's northern border) and another leading 
northwest out of Kathmandu.  (Note:  A new road from the 
Tibet border to Lo Monthang--built by Nepali villagers with 
local funds--has already increased cross-border trade 
dramatically in the region.  Romi Gauchan, Member of 
Parliament for Mustang, told us recently that the road acts 
as a substitute for supply lines leading from south Nepal 
made impracticable by the Maoist insurgency.  End Note.)  A 
lack of port facilities and exportable products will continue 
to disadvantage Nepal, however.  At present, nearly 98 
percent of Nepal's exports to China enter the country by land 
through Tibet, while slightly less than half of Chinese goods 
entering Nepal come via Tibet. 
Tourism, Foreign Exchange Accords Take Effect 
--------------------------------------------- 
 
¶7. (U) In China the King and his hosts will likely highlight 
the memoranda of understanding on tourism and Yuan 
convertibility that were signed by Nepal and China in recent 
months and have already taken effect.  Nepal agreed to permit 
Chinese travel agencies to bring Chinese tourists into the 
country while China designated Nepal as an authorized 
destination for Chinese tourists as of June 1.  Then in 
mid-June the two countries' central banks agreed to accept 
Chinese currency into their bilateral bank settlement system. 
Comment 
------- 
¶8. (C) In New Delhi the King worked hard to reassure the GOI 
of his commitment to constitutional democracy and pressed the 
Indians for help fighting the Maoists.  Gyanendra will likely 
ask for China's support too, but at the same time try to 
reassure them that stability can be restored in Nepal at an 
early date. 
MALINOWSKI