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Xinlu Liang

On the windswept plains just south of Tibet’s second-largest city, the towering smart inspection systems and automated cargo gantries of a brand-new international land port gleam under the plateau’s high-altitude sun.
Official road maps predict the multibillion-yuan project in Shigatse will process up to 300 trucks daily by the end of 2030 – loading cargo off trains and onto the trucks that will take goods to their final destination. It will also allow the authorities to carry out customs checks away from the region’s international borders, which straddle the Himalayas.
However, on a quiet afternoon when the SCMP visited in late June, the Shigatse International Land Port processed just five trucks, according to Tenzin Namgyal, general manager of Shigatse Chengyou Supply Chain Management Co, the port’s operator.
The port is key to Beijing’s plans to transform Tibet into a southward-facing geoeconomic “bridgehead” by building up the region’s economic connections with South Asia.
But analysts say that achieving this goal will require overcoming extreme geography and navigating political tensions, which are set to rise with the looming reincarnation of the Dalai Lama.
The vulnerability of this remote, high-altitude corridor was seen this week when deadly landslides and flash floods hit the Nepal-Tibet border, causing widespread devastation.
The disaster underscores the challenges of China’s long-term “southbound strategy” – a billion-dollar geopolitical lifeline that Beijing is determined to build through the brutal terrain of the Himalayas.


The vision
When it opened in August 2024, the Shigatse land port cut the time that cargo takes to travel from China’s coastal regions to Nepal’s capital, Kathmandu, from 45 to 15 days.
According to Tenzin Namgyal, the port had attracted 160 enterprises, generated 2,500 jobs and facilitated some 120 million yuan (US$17.8 million) in trade by mid-June this year.
The government’s increasing focus on Tibet’s trade potential is a sharp contrast from how Beijing has approached the region in recent decades, seeing it as a restive frontier where security always came first.
The winds of change began at the 7th Central Tibet Work Forum in 2020, which was chaired by President Xi Jinping. While Xi emphasised national security and “combating separatist activities”, he also called for major infrastructure projects to be completed.
The 14th five-year plan – which covered the country’s economic and social goals from 2021 to 2025 – called for Tibet to be built into an “important channel for opening up to South Asia”.
“Developing Tibet as a premier gateway to South Asia is a top-level strategic decision within the Belt and Road Initiative,” said Zhang Shigao, director of the Institute of Contemporary Studies at the state-run China Tibetology Research Centre, arguing that this pivot would unlock vast market potential, drive economic growth and deliver shared benefits to both China and South Asia.
Sun Yong, director of the West China Frontier Research Institute, said Beijing’s concept of “national security” had expanded from a singular focus on military defence to an “interconnected network of defence, ecology, culture and development”.
“The ultimate baseline for long-term frontier defence is the stabilisation and enrichment of the borderlands,” said Sun, also former Communist Party chief of the Xizang Academy of Social Sciences. Xizang is the official Chinese name for Tibet.
By elevating the livelihoods of frontier ethnic minority communities – including the Monpa and Lhoba populations in the disputed Zangnan, or Arunachal Pradesh, area – economic development had replaced the obsolete “economy versus security” binary to become recognised as a vital pillar for long-term border stability, he said.
This playbook might sound familiar to those who have followed government policy in Xinjiang, another autonomous region to the north that has been riven by ethnic tensions and alleged human rights abuses, which Beijing stridently denies.
In the past 13 years, the vast, landlocked region’s historic trading connections with Central Asia and Europe have been revitalised, positioning it as the “core area of the Silk Road Economic Belt” initiated by Xi in 2013.

Nepal’s counterweight
While Xinjiang bordered on eight countries about which China has “few security concerns”, Tibet’s situation was totally different, said Barry Sautman, a specialist in China’s ethnic minorities and professor emeritus at the Hong Kong University of Science and Technology.
“Most of its external border is with India, which continues to contest its frontiers with China; Nepal, which is friendly to China, but not politically stable; and Bhutan, effectively India’s protectorate, with no formal diplomatic relations with China,” he said. Tibet also shares a relatively short, remote border with Myanmar.
Sun noted that while China-Europe freight trains gave Xinjiang access to a vast market, Tibet’s infrastructure capacity was far weaker, as was consumer demand in its neighbouring countries.
Last year, while Xinjiang saw over 10,000 transcontinental trains, Tibet saw a mere 12 freight trains travel from coastal Yiwu to Shigatse, carrying a total cargo value of just 230 million yuan.
Tibet’s foreign trade data has also experienced a dramatic boom-and-bust cycle. From 4.87 billion yuan in 2019, total trade value peaked at a record high of 12 billion yuan in 2024, but plunged to 8.5 billion yuan last year, customs data show.
Among Tibet’s four neighbours, Nepal is most willing to tango.
The landlocked nation shares a 1,400km (870-mile) border with Tibet and observers say it views Beijing as an indispensable counterweight to reduce its economic dependence on New Delhi.
The country has historically been hit by multiple devastating, months-long economic blockades imposed by India, most notably in 1989 and 2015, which cut off supplies of fuel, medicine and food.
In 2018, China announced that it would build what it calls a trans-Himalayan multi-dimensional connectivity network with Nepal – involving railways and communication links – as part of the Belt and Road Initiative.
Currently, with six border crossings with Nepal – five in Shigatse – China is the country’s second-largest trade partner after India. Nepal remains Tibet’s uncontested primary trading partner, seeing its share of Tibet’s total foreign trade rise from 40 per cent in 2024 to 46 per cent last year.
But Ivan Lidarev, a research fellow at the Institute of South Asian Studies at the National University of Singapore, doubted that trade via Nepal would reshape Chinese access to South Asia. He pointed out that Nepal was an unstable country with a population of just 30 million, a nominal GDP of about US$46 billion and a relatively small middle class.
He remained sceptical of Tibet’s ambition to serve as a “massive economic bridgehead” to South Asia.
“There are far easier, faster, and significantly cheaper alternatives, such as the China-Pakistan Economic Corridor through Xinjiang, or traditional maritime shipping routes connecting Chinese ports directly to southern India and Bangladesh,” Lidarev argued.
One of the biggest obstacles for road transport was fluctuating costs, according to Tenzin Namgyal.

Sun attributed the difficulty of trading with Nepal to seasonal weather disruptions, poor local infrastructure and geopolitical friction, which made the land port’s “capacity utilisation fall drastically short of its normalised operational targets”.
Amit Ranjan, another research fellow at the NUS Institute of South Asian Studies, said: “It will take time to transform the infrastructure status of Nepal. The reasons for such are many, including delay in effective implementation of the projects.”
The reality has been laid bare by the China-Nepal cross-border railway, a key project of the Belt and Road Initiative linking Tibet’s Gyirong county with Kathmandu.
Costing an estimated US$2.75 billion for the 72km Nepalese stretch alone, the line and its many bridges and tunnels run through a rugged and seismically active landscape where the impact of this week’s floods has yet to be determined.
The project has also met political inertia and social unrest in Kathmandu, especially after pro-China prime minister K.P. Sharma Oli left office late last year and was replaced in March by the populist, China-sceptical Prime Minister Balen Shah.
“An expected June 2026 feasibility report has been stalled by uncooperative Nepalese politicians, delaying realistic completion estimates past 2035,” according to Sun, who has run a social media account tracking the railway project alongside Nepali scholars since 2022.
The Nepalese loophole
One bright spot in trade with Nepal has been electric vehicles, which an official from Shigatse’s propaganda department called a “highly popular star product”.
Gyirong Port, which was devastated by the recent flash floods, is Tibet’s main foreign trade port and handles one-third of China’s trade with Nepal. Since 2023, it has been a major hub for exporting Chinese EVs to Nepal.
Last year, 12,938 Chinese-made EVs poured into Nepal, marking a 6.8 per cent jump since 2024, when the land port started operations.
Most of these vehicle exports, however, were re-exported to India by Nepali middlemen, taking advantage of a free-trade deal, Tenzin Namgyal said.
This provides Chinese carmakers with a back door into an Indian market protected by strict regulatory hurdles and prohibitive 70 to 125 per cent tariffs, though it remains unclear how traders bypass supposedly strict rules-of-origin criteria.
“We’re using Nepal as a stepping stone; our main focus is still India for its large population and underdeveloped infrastructure,” Tenzin Namgyal said.
Lidarev warned that the Nepalese loophole was highly vulnerable to an Indian clampdown. He said the trade only persisted because its current volume was small; if it grew, New Delhi would likely restrict goods from Tibet, pressure Kathmandu, or reconsider the trade deal.
He added that encouraging a massive increase in border trade would entrench Chinese economic influence in North India, undermine Indian producers and even weaken the “Make in India” manufacturing initiative championed by the Narendra Modi government.




Tensions with India
From the perspective of Chinese planners, India remains the economic prize in South Asia. But observers say commercial ambitions must be guided through a complex and fragile stabilisation between Asia’s two nuclear-armed giants.
According to Lin Minwang, vice-dean at Fudan University’s Institute of International Studies, Beijing’s grand vision for Tibet’s South Asian corridor has been consistent for three decades and reflects a “strategic patience”.
The overarching blueprint was a multi-generational gamble designed to “plug directly into India’s vast 1.4-billion-population market whenever a structural diplomatic pivot occurs”, said Lin, who is also deputy director of the university’s Institute of South Asia Studies.
However, Lin acknowledged a profound deadlock since 2020, driven by border restrictions in the wake of frontier clashes between the nations and New Delhi’s continued wariness about opening up to China.
While Beijing issued about 200,000 visas to Indians in 2025, New Delhi issued a mere 2,000 visas in 2024. Although India lifted its five-year ban on Chinese tourist visas in July 2025 – which drove a 63 per cent rebound in business travel – volumes remain far below pre-pandemic peaks due to strict financial requirements and background checks.
Lin added that New Delhi was actively neutralising Nepal’s potential as China’s “proxy corridor” by refusing essential overflight rights for Nepal’s newly built, Chinese-constructed international airport, rendering it virtually non-operational.
“Frankly, the actual economic and trade space is indeed not large right now,” Lin said. “The risks are manageable, and we must maintain a degree of optimism, but overinflated expectations are unrealistic.”
Lidarev noted that India opposed opening its “underdeveloped, minority-populated, poorly integrated and security-sensitive borderlands” – especially its troubled northeast – to Tibetan trade. “While there is an internal debate in India about gradually relaxing investment restrictions for Chinese firms, this does not encompass the border areas.”
Sautman said the deadlock was fuelled by animus among India’s elite over a staggering 6-1 merchandise trade deficit against Beijing. As a result, less hostile diplomatic rhetoric has yet to translate into real, on-the-ground cross-border commercial interchanges.
However, recent high-level diplomacy indicates a thaw may be under way, including when the two sides resumed cross-border trade through the Lipulekh Pass and Nathu La Pass after a six-year suspension. In June, Chinese Foreign Minister Wang Yi urged Ajit Doval, India’s national security adviser, to speed up the resumption of dialogue mechanisms.
That month, India’s new ambassador to China paid his first visit to Tibet to review arrangements for Indian pilgrims following Beijing’s restoration of access to the sacred Mount Kailash after a five-year hiatus.
Hours before the devastating cross-border floods struck, Beijing and New Delhi announced eight measures to further ease cross-border tensions, including steps to keep talks about cross-border trade and pilgrimages moving. Hundreds of pilgrims are thought to be among the victims of the floods.
But unfreezing crossings does not guarantee a trade spike.
Lin pointed out that when the Nathu La Pass last reopened after a closure, in 2006, trade between Tibet and India was strangled by the latter’s rigid passport and visa restrictions, dashing hopes of greater economic integration.
Interior hurdles
Restrictions do not just come from foreign governments. For ordinary businesspeople in Tibet, getting cross-border trade moving can prove next to impossible despite Beijing’s goals.

Xizang Zanggangdise Agricultural Products Technology Development Co is government-mandated to spearhead exports to South Asia and the Middle East, targeting a 320 million yuan annual pre-tax output.
General manager Phuntsok Dondrub said the company – which makes soy sauce and vinegar – had already boosted the local economy, creating 209 jobs and increasing agricultural incomes by 5 per cent for over 2,000 households.
But, despite securing a 1 million yuan export order to Kathmandu in June, the firm found getting its paperwork in order a challenge.
“Obtaining a passport and visa is still quite difficult locally within Tibet,” he said.


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Illustration: Huy Truong

The land port is said to have brought 160 businesses to Shigatse and generated 2,500 jobs. Photo: Xinlu Liang

Tenzin Namgyal, general manager of the company that runs the Shigatse facility, says goods arrive in Tibet by train before being transferred onto trucks for the road journey into Nepal. Photo: Xinlu Liang

Phuntsok Dondrub says his company is boosting the local economy. Photo: Xinlu Liang

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A rescuer helps a resident through heavy mud following flash floods in Trishuli, Nepal. Photo: Getty Images/TNS

Chinese rescuers prepare to head to the stricken Gyirong Port in southwest Tibet on August 27. Photo: Xinhua

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A satellite view of glaciers in Langtang, Nepal. Temperatures in the Himalayas are rising at more than twice the global average. Photo via Reuters

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An aerial view of flash floods at Trishuli Bazar in Nepal’s Nuwakot district on August 26, 2026. Chinese state media reported “major casualties” from a mudslide at a Tibet trade hub on China’s side. Photo: AFP

The Gyirong Port Building in the Tibet autonomous region and The Friendship Bridge on the Nepal-China Border at Rasuwa is pictured in 2023. Photo: AFP

An aerial view shows flooding along the Bhotekoshi River affecting low-lying areas and settlements near the riverbanks. Photo: JNA via ZUMA Press Wire/dpa

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Beijing hopes trade will stabilise Tibet, but friction with India and the looming Dalai Lama succession are hampering its efforts


Beijing hopes trade will stabilise Tibet, but friction with India and the looming Dalai Lama succession are hampering its efforts.


.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Beijing hopes trade will stabilise Tibet, but friction with India and the looming Dalai Lama succession are hampering its efforts

Beijing hopes trade will stabilise Tibet, but friction with India and the looming Dalai Lama succession are hampering its efforts