Red flags rose among many Nepalese politicians and the pro- China lobby in Kathmandu last week, when Prime Minister Jhala Nath Khanal, who is also the President of CPN (UML), appointed Lhar Kyal Lama as the Minister of State for Finance in the UML-UCPN (Maoist) government. It was curious that only a fortnight before Lhar Kyal Lama’s appointment, a 15- member high level Chinese military delegation led by the People’s Liberation Army (PLA) Chief, Gen. Chen Bingde had visited Nepal and met President Ram Baran Yadav, Prime Minister Khanal, Nepal’s army Chief Chatra Man Singh Gurung and other defence officials. The delegation announced an aid of 30 million Yuan to the Nepali army’s non-defence projects. The composition of the delegation and what Gen. Chen told his Nepali interlocutors was very pointed. It was Tibet’s security. He made it very clear that China would not tolerate the “involvement of (any) third party in bilateral aspects of Nepal-China relations”. Interpreted, Nepali leaders were warned against giving any avenues to the US and some European Union (EU) countries to use Nepal’s soil to launch destabilizing operations in Tibet using Tibetan refugees in Nepal or the larger Tibetan diaspora. China’s concern about the political situation in Tibet has gone up even higher after the Dalai Lama announced his retirement from politics a month earlier. They are afraid that without the Dalai Lama’s restraining hand, activities of the new political leaders of the Tibetan government-in-exile could become more militant and the US could exploit them. Even more curious is the fact that the Chinese Embassy in Kathmandu, according to the Nepali media, lodged an “ informal” protest with Prime Minister Khanal and others in the UML on Lhar Kyal Lama’s appointment. This was astounding, given the fact that the Chinese government and its Kathmandu Embassy came down like a ton of bricks on a small demonstration by the Tibetan refugees. Nepal even disallowed Tibetans recently from voting for the Tibetan government in-exiles’ election of Kalong Tripa, or Prime Minister. And here was the Lama who held high the banner of the Free Tibet Movement backed by the Chinese, with a large wink. The Chinese machinations in Nepal and the betrayal of the Nepali people was exposed by the local newspaper the Kantipur (Apr. 20) when it dug into the activities of this Lama. He was a well cultivated Chinese source embedded both inside the Free Tibet Movement and Nepali politics. As the Minister of State for Finance, he would be able to influence in China’s favour and also report on the government’s internal policies and thinking. He was a professional source of the Chinese Military Attache’s office in the Embassy, according to the report. Lhar Kyal Lama was known to be close to Jhala Nath Khanal. His appointment as a Minister soon after Gen. Chen Bingde’s visit was not surprising as Khanal is also known to be close to China. Therefore, Lhar Kyal, with a controversial background being catapulted to this high position suggests Khanal-China shaking hands behind the back of the Nepali people. The Maoist leadership’s mute stand in this case suggests their selling out the country to China. According to the Nepali newspaper Republican, which found out the background of the Lama, he holds a Nepali passport in the name, an Indian Passport issued from Guwahati on June 12 , 1998 in the name of Khenso Chime Tsering, and a Tibetan refugee identity card issued from Mysore, India in 1969 , in the name of Lama Chime Tsering. This Lama is also reported to have been involved in several questionable activities including cheating. He was an appropriate candidate to become an intelligence source! China’s silent warfare strategy of implanting agents in an opponent Kingdom’s court goes back to around the 6 th Century A.D. This strategy is popularly known as the “Assassin’s Mace”. It has a significant meaning – the assassin is the agent imbedded in the opponent’s nerve centre; the mace is a silent weapon, that is, the agent works silently merging into the ambience. In Nepal, China’s one Assassin’s Mace has been exposed. How many more are there is difficult to say, but one may be assured China does not depend on only one. The other Chinese ancient strategy states that the enemy’s enemy is a strategic friend, and must be aided. This is a disturbing note for China’s neighbours that Beijing want to weaken. After the Mao Zedong era, China’s pre-eminent leaders and the father of China’s modernization, Deng Xiaoping openly declared Mao’s strategy of supporting people’s revolution in other countries was wrong, and was being discarded. True to Deng’s declaration the Maoist methodology was discarded. But the core of Mao’s strategy was transformed into a more sophisticated strategy. This strategy has been revealed with Chinese military support with arms, ammunition and communication equipment to Indian insurgents like United Liberation Front of Assam, the Naga Separatist (NSCN- I/M) and various other insurgent groups in North East India. Hard evidence is available now. But China has worked, in intelligence parlance, through “Cut outs”. Then “Cut outs” have been, Pakistan’s ISI, anti-India governments in Bangladesh and Chinese arms trading companies about whose activities China can deny knowledge. There were major questions if China really did have an inimical relations with Maoist when the latter went underground to fight against the monarchy? The pace with China and the Nepali Maoists, especially the Prachanda-Vaidya group, worked together to form a virulent anti-India constituency suggests Beijing kept a discreet but close relationship with the Maoists. Ousted King Gyanendra of Nepal may be realizing now that the Chinese have also betrayed him. Or, is China keeping a line open to him now? Like the Maoist of Yore, Gyanendra now travels more in India, and has no overt contact with China. It needs no elaboration how China plays and had played games in Nepal. It is, therefore, quite likely that China may be maintaining a deniable contact with the Indian Maoists using the Nepali Maoists. The cross-netting by the Chinese intelligence has placed the Nepali Maoists in such a position that they cannot get out of the Chinese net without losing all credibility with the people. The Maoists now stand to be seen by the Nepali people as selling the country to China. That includes strong pro-China elements in the UML including Jhala Nath Khanal. The Nepali army is, perhaps, the only institution in Nepal that the Chinese are finding difficult to penetrate. Prime Minister Khanal tried to help this Chinese endeavour. But in an unprecedented move, Nepali army Chief Gurung went on a two-week tour to the United States immediately after the Chinese military delegation's visit to Nepal. China is trying to signal to India that its current concern in Nepal is not India, but the US and EU. Outgoing Chinese Ambassador to Nepal, Qiu Guohang, decided to meet (Apr.06) Maoist Vice Chairman Dr. Baburam Bhattarai to convey that trilateral relations between Nepal, China and India should be “developed in a unified manner”, and cautioned that to run a government and pursue development activities a “ restrained behavior is needed most”. Bhattarai is widely known as a top Maoist leader who advocates an amicable relationship with India. Ambassador Qiu’s message to the hard line anti-India Maoists that a vitriolic anti-India programme was not opportune at the moment. But it is unlikely that this fine Chinese advice will sink into the minds of the anti-India constituency in Nepal. At the moment, China has realized that they themselves have instigated a situation in its eastern neighbourhood which has only bought distrust, and a stronger US led coalition against China’s threatening behavior. India must remain alert to these complicated developments in Nepal, which South Block and PMO would have to contend with. But it would be a major setback if India reposed trust in China’s signals. The Central Kingdom’s strategic net does not inspire a simple response.