Chinese President Xi (L) and Nepalese President Bidhya Devi Bhandari (R). Photo: Narayan Maharjan/NurPhoto/ Getty Images

President Xi Jinping became the first Chinese president to visit Nepal in 2 decades on Saturday, as Chinese investors continue to pour millions of dollars into "one of Asia's poorest and least-developed democracies," the New York Times reports.

Why it matters: Xi's visit emphasizes China's increasing interest in using South Asia as a "strategic hub for defense and transit projects," per the Times.

The big picture: Both China and India have a history of trying to gain influence in Nepal.

  • Nepal is traditionally closer to India, but Nepalese Prime Minister K.P. Sharma Oli is trying to diversify the country's trade agreements and shift its dependence off of India.
  • Tensions have mounted recently between the 2 nations over the Kashmiri region in India, China's agreements with Pakistan and a military standoff in an area claimed by Bhutan, according to the Times.
  • The signing of an extradition treaty that might allow China to remove Tibetan refugees from Nepal could prove to be one of the more delicate subjects between Xi and Oli as China continues to assert its dominance in Tibet.

Yes, but: Some Nepalese leaders are concerned that working with China and Xi puts their sovereignty at risk, notes the Times.

The bottom line: "China is seeking to find a sweet spot: to increase its influence in Nepal without upsetting India's security concerns in what used to be its predominant sphere of influence," Constantino Xavier, a foreign policy fellow at Brookings India in New Delhi, told the Times.

  • “Xi is coming to Nepal to take it under China’s grip," Mrigendra Bahadur Karki, who leads the Centre for Nepal and Asian Studies at Tribhuvan University in Kathmandu, added.

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