KATHMANDU, June 30 -- The prospect of a trans-Himalayan connectivity has historically been a sensitive geopolitical issue since it concerns the region's main rivals: China and India.

Even back in 1961, when Nepal and China signed an agreement to build a highway linking Kathmandu to Lhasa there were misgivings about Beijing's strategic motive. India and China were about to go to war along the Himalaya, and the Cold War was at its height. King Mahendra allayed those fears by famously saying: "Communism does not travel by taxi."

Sixty years later, similar suspicions have surfaced as China moves full steam ahead to connect its Tibetan Autonomous Region with new bullet train links that could ultimately be extended to the Nepal border, and even...