A senior Chinese official arrived in Kathmandu on Sunday to assess the political situation, local party officials said, a first diplomatic step by the neighbouring power after Nepal’s Prime Minister dissolved parliament a week ago.

China has poured millions of dollars into Nepal in recent years in the form of aid and infrastructure investment as it incorporates the country in President Xi Jinping’s Belt and Road Initiative project, which is seen as a new Silk Road.

Guo Yezhou, vice-minister in the international department of the Communist Party of China, is the most senior foreign official to visit Nepal since Prime Minister K.P.Sharma Oli decided to dissolve the country's parliament last Sunday and call for an early parliamentary election.

The move triggered deep political unrest and street protests in the Himalayan nation as it grapples with the COVID-19 pandemic, and left the ruling Nepal Communist Party (NCP) on the verge of a split.

"I think the Chinese have come to assess the overall situation after the dissolution of parliament and virtual break-up of the Nepal Communist Party,” said Narayan Khadka, a senior leader of the opposition Nepali Congress party.

The Chinese Embassy in Nepal was not immediately available for comment.

Bishnu Rijal, a central committee member of the NCP, said the Chinese official was expected to meet Oli and his opponents.

Oli has said that internal squabbling and a lack of cooperation from his party paralysed decision-making, forcing him to seek a fresh popular mandate.