Exchange Of Visits
The exchange of high-level visits has greatly contributed to strengthening the friendly relations existing between the two countries. Such visits provide opportunities of broadening cooperation by identifying various areas of mutual interest in the fields of trade, agriculture, sports, tourism, etc. The present visit by PM Nepal to China is the first after assuming the high office. The official goodwill visit by late B P Koirala in 1960 and the visit of Chinese Premier Zhou En Lai to Nepal had taken place in the sixties. The previous visit to China by Nepali PM’s gave new dimension to Nepal–China relations. Nepal enjoys excellent relationship with its northern neighbor China and is committed to further promote and consolidate bilateral, political, economic and trade relations. It was with this objective in mind and also to express the sentiments that Nepal attaches great importance to its relations with China that PM Nepal is on the six-day official visit. In the changed political context in Nepal, the new government wanted to affirm that the relations between Nepal and China would continue to receive priority attention and be pursued with warmth, sincerity frankness and understanding.
Nepal–China bilateral economic relation reached a new height when PM Sher Bahadur Deuba visited China in March, 1996. During the visit, China committed to provide Nepal grant assistance of about Rs 560 million for various projects to be identified and implemented by both governments. The visit of Nepali premier was followed by the visit of the Chinese President Jiang Zemin to Nepal in December 1996, and this laid the foundation of lasting friendly relations in the 21st century. After the establishment of loktantra in Nepal, the former PM Pushpa Kamal Dahal visited China twice, once during the opening of the Olympic Games and that was followed by an official visit.
The official visit to Nepal by Chinese leader Deng Xiaoping in 1978 added a further milestone in the bilateral relations between the two countries. Subsequently, in 1980, an agreement was signed for the construction of Bhirkuti Paper Mills and Lumbini Sugar Mills. In 1984, Chinese Prsident Li Xiannian visited Nepal.
Trade Relations
Nepal’s trade relations with China has remained sound and the establishment of the diplomatic relations in Sept 24, 1956, made remarkable contribution in fostering trade between the two countries. One prominent characteristic of Nepal-China trade is the traditional overland or border trade with Tibet Autonomous Region (TAR) of the People’s Republic of China. A cursory view of history indicates that Nepal’s traditional trade with Tibet has great potential though the current annual turnover has not turned out to be significant.
Nepal is facing a wide trade gap with China, including the trade with Mainland China, Tibet and Hong Kong. Nepal’s export to China (Mainland) consists of handicrafts, wooden and bamboo goods, readymade garments, hides and skins, etc while the import from China, including Tibet and Hong Kong, constitutes transport equipment, machinery and parts, office equipments, photographic goods, pharmaceuticals, medicinal equipments, construction materials, etc.
Nepal and China are traditionally friendly neighbors but the level of economic interactions has never been high. With China, Nepal has two separate regimes of trade: One with Tibet (border trade) and the other with Mainland China, which is classified as third-country trade. In border trade, barter system is still practiced. Despite the rapid economic development in Tibet and the presence of immense prospects for business between Tibet and Nepal, trading has not grown as envisaged. Some major hurdles still have to be overcome with efforts from both sides. China’s policy of importing less from Nepal although Nepali products are cheaper than products from other provinces of Mainland China is understandable. This, some opine, has been the result of Nepal’s failure to convince the Chinese authorities. According to Chinese authorities, the problems of high tariff and non-tariff barriers in Nepal on Chinese goods are a major barrier for rapid growth of trade.
Nepal’s traditional relations with Tibet date back to ancient times. Nepali traders had utilized the country’s position as a transit point between British India and Tibet, at the same time. History reveals that Nepali businessmen traded edibles, foodstuffs and other items of daily necessities to Tibet to barter with salt, wool and woolen products needed in Nepal. This means of trade has since undergone a sea change due to the rapid development of transportation and communication. Today, barter trade has given way to a new era of trading on the basis of Letter of Credit.
When exporting goods to Tibet, the certification of quality is made by the Chinese themselves. There is no proper mechanism for resolving the issue when conflicts take place between the buyers and the sellers. Tibet is experiencing a rapid transformation in its economy. There are many products, which could be supplied from Nepal more cheaply than to bring them all the way from Mainland China.
There is a good prospect of exporting Nepali paper-made products, handmade slippers, sugar, oranges, flour, fresh vegetables, apples, etc. However, there are major problems in furthering the trade with China due to lack of good and efficient physical infrastructure such as roads, godowns, sheds and air facility, lack of organized trading system, tariff is relatively higher; mutiple charges at Khasa, several check posts on Kathmandu-Khasa road, visa, communication and payment problem and absence of exchange rate system.
Tourism Promotion
Since Nepal and China both have unique tourist attractions like the Great Himalayas, exotic flora and fauna, scenery, diverse cultural heritage, both countries can explore and expand the tourism potentialities to the fullest extent possible.
Economic Cooperation
Nepal-China economic cooperation received a quantum jump in 1956 when the first Nepali Premier Tanka Prasad Achraya paid a goodwill visit to China and signed an agreement on trade and economic cooperation between the two countries. Meanwhile, China agreed to offer Nepal US$2.7 million assistance over a period of three years.
Nepal–China relations have been developing every year on the basis of the principles of peaceful coexistence. The economic cooperation being extended by China to Nepal has proved helpful in adding momentum to the pace of economic development in Nepal. There is no outstanding problem in further broadening the relations between the two countries who understand each others aspirations well. The frequent exchange of visits between the leaders of the two countries has had a far-reaching impact on further consolidating the relations between the two countries. It is essential to explore the prospects of further widening the cooperation between the two countries, especially in the economic and social fields. The ongoing visit will pave the way in further consolidating our trade and economic ties with China in the years to come.
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