Nepal and China agree on cooperaion in roads, railways and tunnels

Kathmandu, Oct. 13

Nepal and China have agreed to intensify cooperation under the Belt and Road Initiative (BRI) to enhance connectivity by developing ports, roads, railways, aviation and communication.

They have agreed to expedite the implementation of the Memorandum of Understanding (MoU) on cooperation under the BRI to enhance connectivity within the framework of trans-Himalayan Multi-Dimensional Connectivity Network.

A joint statement issued by the two neighbours on Sunday at the conclusion of the two-day state visit of Chinese President Xi Jinping to Nepal maintains that the implementation of connectivity infrastructure will contribute to Nepal’s aim to graduate from the status of the Least Developed Country (LDC) at an early date and become a middle income country by 2030.

Nepal plans to graduate to a developing nation from its current LDC status by 2022.

President Xi and Prime Minster KP Sharma Oli observed the agreements signing on Sunday morning following their bilateral meeting.

The visit of the Chinese Head of the State after a gap of 23 years brought joy to the government and people of Nepal as the two nations agreed to conduct the feasibility study of the Keyrung-Kathmandu Railway project which will be the first cross-border railway in the north. 

China has also assured that it would extend support to the proposed Kathmandu-Pokhara-Lumbini railway project.

Nepal and China had signed an MoU in June 2018 on Cooperation in Railway Project.

Cross-border connectivity

The northern neighbour has agreed to open the Lizi-Nechung port across the Korala border at the earliest date and build necessary infrastructure on Nepal’s side of the border.

Currently Zhangmu/Khasa port across Tatopani is operating freight functions while Jilong Keyrung port on the other side of Rasuwagadhi will come into operation shortly.

China has supported Nepal in the construction of Larcha Dry Port at Tatopani border and is constructing Timure Dry Port at Rasuwagadhi border point which has witnessed the increased trade activities following the devastation of the former in the 2015 earthquake.

Tunnel along the Keyrung-Kathmandu road is also included in the joint statement. Currently, China and Nepal have agreed to conduct feasibility study of the project.

 In an effort to facilitate cross-border movement of goods and people the northern neighbour is also helping Nepal in developing the Syaphrubensi-Rasuwagadhi road as a two-lane highway.

In another effort to create long-term connectivity infrastructure, China has agreed to upgrade and reconstruct the Araniko Highway connecting Kathmandu to Tatopani-Khasa.

Similarly, China will be supporting Nepal in developing three north-south corridors – Koshi, Gandaki and Karnali Economic Corridors. “It will create jobs and improve livelihood of locals and stimulate economic growth and development,” read the joint statement. 

The two sides agreed to strengthen cooperation in various fields of economy, including trade, tourism, investment, capacity of production and improving people's livelihood so as to promote mutual development.

President Xi’s visit has also facilitated Nepal to have greater direct air services to China as the two countries have welcomed the consensus between their civil aviation authorities on expanding the air rights arrangement to operate more direct air services.  

Nepal will also get assistance for training its technical human resources in railway, road and tunnel engineering, inland waterways and shipping.

Expanding export to China

China has assured that it would take positive measures to expand Nepal’s export to China.

It has agreed to consider providing technical support for the establishment of multifunctional laboratory in Nepal and extend cooperation to make Tatopani Frontier Inspection Station at Larcha fully functional.

At the same time, Nepal will facilitate the Chinese banks to open their branches and other financial services in Nepal to facilitate trade and investment between the two countries. Nepali private sector has long been demanding the operationalisation of the Chinese banks in Nepal in order to make the trade and economic activities between the two countries formal.

According to the Ministry of Finance, the government is trying to bring a Chinese bank in joint-venture with a Nepali bank, but the former is interested to open its branch instead of a JV. 

Likewise, the two neighbours have agreed to establish working groups on investment cooperation and trade under the framework of Nepal-China Joint Commission on Economy and Trade, to facilitate the respective activities. 

The two countries will sign an MoU on cooperation on Import and Export of Food Safety in near future. They signed a protocol on phyto-sanitary requirements for the Export of Citrus Fruits from Nepal to China. 

According to the joint statement, energy exchange between the two countries is likely to happen soon as they agreed to carry out Nepal-China Electric Power Cooperation Plan and complete it within one year. 

They also agreed to take this plan as an important reference for the next step of bilateral electric power cooperation and promote its implementation. There will be greater exchanges and cooperation in hydropower, wind power, solar power, biomas energy and other kinds of new energies and grid systems. 

Tapping on the aspiration of Nepal, the world’s second largest economy has assured its support in establishing a multidisciplinary Madan Bhandari University for Science and Technology and promised to start work immediately after the government chooses a suitable site for the institution. 

The two neighbours also signed an agreement for Boundary Management system to enhance and improve the level of cooperation in the area. They said that a joint scientific research would be conducted to measure the height of Sagarmatha (Zhumulangma). 

China has also promised its support to promote Visit Nepal Year 2020 in China through various activities and said that it would welcome Nepal to participate in the travel marts being organised in China.

Published in The Rising Nepal daily on 14 October 2019.