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Nepal-China Economic Cooperation: Himalayan Heights To Conquer

[WTN-L World Tibet Network News. Published by The Canada Tibet Committee. Issue ID: 05/08/11; August 11, 2005.]

-Rajendra Kumar Khetan, CNI Vice President, Nepal
PeaceJournalism.com, Nepal
10 August 2005

As Nepal and China mark the golden jubilee year of establishment of diplomatic relations, it is the right time to stop and ponder over our achievements and shortcomings in enhancing the bilateral ties particularly in the economic sector.

Just as the Himalayas separate the two countries, there are Himalayan heights of differences between the potentials and realities of the two countries as far as economic relations between Nepal and China is concerned.

It is only a matter of time before China becomes a global economic powerhouse also by joining G8. Given the tremendous pace of growth she has been consistently registering over the last decade and a half, the double-digit growth fueled by adoption of sophisticated technology and wide base of human resources have ensured that China remains on a firm trajectory towards prosperity.

At a time when global pundits have been predicting worldwide positive impact of China's growth, it is natural to expect that Nepal, too, could piggyback on the progress of its giant northern neighbor for its own prosperity.

In an era where physical barriers are increasingly becoming irrelevant, the tough terrain that divides the two countries and, which largely has been responsible in holding back the growth in bilateral economic ties for so long, can now be overcome.

As we step into another phase of our bilateral relations, may I appeal to the leaders of both the countries to seize the moment for the mutual benefit of peoples of the two countries?

When Nepal and China established their diplomatic relations in August 1 of 1955, the world was vastly different. China was just beginning to grow its economic base; the world was entrenched and divided in Cold War politics; while the South Asian region itself was torn apart by strife, war and instability. The next fifty years saw China rise from a state of old civilization to a dynamic nation brimming with people and moving full-throttle towards the path of prosperity even as most countries in South Asia are still unable to free themselves from the shackles of poverty and mis-governance. Nepal has also been unable to develop economically as millions of its populations continue to languish in absolute poverty.

As such, it is now up to the young and dynamic business leaders of the two countries to take advantage of the excellent bilateral relations subsisting between Nepal and China and cash it to bring in prosperity to the teeming millions of people.

Even as we harp on the potentials and opportunities, it would be pertinent to reflect upon the existing scenario of Nepal-China bilateral trade and economic ties. Our trade deficit with China is huge and growing. In the fiscal year 2003/04, we exported goods worth Rs 117.49 million while we imported goods to the tune of Rs 5.4 billion from China (excluding Hong Kong) - registering the huge deficit of Rs 5.3 billion. Nepal also had trade deficit of Rs 1.5 billion with Hong Kong. (Nepal Overseas Trade Statistics 2003/04 published by Trade Promotion Center) '

Such heavily tilted trade deficit situation is not in the interest of either neighbor. For a poor country like Nepal, it is almost unbearable. Here, we urge not only the government of Nepal but also the Chinese government to look into the situation and formulate policies that enhance Nepal's export capacity.

The Nepalese business leaders are excited with the news that Chinese government is working hard to bring in train services up to Lhasa by 2006 linking the mainland China with the Tibetan Autonomous Region -with which Nepal has had traditional trade linkages.

The linkage of Mainland China by railway could mean easier and deeper access for Nepalese goods into the vast Chinese market. The growing prosperity in Tibet, too, could have spin-off effect on the bordering northern region of Nepal that are poor and backward even by Nepalese standards. The possibilities of using roads in Tibetan side to move from north-western region to north-eastern region of Nepal hold immense promises as we do not see good transport infrastructures coming up to link these areas in foreseeable future because of the extremely difficult terrain there.

We are also keen to take advantage of growing prosperity of China and India by offering to work as bridge or transit economy. Here, given our poor base and expertise, we would also like to seek Chinese help in the construction of border, transport and other infrastructure. Though it may not be the priority of the Chinese or Indian government, we would like to have Chinese help in this regard in the spirit of good neighborly relations the two countries have enjoyed since time immemorial.

It is reasonable here to wonder if Nepal also can replicate the success of China's industrialization process and create some kind of industrial hub like Pudong valley in the neighborhood of mega-city, Shanghai in China. Such one-stop pockets of industrial bases could be good idea to push faster the industrialization of Nepal.

There are immense opportunities to expand the existing tourism exchanges. Places like Mt. Kailash and Lake Mansarovar in Tibet are major attractions for not only adventure-seeking tourists but also for the Hindu pilgrims. Thousands of tourists and pilgrims have been visiting these places via Nepal. More systematic management of this route could help Nepalese tourism entrepreneurs.

The government of China has already included Nepal in its list for Outbound Tourist Destinations. But this move has not been able to bring in the desired number of Chinese tourists in Nepal. Although, the primary reason for this might lie on our internal problems, stronger ties between the tour operators of the two countries could help overcome this situation.

And then there is another important aspect of expanding trade ties and investment from China. The Chinese investors could use the preferential trade arrangement that Nepal and India have. Nepal needs FDI to reduce poverty and sustain economic development.

India and China both are members of the Bangkok Agreement. Nepal is already an observer of the trading bloc and has applied for its membership. We hope this trading bloc will further widen the scope for developing bilateral trade ties.

Looking at the development E.U. has achieved and to stand competitive in front of other global and regional trade forces, it is high time that SAARC, BIMSTEC, AFTA of ASEAN and or Bangkok Agreement within and among all stand united.

Nepal and China are fortunate to enjoy problem-free relations for the past five decades. The political relations between the two neighbors are excellent. But one cannot say the same thing about the economic relations. Nepal has benefited a lot from Chinese cooperation in many sectors like infrastructure development. But the coming century will definitely belong to trade and not aid.

Therefore, it would be prudent here to draw the attention of leaders of both the countries to deepen mutually beneficial economic relations so that when we gather again to celebrate 100 years of our relations, we could be satisfied with our prosperity and economic progress as well. Nepal has always been a good friend to China and vice-versa. Now is the time to translate the friendship into tangible economic benefits so that the two countries could continue to play positive role in consolidating peace and prosperity in the entire South Asian region in the years ahead.

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