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Nepal-China Relations
1. Political Relations
Nepal-China relations have always remained good and cordial. These relations have been marked by friendliness, mutual support and understanding and appreciation of each other's aspirations and sensitivities. Our two countries are abiding by the ideals of the Five Principles of Peaceful Co-existence. The history of our relations could be traced back to the 5th century when sages and saints engaged themselves in visiting far and wide in the pursuit of knowledge and peace. The marriage of Bhrikuti to the Tibetan King, Song Sang Gampo, in the 7th century and the White Pagoda temple in Beijing constructed under the guidance of Nepalese architect, Araniko have, inter alia, provided testimony to the historical relations between Nepal and China. Nepal and the People's Republic of China established diplomatic relations on 1 August 1955.
Nepal and China share a long border, spanning a range of about 1414 Kilometres. The two Governments resolved border issue amicably in 1961, and have been conducting joint inspection of the border at regular intervals.
Nepal and China are supporting each other in many international forums, including the United Nations. Nepal has always been upholding 'One China' principle and is committed not to allow Nepalese territory to be used against China's interests. Government, in a press release issued on 16 March 2005, unequivocally supported the Anti-secession Legislation enacted by the National People's Congress on 14 March 2005. At the same time, Nepal has also appreciated 'one country two systems' principle as enunciated by China and applied successfully in Hong Kong and Macao in the form of special administrative regions.
Exchange of bilateral visits including at the highest level has immensely contributed to further nurturing Nepal-China bilateral relations. Their Majesties the King and Queen paid a State Visit to China in July 2002 and had cordial meetings with the Chinese leaders. Their Majesties King Gyanendra Bir Bikram Shah Dev and Queen Komal Rajya Laxmi Devi Shah visited Boao in Hainan Province of the People's Republic of China from 23 to 26 April 2005 in connection with the participation in the 2005 Annual Conference of the Boao Forum for Asia. On the occasion, His Majesty, on behalf of the Nepalese people, handed over a Buddha Statue to the Boao Buddhist Temple constructed in Boao. Their Royal Highnesses the Crown Prince and Crown Princess paid an official visit to China in August 2004.
Similarly, the visits to Nepal paid by Chinese President, H. E. Mr. Jiang Zemin, in 1996 and also by Premier H. E. Mr. Zhu Rongji in May 2001 have been significant in enhancing good-neighbourly relations between the two countries. The official visit by H. E. Mr. Jia Qinglin, Chairman of the Chinese People's Political Consultative Conference in December 2003 has added to strengthening these relations.
Chinese Foreign Minister, H. E. Mr. Li Zhaoxing, visited Nepal from 31 March to 01 April at the invitation of Foreign Minister, Hon. Ramesh Nath Pandey.
Apart from these visits, there have been a number of exchanges of visits to and from Nepal at various levels, contributing immensely to further promoting the understanding between the two countries.
2. Economic Relations
China has been assisting Nepal in its efforts for socio-economic development since mid-50s. The first 'Agreement between China and Nepal on Economic Aid' (20 million Indian Rupees in cash and 40 million rupees for aided projects) was signed in October 1956. Ever since, China has been providing financial and technical assistance to Nepal, which has greatly contributed to Nepal's development especially in infrastructure building, establishment of industries, human resource development, health, sports, etc.
In the early years, Chinese assistance was pledged in terms of projects and no financial involvement therein was mentioned. From mid-90s, the Chinese Government has been pledging grant assistance to Government under the Economic and Technical Cooperation programme in order to implement mutually acceptable development projects. The volume of such assistance is to the tune of 80 million Yuan every year. Following is the list of such assistance.
Financial and Technical Assistance
| S.N. |
Date of Agreement |
Amount Cmmitted
(in million RMB) |
Equivalent
(In million NRs.) |
| 1. |
July 20, 1994 |
60 |
340 |
| 2. |
April 18, 1995 |
80 |
475 |
| 3. |
April 18, 1996 |
80 |
475 |
| 4. |
December 4, 1996 |
80 |
560 |
| 5. |
April 17, 1998 |
30 |
240 |
| 6. |
October 16, 1998 |
50 |
425 |
| 7. |
December 30 1999 |
80 |
679 |
| 8. |
February 16, 2000 |
30 |
254.6 |
| 9. |
August 24, 2000 |
50 |
436 |
| 10. |
May 12, 2001 |
80 |
750 |
| 11. |
July 10, 2002 |
80 |
750 |
| 12. |
December 3, 2003 |
80 |
750 |
| 13. |
August 16, 2004 |
50 |
415 |
| |
Total: |
830 Million |
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Nepal and China have established Inter-Governmental Economic and Trade Committee (IGETC) in October 1982. The IGETC meetings have become the main forum for discussions on Nepal-China bilateral economic and technical cooperation. The IGETC meetings focus on economic and technical assistance, bilateral trade and tourism.
China Aided Projects in Nepal (Completed):
| A. Road and Transport |
|
| I. Arniko Highway |
(104 Km) |
| II. Arniko Highway (Rehabilitation) |
|
| III. Kathmandu Bhaktapur Road |
(13 Km) |
| IV. Prithvi Highway and Surface Pitch Paving |
(174 Km) |
| V. Narayanghat-Mugling Road |
(36 Km) |
| VI. Gorkha Narayanghat Road |
|
| VII. Kajhuwa-Gorkha-Road |
(24 Km) |
| VIII. Kathmandu-Bhaktapur Trolly Bus |
(14 Km) |
| IX. Kathmandu Ring Road |
(27.2 Km) |
| X. Pokhara-Baglung Road |
(65 Km) |
| XI. Seti River Bridge at Pokhara |
|
B. Industries |
I. Bansbari Leather and Shoes Factory
II. Hetauda Cotton Textile Mills
III. Harisidhi Brick Factory
IV. Bhaktapur Brick Factory
V. Industrial Gloves and Apron Manufacturing at Bansbari
VI. Bhrikuti Paper Mills
VII. Lumbini Sugar Mills
|
C. Water Resources |
I. Sunkoshi Hydroelectricity Plant
II. Pokhara Water Conservancy and Irrigation Project (Multipurpose)
III. Sunkoshi Vicinity Electricity Transmission Project
IV. Sunkoshi-Kathmandu Electricity Line Transmission Project
|
D. Health |
I. B.P. Koirala Memorial Cancer Hospital, Bharatpur
|
E. Sports |
I. Sports Complex at Kathmandu and Lalitpur
II. Construction of Sports Facilities for the 8th South Asian Federation Games in 1999
III. Repair of Lighting System in the Sports Complex (April 2005)
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F. Other Construction |
I. National Trading Complex
II. Warehouse at Kathmandu and Birgunj
III. City Hall in Kathmandu
IV. Birendra International Convention Centre
V. Consolidating Seti River Bridge in Pokhara
VI. A three-month arch bridge training course for 15 Nepalese engineers
VII. Pokhara Sedimentation Pond
VIII. Provision for the Television Truck for NTV
IX. Mobile X-Ray Machine for Birgunj Dryport Customs Office
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Ongoing China-aided Projects:
a. Syafrubesi-Rasuagadhi Road
b. Civil Service Hospital
c. Polytechnic Institute in Banepa
d. Nepal Television Metro Channel Station Expansion and Improvement.
During the official visit to China by HRH the Crown Prince in August 2004, Government of Nepal/N and the Chinese Government exchanged Letters on the following projects:
a. Installation of Optical Fibre along the Araniko Highway
b. National Ayurvedic Research and Training Institute
c. An Outer Ring Road in the Kathmandu Valley
In addition, the Chinese Government has also agreed to send a team for the feasibility study of the Conservation Research Centre for King Mahendra Trust for Nature Conservation. Government of Nepal/N and the Chinese Government have exchanged letters on this matter during the official visit of the Chinese Foreign Minister H. E. Mr. Li Zhaoxing to Nepal from 31 March to 01 April 2005.
3. Education and Culture
Scholarship:
Government of Nepal appreciates the Chinese assistance in the field of education. China has been providing 100 scholarships annually to Nepalese students to study in China. In this way, China has been assisting Nepal to meet the ever-increasing demand for technical manpower in the country. It has also contributed to promoting understanding and appreciation of each other's culture and tradition.
Cultural Cooperation:
Nepal and China have concluded an MoU on cultural cooperation in 1995. Various activities have taken place since. Cultural programmes have been organised in each other's territories; and visits have been exchanged. For example, China had also organised a cultural fair in Kathmandu in 2003. Similarly, the Chinese Embassy in Kathmandu, in association with Cultural Net, organised China Festival in Kathmandu from 1 to 7 June 2005 on the occasion of the 50th anniversary of the establishment of diplomatic relations. Chinese Acrobatic Show was organised among other various activities. Additionally, a cultural troupe of 20 artistes from Guangdong Province of PRC visited Nepal and presented cultural programmes in Kathmandu and Pokhara, coinciding with the 59th auspicious birthday of His Majesty the King.
4. Nepal-China Trade
The volume of Nepal-China trade is increasing every year. Nepal's trade with China is largely conducted through Tibet and Hong Kong. The volume of Nepal-China trade is given below.
Nepal-China Trade
| Rs. in thousand |
| Fiscal Year |
Export |
Import |
| 1999/2000 |
514276 |
12530062 |
| 2000/2001 |
528012 |
11573870 |
| 2001/2002 |
1040075 |
8744459 |
| 2002/2003 |
1631050 |
9098978 |
| 2003/2004 |
2348150 |
9299902 |
| Source: FNCCI |
The following six points along the Nepal-China border have been opened for overland trade:
Kodari-Nyalam; Rasua-Kerung; Yari (Humla)-Purang; Olangchunggola-Riyo; Kimathanka-Riwo; Nechung (Mustang)-Legze
5. Investment:
Chinese investment in Nepal is growing, and has potential to further growth. Chinese investors are found interested in making investment in hotels and restaurants, electronics, radio paging services, readymade garments (pashmina), nursing home, hydropower, civil construction, etc. As of Baishakh 2060, there were 25 industries operating under Chinese investment, 6 under construction and 13 licensed. Improved law and order situation in the country and enhanced publicity in China could further increase Chinese investment in Nepal. FNCCI, especially under the framework of Nepal-China Non-Governmental Cooperation Forum, is also working towards attracting Chinese investment.
6. Tourism
The Government of the People’s Republic of China has designated Nepal as one of the tourist destinations for its people. At the same time, Nepal has made the following arrangements to attract tourists from China:
- Chinese Yuan has been made convertible for tourists and businessmen
- Government of Nepal has waived visa fee for Chinese tourists
- Nepal's Tourism Ministry and TAR Government have formed a joint committee to promote tourism
In addition, following agreement between Nepal and China, direct bus service between Kathmandu and Lhasa has been in operation since 1 May 2005, which will contribute to tourism promotion. Nepal and China have also signed Air Services Agreement and an MoU in August 2003.
7. Fiftieth Anniversary of the Establishment of Diplomatic Relations
The year 2005 marks the fiftieth anniversary of the establishment of diplomatic relations between the Kingdom of Nepal and the People's Republic of China. The important occasion is being celebrated by both sides by organising various programmes. Government of Nepal has constituted a high-level Committee under the Chairmanship of the Hon. Minister for Foreign Affairs, Mr. Ramesh Nath Pandey, to plan, organize and coordinate programmes on the occasion. Some of the programmes shall be organized jointly with the Chinese side and some shall be organized by Government of Nepal/N. China-related organisations in Nepal, too, are preparing and organising programmes.
On the occasion of the 50th anniversary of the establishment of diplomatic relations, His Majesty King Gyanendra Bir Bikram Shah Dev and H. E. Mr. Hu Jintao, President of the People's Republic of China, exchanged congratulatory messages on 01 August 2005. In the messages, His Majesty the King and H. E. the President highlighted, and expressed satisfaction at, the achievements made in promoting Nepal-China understanding and cooperation. Similarly, Hon. Minister for Foreign Affairs, Mr. Ramesh Nath Pandey, and H. E. Mr. Li Zhaoxing, Minister of Foreign Affairs of the People's Republic of China, exchanged congratulatory messages. In their messages, the Foreign Ministers expressed satisfaction at the expansion and consolidation of Nepal-China relations in the last 50 years.
8. Nepal-China Non-Governmental Cooperation Forum
Nepal and China have established the Nepal-China Non-Governmental Cooperation Forum in 1996. The Forum has been meeting regularly. The eighth meeting of the Forum was held in Sanya, Hainan Province, from 12 to 13 January 2005. The Forum is being led by FNCCI from the Nepalese side and All China Federation of Industry and Commerce (ACFIC) from the Chinese side.
9. Ongoing Activities:
The Third Joint Inspection of Nepal China Border
As per the Border Agreement between Government of Nepal and the Government of the People's Republic of China, the border between the two countries has to be jointly inspected every ten years. Accordingly, the first and the second inspections had taken place in 1979 and 1988 respectively. The process for the Third Joint Inspection has been initiated.
The two Governments have set up a Joint Inspection Committee and agreed to set up Joint Inspection Teams as necessary. The Joint Inspection Teams are expected to begin field-work in the summer of 2006 and complete the work by the end of the year.
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