Eye on transit deal as PM reaches BeijingPrime Minister KP Sharma Oli will meet China’s President Xi Jinping and his counterpart Li Keqiang on Monday, while witnessing the signing of several agreements between Nepal and China.
Prime Minister KP Sharma Oli will meet China’s President Xi Jinping and his counterpart Li Keqiang on Monday, while witnessing the signing of several agreements between Nepal and China.
Nepali officials have set their sights on signing of Transit and Transportation Agreement with China that will pave the way for Nepal to use the nearest Chinese sea port, Tianjin, over 3,000 kilometres away from Nepal. India’s Kolkata port that Nepal currently uses for third country trade is about 1,000km away. While the immediate ramifications of the pact will be very little, experts say it allows for diversification of Nepal’s trade once adequate infrastructure is created.
“This transit and transportation agreement is a milestone,” said former commerce secretary Purushottam Ojha. “Strategically, it’s going to be a good deal but due to the distance, it will be a costly affair for us until there is rail link from Tianjin to Nepal border.”
Ahead of his visit, in an interview with the Xinhua news agency, PM Oli had said Nepal was eager to use Chinese sea ports. “Nepal is a small neighbour of China and has lagged a little bit behind in development in Asia, but I believe Nepal can benefit from China’s progress on the economic front,” said the PM.
But the much touted deal for importing fuel from China is unlikely to be signed, said officials. Importing fuel should be a priority, said former foreign minister Narayan Kaji Shrestha. A deal to allow Chinese banks to open their branches in Nepal is also on the cards. Yuan’s internationalisation, the growing number of Chinese entrepreneurs and tourists in Nepal, and trade engagements have prompted China to expand its banking service in Nepal.
China is also likely to help construct a motorable bridge in Hilsa in western Nepal on the north-south corridor for trade with China. There will also be a soft loan agreement for construction of a regional airport in Pokhara that will cost $216 million. The soft loan will be extended by China’s Exim Bank.