Chinese border closure hits Nepali entrepreneurs hardWith no export orders, manufacturers and exporters are facing tough times and have started looking for other sources of income observing the situation.
The closure of the Chinese border in early 2020 has affected a large number of Nepali entrepreneurs exporting goods to the country. The Kerung and Tatopani border points have been reopened but trade has not picked up in terms of both export and import.
The export of carpet, thanka, silver jewellery, wooden crafts, pashmina, statue among others from Thamel, Patan and Bhaktapur is almost zero, said Rajesh Kaji Shrestha, immediate past president of Nepal Chamber of Commerce. There are more than 700 members in the chamber and numerous throughout the country, he said.
China closed its border points due to the pandemic between January and October last year and the border was closed again after January 20 this year.
With no export orders, manufacturers and exporters are facing tough times and have started looking for other sources of income observing the situation.
The export rate has increased with a rise in transportation charges, no flights to China and hiked prices of chartered planes, said Shrestha. Traders had been exporting goods by road and flights but as charges have increased, traders are unable to make a profit, he added.
With exports from Nepal not picking up anytime soon, entrepreneurs exporting goods to China are in trouble.
Manish Lal Pradhan, chairperson of the Export Promotion Centre in the Federation of Nepalese Chambers of Commerce and Industry said that export from Nepal to China has been suffering since the Tatopani trade point was closed.
The orders received in 2019-20 provided some respite to entrepreneurs but the orders dried up in 2020, he said.
Traders are unsure as to when China will reopen the border point.
According to the Department of Customs, the country’s total export to China stood at Rs796.41 million in the first nine months of the current fiscal year while the import bill remained at Rs164.13 billion with a trade deficit of Rs163.33 billion.
Shrestha said that the export figure might have been the previous year’s order.
According to the Trade and Export Promotion Centre, Nepal’s export bill to China plunged 43.5 percent to Rs1.19 billion in the last fiscal year 2019-20 compared to Rs2.11 billion in the fiscal year 2018-19.
Dinesh Shrestha, secretary at the Ministry of Industry, Commerce and Supplies said that they have been continuously discussing the issue with the Ministry of Foreign Affairs and the Chinese government. “We are trying to ease trade between the countries through diplomatic talks but we cannot give any dates for now,” he said.
“Though the government seems to be taking the initiative to export goods at recent times, China does not seem to take the matter seriously as the Nepali market is peanut-sized for them,” Pradhan said.
Imports from China have also been affected with few trucks crossing the border. Nepali traders have accused China of conducting an 'undeclared trade blockade' as their merchandise-laden container trucks have not been allowed to cross the border into Nepal for over 16 months.
Business with China started booming after 2015 when the Nepal government removed export duty.
Traders involved in exporting wooden utensils and woollen carpet from Olangchung Gola used to make billions by exporting the goods to the Chinese market but the border closure has severely impacted their livelihoods.