China has reopened the border allowing cargo containers to pass into Nepal as promised by Li Zhanshu, chairman of the Standing Committee of the National People’s Congress, during his visit to Kathmandu two weeks ago.

On September 15, Beijing ordered Chinese customs authorities to release all Nepal-bound trucks stranded on the Chinese side of the border by September 27, and about 90 percent of them have arrived, traders said.

“Though late, the stranded goods are coming,” Ashok Kumar Shrestha, president of the Nepal Trans-Himalayan Border Commerce Association, told the Post. “We expect the remaining 10 percent to be delivered soon.”

China is Nepal's second-largest trading partner after India, but intermittent border closures by the northern neighbour have hurt Nepali traders.

Many have been pushed towards bankruptcy as merchandise worth billions were locked up for months after China slammed the border shut over Covid concerns.

Exact figures are not available, but merchants say they suffered massive losses when goods ordered for Dashain last year, the key festival shopping season, were not delivered on time.

Traders say that they are still having difficulties transporting their goods stranded in Lhasa because the Tibetan capital is still under lockdown. “There are no porters to load the goods,” said Shrestha.

Last month, Beijing announced a strict lockdown in Tibet following a resurgence in Covid-19 infections, preventing goods ordered for the festive season from passing across the border.

China closed the Tatopani border point on August 10, and the second major transit point at Rasuwagadhi on August 14. The border closures came a few days after Foreign Minister Narayan Khadka's visit to the northern neighbour when the Chinese side had agreed to open it for two-way trade.

The border closure had greatly worried Nepali traders as they would have suffered heavy losses had their shipments not arrived on time for the Dashain shopping season.

They had been making the rounds of the ministers and the prime minister, asking them to talk to the Chinese authorities to let their goods pass.

Nepali officials raised the issue during the visit of top Chinese politician Li Zhanshu to Nepal on September 12.

During a meeting with Prime Minister Sher Bahadur Deuba on September 13, Li assured him that China would reopen the border ports shortly after controlling Covid-19 cases in Tibet while facilitating the passage of containers carrying goods and supplies for the upcoming festivals.

Beijing then ordered the release of the stranded goods by September 27. Traders said they doubted their cargo would arrive before Dashain.

Nepal imports goods like electronics, clothes, footwear, clothing accessories and household goods like bed-sheets and curtains for its biggest festivals Dashain and Tihar from China.

“We are consoling ourselves that at least the goods that had been stranded for months on the other side of the border have arrived. We had lost hope that there would be Dashain business,” Shrestha said. “Unlike in past years, we may not face a big loss this year.”

Importing goods is not easy in the current economic situation as the government has imposed various restrictions.

The embargo on automobiles, mobile phones, liquor and motorcycles will last until October 14.

An import ban on 10 types of products deemed “luxury goods” has been in place since April 26 to conserve foreign currency reserves.

On August 30, the government lifted the ban on six items—tobacco products, diamonds, television sets larger than 32 inches, toys, cards and snacks.

It is difficult getting loans from banks, and on top of that, the interest rate has gone through the roof, traders say.

China has been imposing a one-way trade rule since the Covid-19 pandemic started in early 2020. Chinese truckers normally deliver the goods ordered by Nepali traders on the Nepal side and return with empty containers. The restriction on exports remains unchanged.

Punya Bikram Khadka, director of the Department of Customs, said that 21 Chinese containers were arriving from the Rasuwagadhi trade point and three from Tatopani point daily.

“Almost all the stranded trucks have arrived in Nepal as Chinese customs officials have communicated to us,” he said. "The opening of two-way trade needs to be resolved diplomatically. There have been discussions regarding two-way trade.”

Nepal looked towards its northern border to diversify trade after India’s border blockade in 2015.

A slew of agreements was signed, including one on trade and transit, which allowed Nepal to access seven Chinese sea and land ports for Nepal’s third country trade. The third-country trade via China also raised hopes that Nepal would finally come out of its complete dependence on India.

But with China not allowing cargo trucks to enter Nepal smoothly, according to traders, concerns have risen if Nepal indeed can conduct third-country trade via its northern neighbour.

According to the Department of Customs, Nepal’s imports from China declined 13.34 percent to Rs37.12 billion in the first two months of the current fiscal year. The trade deficit with China amounted to Rs37 billion in the first two months of the current fiscal year ended mid-September.

The closure of the Chinese border in early 2020 affected many Nepali entrepreneurs exporting goods to China. The Kerung and Tatopani border points have been re-opened, but neither export nor import trade has picked up.

Nepal’s exports to China declined 21.58 percent to Rs123.92 million in the first two months of the current fiscal year.

According to the Department of Customs, Nepal’s annual imports from China increased 13.19 percent in the last fiscal year ended in mid-July.

The country imported goods worth Rs264.78 billion. But exports from Nepal to China plunged 25 percent to Rs808.75 million in the last fiscal year from Rs1 billion in the previous fiscal year.