Some experts chose to define the ties between Nepal and China as an epitome of good friendship. And, the level of earnestness with which the two countries have understood the national interest of each other gives little room to completely negate this definition.
It will be strictly irrational to judge the willingness exhibited by the Chinese establishment to assist Nepal in its every political transition as an insincerely ad hoc behaviour.
Despite her mounting clout in global arena, China has never deemed it appropriate to capitalize upon the political fluidity, in which Nepal has often been reeled under. It does not need to cite a particular example to confirm that China has always treated her relationships with Nepal from a strategic high and with a long-term view.
The frequent assurance on the part of China that it will adopt every possible measure to enable Nepal to preserve its independence, sovereignty and national integrity corroborates the fact that the emerging super power always wishes for a greater well-being of Nepal.
It is not a blurred fact that India, the southern neighbour, has always looked for the opportunity to throw its diplomatic and military weight around in the sub-continent to assert its regional supremacy. And, of course, New Delhi has only indulged itself in skillful exploitation of Nepal's crisis to its advantage. But, Beijing has always been benevolent as far as lending generous support to Nepal to tide over its grave problems goes.
By continuously abiding by the principle of non-interference in other's domestic affairs, China has been respecting the political system and development path chosen by Nepali people.
In response, Nepal has also always supported the Chinese people in their exploration on the socialist path and their choice of the policy of reform and opening-up.
Most importantly, Nepali people have also ceaselessly upheld the "One China Policy" by trying to prevent any forces to engage in activities to split China on the soil of Nepal.
Bilateral relations in economy
Tourism: Some years ago, the number of Chinese tourists arriving in Nepal could be counted in fingers. Now, the Chinese tourists occupy significant pie of the total share of Nepali tourism industry. As per the latest tourists arrival reports released by Nepal Tourism Board, the number of Chinese tourists coming to Nepal in August surged by 87 percent to 1031 from 550 last August. The increment is the highest compared to the arrivals of tourists from other countries.
Chinese tourists now cover four percent of total tourist arrivals in Nepal which stands at fifth position after India, USA, U.K and Japan as far as the figure of tourist arrivals over the last eight months from January to August is calculated. It has not been many years China confirmed Nepal as a outbound destination for Chinese tourists. It is an important achievement for Nepal but there is still enough room for further augmentation in Chinese tourists.
In synch with the growing flow of Chinese tourists to Nepal, China Eastern Airlines is gearing up to extend its wings to Nepal by launching flights from Kunming to Kathmandu.
The lack of adequate air service between the two countries airlines has strongly been considered as a major bottleneck as far as surge in Chinese tourists to Nepal goes.
Although the bilateral trade between Nepal has witnessed an upward spiral over last few years, it has, definitely, not been in favour of Nepali economy. According to statistics released by Nepal Trade Promotion Center, Nepal exported goods worth Rs.736.40 million to China in the fiscal year 2007/08 against Chinese imports of Rs. 22.25 billion. It means Nepal is bearing a trade deficit of Rs. 21.51 billion with the northern neighbour.
Nepal has requested China for few years to provide a duty-free access to 497 Nepali goods in Chinese market. Nepal has also sought 50 percent duty concession on Nepal's export to China. However, there has not been any breakthrough on these issues.
Although Nepal's export to third countries relative to India has increased over the last three years, Indian market covers 60.9 percent of Nepal's total exports, according to annual reports of Nepal Rastra Bank of fiscal year 2008/09. The share of import of India is also as high as 57.6 percent.
India has been enjoying more political leverage in Nepali political arena due to Nepal's over dependence on India in trade.
Due to difficult terrains and few border points between Nepal and China coupled with Nepal's uncompetitive industries, the volume of Nepal's exports to China is very limited.
In the present situation, Nepal's exports can only go up in China if it provides certain concessions to Nepali products.
Nepal has sought Chinese assistance in constructing dry pot in Tatopani and establishing special economic zones in Panchkhal of Kavre, which would help Nepal to boost up its exports to China.
China is ranked third among the countries that brought the biggest amount of foreign direct investment (FDI) in Nepal in the fiscal year 2008/09 after India and USA, according to NRB's annual report. However, the country witnessed a decline in the amount of FDI in the last fiscal year due to unfavourable investment climate.
In the previous fiscal year 2007/08 too, China stood in fourth position after India, USA, South Korea, according to the data of Department of Industries (DoI). Chinese FDI remained at Rs 3.76 billion up to FY 2007/08 against Rs. 17.98 billion from India, Rs 4.72 billion from USA and Rs 3.95 billion from South Korea. Chinese investment remained at Rs. 231 million in F.Y 2007/08.
Chinese investments are basically concentrated on construction, energy, manufacturing, mineral, services and tourism sector as per the record of FY 2007/08.
These evidences show China has become an important investment partner in Nepali economy. Such being the case, Nepal can attract more Chinese investment if favourable investment climate is created in the country.
Chinese Aid: China has been generously supporting Nepal in its development activities for the last five decades.
China increased its assistance to Nepal by 50 percent from 100 million Yuan to 150 million Yuan during the visit of then foreign minister Upendra Yadav.
During the recent visit of foreign minter Sujata Koirala to China, the two sides signed three letters of exchange on development cooperation projects:1. Cleaning Vehicles and Equipment, 2. Tatopani Frontier Inspection Station (including construction of the Frontier Inspection Building, Apartment Building, Parking Lot and auxiliary facilities), and 3. Survey for the Project on Improvement of the Ring Road in Kathmandu.
She also requested the Chinese side to provide duty-free access for 497 Nepali products into their market and support for the establishment of Special Economic Zones (SEZs) with a view to boosting bilateral trade and investment. In response, the Chinese Foreign Minister assured that the next meeting of the Integrated Technical and Economic Committee will look into the matter of duty-free access.
China has also assured to finance huge projects after detail discussions between the relevant authorities of the two countries about the development of hydropower and infrastructure building with concessional loans. About the possible railway connection to Nepal, the Chinese side said detail technical study would be initiated.
During the recent visit of politburo member of Chinese Communist Party Zhang Gaoli to Nepal, the two sides also signed a Memorandum of Understanding on increasing the quota for Nepali students at various medical colleges in China from 200 to 400. Similarly, China has also agreed to increase the number of medical scholarship from 10 to 20.
Among others, construction of flyover highways in Katmandu&rsquos busiest points and 40 trucks meant for wastage disposal of Katmandu&rsquos garbage are other proposals Koirala is carrying to table with her Chinese counterpart.
Ministry officials said the foreign minister will be putting formal request with China for US$ 1billion soft loan through Exim bank for construction of big infrastructure projects.