Sunday, January 11, 2009

Chinese investors urge finance minister for level playing field

The investors from the land of Mao, Nepal's ruling Maoist party's ideal, today urged the government to give them a level playing field. They also complained to one of the chief Maoist ideologues of various hurdles like customs duty, regular strikes, soaring transportation fares, visa renewal problems and unequal treatment in doing business in Nepal.
"Chinese goods have to pay more tariff than Indian ones," they complained at a round-table meeting organised to attract more investment from China by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here today.
Nepal's trade with its northern neighbour China is less in comparison to its Southern neighbour India. "Nepal is southward tilted, and that needs to be balanced," Finance Minister Dr Baburam Bhattarai said adding that a country needed to be economically independent in order to be politically sovereign.
"Nepal needs to take advantage of highly growing economies like India and China, and act as a vibrant bridge between them and not just as a historically defined buffer zone," he added.
Chinese investment started pouring into Nepal after Nepal-China Non-governmental Cooperation Forum's establishment in 1996. According to latest statistics, Nepal has Rs 3.74 billion Chinese investment. But in recent years, it is on a declining trend due to the investment-unfriendly climate.
Dr Bhattarai assured the Chinese investors of creating an investment-friendly climate. "We are bringing an Act to ban strikes in industries soon," he promised, adding that the present hurdles were historical ones like those faced by China in the 1940s.
According to the Department of Industry, there were 165 industries with Chinese investment -- till April 12, 2008 -- that provided employment to 11,000 people especially in service sector (hotels and restaurants), construction, hydropower, food processing, readymade garments and pashmina, hospital and health services and herbal industries. The share of Chinese investment in total Foreign Direct Investment (FDI) stands at 12.54 per cent.
Qiu Guohong, Chinese ambassador to Nepal, speaking on the occasion, said that China attaches great importance to its relationship with Nepal. "China fully supports the government's development priorities but at the same time wants to see a conducive environment for investment," the envoy said adding that only economic development would help fulfil the aspirations of the people. China, a communist country has metaporphised itself as an economic powerhouse with the help of liberal economic policy that their Nepali counterparts lack.
Nepal exported Rs 736.45 million worth goods to China (including Tibetan Autonomous Region of China and Lhasa) during 2007-08 and imported goods worth Rs 22.25 billion that clearly shows the increasing trade deficit between the two neighbours.
"To bridge the trade gap between two centuries-old neighbours, Nepal should lure investment in areas like construction, mining and connectivity," suggested Suraj Vaidya, senior vice-president of FNCCI.
FNCCI preident Kush Kumar Joshi said that government policy was favourable for FDI but investment atmosphere was not favourable.

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