Monday, August 13, 2012

Nepal seeks more investments from China

Nepal needs more Chinese investments in transportation, communication, railways, and expansion of aviation sector to expand the trade and economic relation with its northern neighbor, according to the caretaker Prime Minister Dr Baburam Bhattarai.
During the talks with visiting Chinese vice minister Fu Ying here today at his office, Bhattarai said that China has been supporting to construct many projects in Nepal. "But the country needs more Chinese investments in hydropower, infrastructure development, and tourism like in the development of Lumbini — the birthplace of Lord Buddha — to attract more tourists," he said, adding that West Seti and Pokhara regional airport are also going to be constructed with the Chinese help.
Similarly, Ying said that Nepal has to concentrate on promoting exports of handicrafts to the Chinese market as it is very popular in China. "China is ready to increase its investment in Nepal," she said.
Nepal needs to export more to China to bridge widening trade deficit. In the fiscal year 2009-10, Nepal exported a little over Rs 1 billion whereas imported Rs 39.21 billion from China making a deficit of rs 38.2 billion, though China has given duty free access to some 4,000 Nepali products.
But lack of proper infrastructure like roads and transport arrangements, customs capacity, container yards, quarantine facilities and better technology are some of the bottlenecks in boosting exports to China, despite a huge demand of Nepali products in Chinese market.
Nepal exports most of low value added products including wood products, metal products, textiles, mineral products, leather products, wearing apparel, chemical, rubber, plastic, machinery and equipment, vegetable oils, fats and crops, whereas Nepal imports high value products including wearing apparel, textiles, electronic equipment, machinery and equipment, leather products, vegetables, fruits, nuts, chemical, rubber, plastic, manufacturers, metal products and motor vehicles and parts.
After the construction of Panchkhal dry port with the Chinese assistance, Nepal's export to China could see a growth, according to the traders.
The northern neighbour China is the second largest exporter to Nepal after India, whereas China ranks Nepal's eighth largest importer.
China contributed some 1.7 per cent of the total foreign aid received by the country in the fiscal year 2010-11. China has committed $33 million under transportation sector and $129 million under the electricity and energy sector, though the actual disbursement in the fiscal year 2010-11 stood at $18.84 million, according to the Development Cooperation Report 2010-11 published by the Finance Ministry.
Bilateral trade
Fiscal Year – Export – Import  
2005-06 – Rs 892.58 million – Rs 12,083.49 million
2006-07—Rs 377.99 million—Rs 16,678.61 million
2007-08 – Rs 736.40 million – Rs 22,255.84 million
2008-09 – Rs 1,847.93 million – Rs 32,852.91 million
2009-10 – Rs 1,008.69 million – Rs 39,218.20 million
(Source: Trade and Export Promotion Centre.)

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