The decision was taken during a 30-minute meeting between Chinese President Xi Jinping and President Ram Baran Yadav today on sidelines of the Boao Forum for Asia in South China's Hainan Province. President Yadav is currently at Hainan and met Chinese President for the first time since Nepal replaced monarchy and became a republic in 2008.
The northern neighbour had last week announced to increase its annual grant to Nepal by over five-fold from RMB 150 million to RMB 800 million (nearly $128 million) to give further boost to its economic agenda in Nepal.
"The package is in addition to the annual grant and will be used to improve the 115-km long Araniko highway that connects both the nations," according to deputy spokesperson at the Foreign Ministry Lekha Nath Bhattarai. "Likewise, China will also be training some 1,500 Nepalis in technical and non-technical sectors over the next five years."
Not long ago, India has – during the prime minister Narendra Modi's visit – also increased a line of credit worth $1 billion to Nepal.
Nepal's increased economic engagement with both northern and southern neighbours is expected to propel development activities in the land-locked country and bridge the infrastructure gap.
Nepal has already expressed its willingness to be part of major Chinese initiatives like the $40 billion Silk Road Economic Belt – that is expected to improve China's connectivity to Europe through a maze of road, rail and port network – and Asian Infrastructure Investment Bank (AIIB). In fact, Nepal is also going to be a founding member of the Bank.
Chinese President on the occasion also welcomed Nepal to participate in the Belt and Road cooperation. "China-Nepal relationship is a model of peaceful coexistence and mutually beneficial cooperation between big and small countries," Xi said, welcoming President Yadav to the annual conference. "China is willing to be Nepal's good friend of mutual respect and mutual support, good partner of common development and common prosperity and good neighbour of mutual assistance in security," he said, suggesting that the two countries should strengthen cooperation in traffic interconnectivity, infrastructure, hydropower development, modernisation of agriculture, science and technology. "China is also willing to negotiate Free Trade Agreement (FTA) with Nepal at an early date."
Calling on both the countries to enhance law-enforcement and security cooperation, Xi asked to be well prepared for a series of commemorative activities as this year marks the 60th anniversary of the establishment of China-Nepal diplomatic ties.
He also called on to beef up cooperation in the areas of youth exchanges and tourism and enhance coordination on multilateral occasions to safeguard their common interests.
China appreciates Nepal's firm support on issues concerning China's core interests, including issues related to Tibet and Taiwan, the Chinese President said, also supporting Nepal's effort in safeguarding independence, sovereignty and territorial integrity. Likewise, President Xi also voiced the hope that Nepal would not allow any forces to use its territory to engage in anti-China separatist activities.
Replying President Xi, President Yadav said Nepal would never allow its territory to be used by any anti-China activities. Nepal also supports China's initiatives of jointly building the Silk Road Economic Belt and 21st-Century Maritime Silk Road, apart from Asian Infrastructure Investment Bank, he said, adding that strengthening cooperation between South Asian Association of Regional Cooperation (SAARC) and China will help promote regional interconnectivity and economic development.
However, China wish to join SAARC at the last year's SAARC grouping's conference at Kathmandu was foiled by India.
Likewise, President Yadav, on the occasion, also said that poverty, hunger and deprivation still exist in many countries. Urging for concerted efforts to resolve the problems he stressed to create a more stable, secure and prosperous future for Asia by ending poverty, hunger and disparities. “Peace and poverty cannot go together," he said, adding that development of the continent as a whole has to, therefore, be a common goal and all countries must find space and resources to grow and prosper.
Saying that lack of adequate infrastructure, low level of industrial base, inadequate capital, lack of technological know-how and shortage of skilled human resources and low level of productive capacity were the problems of Nepal's economy, the President stated such things have resulted in lack of qualitative change in the living standard of people despite the abundance of natural and human resources with enormous potentials of tourism, hydropower and agriculture development options.
The President also appealed the international business community to invest in Nepal as the country offers a liberal and attractive regime for investment.