PM Oli’s China visit to boost Nepal-China ties, aims to increase connectivity and trade

Government ministries are busy ahead of PM Oli’s state visit to China scheduled from June 19 – June 24. PM is expected to cement deals, especially concerning the hydro energy sector, the proposed free trade agreement, and the planned railway connectivity from China to Nepal.

Below are a list of things to be discussed:

Hydro and Energy Sector:
  1. Nepal-China Transmission Grid Connectivity from Rasuwagadhi – Keyrung -Galchi)
  2. Energy trading between the two nations.
  3. Study and possibilities of China investing in Nepal’s hydro-energy sector.

(Note: In a surprising turn of events, the government while unveiling their budget announced that the 750MW West Seti Hydroelectric Project will be built by Nepal with its own resources. The project was earlier given to Three Gorges International Corp, a Chinese state owned company. It is unsure why the project was taken off their hands.)

Increasing Connectivity: 
  1. Linking Nepal and China via railways – a pre-feasibility report is to be submitted by August. Minister for Physical Infrastructure and Transport has said that three cities of Nepal – Kathmandu, Lumbini, and Pokhara will be linked to China via railways within the next three years.
  2. In a recent visit to China by Minister for Foreign Affairs Pradeep Gyawali stated that it would be Nepal’s pride to be involved in China’s ambitious Belt and Road Initiative (BRI). Projects such as cross-border roads, railways, oil pipelines, information highways and energy grids are supposed to be on the PM’s agenda.
  3. Discuss the proposed three border entry additions in the north – Kimathanka, Korola,and Hilsa.
Improved Trade Relations:
  1. PM Oli is sign the Nepal-China Free Trade Agreement.
  2. Further discussions on how trade/businesses/and investments between the two nations can be boosted.
  3. China’s help towards building new oil storage facilities in Nepal.

The PM’s decision to visit China was announced just after Indian PM Modi’s ‘pilgrimage’ to Nepal. The dates were confirmed later, however Oli in a parliamentary briefing had said ‘he would be visiting China soon’. Nepal is increasingly looking to increase bilateral relationship with China, after its relationship with the southern neighbour soured following the imposition of an ‘unofficial border blockade’ in September 2015. The blockade which continued for eight months crippled the Nepalese economy and was dubbed as a ‘humanitarian crisis’. The blockade created a huge supply shortage in essential commodities like fuel, medicines, and food. Nepal learnt a lesson as its sole fuel supplier was Indian Oil Corporation, an Indian state owned company. Efforts have been increased towards reducing Nepal’s dependency upon India since.


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