China to provide USD 118 million assistance to Nepal, promises to expedite work on BRI projects

During the talks, Khadka reiterated Nepal's unwavering commitment to the one-China policy and assured that the Nepali territory will not be allowed to be used for any activity against China.

Published: 11th August 2022 07:24 PM  |   Last Updated: 11th August 2022 07:24 PM   |  A+A-

Chinese Foreign Minister Wang Yi. (Photo | AP)

Chinese Foreign Minister Wang Yi. (Photo | AP)


BEIJING:  Facing headwinds over its South Asia push after Sri Lanka's worst economic crisis, China has warmed up to Nepal by pledging USD 118 million in aid and announcing a slew of trade concessions while vowing to speed up work on the stalled BRI projects.

Chinese Foreign Minister Wang Yi announced the concessions for Nepal in his meeting with his Nepalese counterpart Narayan Khadka in the eastern Chinese city of Qingdao on Wednesday.

Khadka was on his first visit to China since Sher Bahadur Deuba took over as Prime Minister of Nepal replacing the pro-Beijing K P Sharma Oli last year after which Kathmandu struck a more balanced foreign policy, firming up ties with India and with the US.

Early this year, China expressed concern over the Nepal Parliament's ratification of the contentious US-funded USD 500 million Millennium Challenge Corporation (MCC) compact, ending months of deadlock between the Nepalese political parties.

Foreign Minister Wang announced USD 118 million in aid to Nepal and fund the feasibility study of the China-Nepal cross-border railway through the Himalayas via Tibet over which experts have raised concerns about the likely damage it could cause to the fragile ecosystem.

China will offer zero tariff treatment for 98 per cent of export items from Nepal that will come into effect from September 1 this year, Chinese Foreign Ministry spokesman Wang Wenbin told a media briefing here on Thursday on the Wang-Khadka talks.

During the talks, Khadka reiterated Nepal's unwavering commitment to the one-China policy and assured that the Nepali territory will not be allowed to be used for any activity against China.

Beijing is seeking its friends and allies to firmly ratify the one-China policy after US House Speaker Nancy Pelosi riled China by visiting Taiwan, which China claims as part of its mainland.

Since her visit last week, China conducted week-long drills around Taiwan and virtually laid seize to the self-ruled island.

For his part, Wang reiterated to Khadka China's continued and unconditional support for Nepal's sovereignty, independence and territorial integrity and assured support for the landlocked country's development endeavours as per the priority of the Government of Nepal, according to a statement issued by the Nepalese Foreign Ministry.

Both sides agreed to form a bilateral technical committee to make necessary preparation for the functioning of the existing mechanism of the Nepal-China Joint Boundary Inspection Committee, it said.

The initiative comes in the backdrop of allegations of encroachment on Nepalese territory by China, which Beijing has denied.

Nepal also wanted China to implement various multi-billion Belt and Road Initiative (BRI) projects which have remained stuck like the Chinese projects in Sri Lanka and Pakistan in recent years.

In the ongoing financial crisis in Sri Lanka which led to the virtual bankruptcy of the island nation, China, which has billions of dollars of investments leading to criticism of debt traps, offered about USD 73 million in aid and a large amount of rice but declined to provide USD 2.

5 billion bridge finance or Colombo's request to reschedule its loans to China.

The Chinese disinclination to step in proactively to help Sri Lanka while India provided nearly USD 4 billion assistance prompted former Sri Lankan President Gotabaya Rajapaksa to declare that Beijing is shifting its strategic focus into Southeast Asia from South Asia.

Rajapaksa fled the country due to mounting protests and resigned last month from Singapore. Nepal also called for timely implementation of the Chinese projects stuck since 2020 due to the covid pandemic.

The two ministers expressed their commitment for the timely implementation of the agreements signed and understandings reached during high-level visits in the past, the Nepal Foreign Ministry statement said. They agreed to expedite the implementation of China-assisted projects in Nepal.

On this, the Chinese side assured the Nepali delegation that China will soon start the construction works of the second phase of the Kathmandu Ring Road Improvement Project, it said.

"The two foreign ministers took stock of overall aspects of Nepal-China relations and agreed to promote further cooperation in various sectors, including trade, connectivity, investment, health, tourism, poverty alleviation, agriculture, disaster management, education, culture, and people-to-people exchanges, among others," the statement said.

Both sides expressed satisfaction over the progress made in a range of matters of bilateral cooperation since the official visit of Wang to Nepal in March this year.

China will provide additional covid-19 vaccines and related medical assistance as much as required by the Himalayan nation, it said.

The two sides will negotiate and conclude an implementation plan for Belt and Road cooperation as soon as possible, and will convene a meeting of the Joint Commission on Economy and Trade and a meeting of the Working Group on Facilitating Trade within this year, the Chinese Foreign Ministry statement said.

"China welcomes Nepal's efforts to export more tea, medical herbs and farm and pasture products to China, and encourages Chinese enterprises to invest in Nepal, so as to help the country develop manufacturing and modern agriculture and enhance its capacity for self-driven development," it said.

The two sides also decided to establish a joint mechanism for pandemic control in border ports.

They agreed to open Rasuwa-Kyerungand Tatopani-Jangmuports for two-way trade and Hilsa-Pulang port for one-way trade as soon as the fresh wave of covid-19 pandemic in Tibet Autonomous Region of China is controlled.

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