Six Domains of Nepal are Expecting Chinese Investors
“During this visit to China, I’ m se e ing Chi n a with curious eyes, as China is experiencing unprecedentedly fast development and global economic development is closely related with China’s economic development. How can we make full use of the opportunities that the global economy brings?” said Bidhya Devi Bhandari, president of Nepal during his recent visit to China to attend the China-nepal Investment Forum held by the CCPIT.
In recent years, Nepal-sino economic and trade relations have kept a sound momentum for development with improving cooperation between enterprises. According to statistics from the Ministry of Commerce, during 20062014 Nepal-sino bilateral trade volume grew from over USD 100 million to around USD 2.3 billion, up by more than 20 times. Apart from rapid development in such domains as trade, tourism and aviation, the Chinese enterprises have also seen increasing investments in Nepal with direct investments of over USD 170 million in Nepal by the end of last year. And there were around 30 Chinese enterprises with big investments in the fields including hydropower, aviation, minerals and medical care.
China’s investors may quickly nudge into the South Asian market through Nepal. China is the second largest trade partner and the second largest source of foreign investment to Nepal. Radish · Pant, chairman of Nepal Investment Bureau particularly mentioned that Nepal is one founding member of the Asian Infrastructure Investment Bank (AIIB) proposed by China. Nepal and China signed Agreement on Avoidance of Double Taxation and Agreement on Bilateral Investment Protection, which may support and protect the investors of both Nepal and China.
What domains are suitable for investment in Nepal?
Radish · Pant, chairman of Nepal Investment Bureau introduced that currently Nepal has six attractive domains for investment.
“First is the hydropower domain. We calculate that by 2030 Nepal will have a demand for 6,000 MW dydropower worth of around USD 1 billion. USD 6.5 billion of investment is needed from the aspect of electricity generation; from the aspect of export, by the year of 2030 the South Asian market will have a tremendous power demand of exceeding 750 GW. Moreover, we have signed an energy agreement with India to protect investments in the power sector. There are also hydropower and clean energy to be exported to some other regions of South Asia. And I hope these energy can also be exported to China,” said Radish · Pant.
Now many investors have made investments in the power domain. For instance, electricity is needed for transportation to other places. And so far Nepal has eight cross-border highcapacity electric wires, including two in the north and six in the south.
It is learned that Nepal is expected to nail down the power trade agreement with India by the end of this year, which
will provide equal market entry to promote power cooperation between Nepal and India. “Energy is our focus, as on one hand we will get tax cut and on the other hand the Nepal government requires less guarantee with land environment protection. And we ensure that all of this will be completed as soon as possible with top priority,” Radish · Pant added.
Radish · Pant introduced that as the second largest country boasting water resources, Nepal possesses over 5,000 rivers of different sizes from Himalaya. Therefore, Nepal has tremendous potential for hydropwer development.
Apart from investment for hydropower, there are some other domains with great potential, such as infrastructure, business, agriculture, minerals and telecommunications.
“If there are many railways across the country, many investors will be attracted and the problem of urban traffic will be solved. Katmandu has a population of 4 million with traffic need and completion of the railways will make travel for Katmandu citizens convenient,” Radish · Pant pointed out.
According to Rajesh ··Qazi Shrestha, chairman of Nepal Chamber of Commerce, the regions around Himalaya are rich in herbal medicine resources. China’s technologies and agricultural development will help Nepal in terms of farming development.
“Nepal has lots of farm products. Farm products and processing of farm products is our focus. We have lots of products, but infrastructure to transport the products to the market is not in place,” Radish · Pant said.
“We hope to intensify efforts in developing cultural tourism and even adventure tourism. And we can also hold some meeting or activities. In the past four years, the number of tourists grew at a rate of 4%. Some months ago, we offered free tourist visa to warmly welcome tourists from China,” Radish · Pant added.
In the year of 2015, Nepal was severely hit by earthquake, which destroyed some infrastructure and thus large-scale reconstruction is ongoing. Rajesh ··Qazi Shrestha, chairman of Nepal Chamber of Commerce said that Nepal highly welcomes China’s existing technology and infrastructure providers to support Nepal for reconstruction. “Nepal is very rich in hydropower resources, and solar energy, wind energy and biomass energy have great potential for development, which may help us to achieve common prosperity.” He said.
According to Bidhya Devi Bhandari, interest rates offered by the banks of Nepal are very competitive, and the government is encouraging China to consider setting up a branch of Bank of China in Nepal in a bid to promote investment.
The CCPIT proactively boosts economic and trade ties between the Chinese enterprises and Nepal counterparts
2016 is the first year of China’s 13th Five-year Plan. During the 13th Five-year Plan period, China’s economy will maintain a high speed of development with an import volume of over USD 1 billion, foreign investment of over USD 500 billion and more than 500 million outbound tourists for traveling, visiting, shopping and tourism, all of which will bring more market and investment opportunities for all the countries including Nepal.
Yin Zonghua, vice chairman of the CCPIT said that as the largest trade and investment promotion agency, the CCPIT has maintained a very close tie with Nepal’s industrial and commercial domain and the CCPIT would like to join hands with Nepal’s counterparts to create more platforms and opportunities for communications between the enterprises of the two sides.
First, the CCPIT will proactively organize the Chinese enterprises to invest in Nepal. As construction of the “Belt and Road” is accelerating, more and more Chinese enterprises would like to invest in Nepal. The CCPIT will jointly hold seminars, introduction and project briefing with Nepal’s relevant business associations and government departments and will provide information consulting and legal support regarding commercial affairs to help the Chinese enterprises learn more about Nepal’s investment environment and project situation.
Second, the CCPIT will greatly support the Chinese enterprises to import from Nepal. During the 13th Five- year Plan period, China will implement a more proactive import policy to import more advanced technical equipment and quality consumer goods. The CCPIT will bring its superiority in terms of connection with the domestic enterprises into full play to support the Nepal government, commercial associations and relevant enterprises to launch product promotion in China and to share Chinese consumers’ recognition towards Nepal’s products. In the mean time, the CCPIT will organize enterprises concerned to conduct negotiations with an aim to launch more quality Nepalese products into the Chinese market.
Third, the CCPIT will proactively conduct communication and cooperation with Nepal’s industrial and commercial circle. So far, the CCPIT has signed cooperation agreements with Nepal Chamber of Industry and Commerce and Nepal Federation of Industries.
Wang Lijie, vice president of China Railway International Corp., said that Nepal now has the second airport project and railway project with a contract volume of $ 107 million. Wang hopes that Nepal will provide necessary preferential policies in terms of taxation, foreign exchange settlement and green channel for customs clearance for the Chinese enterprises to conduct big projects and infrastructure projects in Nepal. Besides, Wang hopes that the Chinese standards and architecture specifications will be applied in the necessary fields. The approval procedures are expected to be handled quickly for the key projects and large- scale programs with Chinese investments. Cultural exchanges between Nepal and China are supposed to be encouraged and boosted for the consideration of deepening mutual understanding.
“Nepal is very rich in hydropower resources, and solar energy, wind energy and biomass energy have great potential for development, which may help us to achieve common prosperity.”