Increasing Exports to China
China has recently risen as Nepal’s fourth largest exporter during the first five months of 2012/13. The exports from Nepal to China have increased by over 250 percent, a staggering figure that hints at the hidden potential of China’s landlocked neighbor. The other three main exporting countries of Nepalese goods include India, the USA and Bangladesh.
Nepal’s top five exports to China include medicinal herbs, animal hide and skin, wheat flour, metal statutes, and carpets. However, the export of medicinal herbs, the chief export to China, has increased by 478 percent. This sudden rise is a direct result of a substantial commercialization of medicinal herbs farming in Nepal. According to data gathered by the Trade and Expert Promotion Center (TEPC), from January to May 2012, China exported goods worth Rs. 1.21 billion from Nepal as compared to Rs. 342.4 million in the same period last year, showing an increase of 36.7 percent. This comes at a time when Nepal, mired by political instability, is looking to correct its balance of payments and stabilize its economic structure, which has taken a hard hit due to national politics.
In terms of other exports, the economic recession in Europe, the main market for Nepali carpets, compelled Nepal to re-prioritize and explore Chinese markets. The export of carpets to China, therefore, increased by Rs. 68.9 million. The liberal trade policies of China and Nepal, allow the two neighbors to easily improve their bilateral trade relations.