China to look at free trade, rail deal with Nepal

The Pak Banker - - 6BUSINESS -

BEI­JING: China agreed on Mon­day to con­sider build­ing a rail­way into Nepal and to start a fea­si­bil­ity study for a free trade agree­ment with the im­pov­er­ished, land­locked coun­try, which has been try­ing to lessen its de­pen­dence on its big neigh­bor to the south, In­dia. The Hi­malayan na­tion, that serves as a nat­u­ral buf­fer be­tween China and In­dia, adopted its first post-monar­chy con­sti­tu­tion in Septem­ber hop­ing this would usher in peace and sta­bil­ity af­ter years of con­flict.

But pro­test­ers blocked trucks com­ing in from In­dia, lead­ing to acute short­ages of fuel and medicine. Nepal blamed New Delhi for sid­ing with the pro­test­ers, a charge In­dia de­nied.

The bor­der block­ade ended last month but sup­ply of oil and cook­ing gas is far from nor­mal.

Meet­ing in Bei­jing's Great Hall of the Peo­ple, Nepali Prime Min­is­ter K.P. Oli told Chi­nese Premier Li Ke­qiang he had "come to China with a spe­cial mis­sion" when it came to strength­en­ing re­la­tions. He did not elab­o­rate in front of re­porters.

Hou Yanqi, deputy head of the Chi­nese For­eign Min­istry's Asia Divi­sion, said Oli raised the pos­si­bil­ity of two rail lines, one con­nect­ing three of Nepal's most im­por­tant cities and two other cross­ing the bor­der from China into Nepal.

Hou said the govern­ment would en­cour­age Chi­nese firms to look at the in­ter­nal rail plan, and that China was al­ready plan­ning to ex­tend the rail­way from the Ti­betan city of Shi­gatse to Gyirong on the Nepal bor­der.

"Of course, a fur­ther ex­ten­sion from Gyirong is an even longer-term plan. It's up to geo­graphic and tech­ni­cal con­di­tions, fi­nanc­ing abil­ity. We be­lieve that far in the fu­ture the two will coun­tries be con­nected by rail," she said. The two coun­tries signed a to­tal of 10 agree­ments, in­clud­ing on the fea­si­bil­ity plan for a free trade agree­ment, as well a con­ces­sional loan for a new air­port in Nepal's Pokhara and a fea­si­bil­ity study for oil and gas sur­vey projects.

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