Beijing -- Nepal has benefited from China's economic boom and will pay close attention to China's investment as the relations with its giant neighbor are crucial to Nepal's overall economic development, said Nishchal N. Pandey, Director of the Centre for South Asian Studies.
"How to attract Chinese investment is the priority for every new administration of Nepal," Pandey added.
A forum on China-Nepal Business Development was held on December 17 in Beijing, where Nepali Ambassador to China, Leela Mani Paudyal, welcomed investment from Chinese businessmen, especially in infrastructure construction.
Paudyal said water and power utilities, infrastructure and mining are the main areas for investment. He praised China's technology and business management. "Large Chinese companies have already invested in Nepal, including Huawei, ZTE and China Gezhouba Group Co. There are also many other Chinese companies showing great interest in Nepal's potential," he said at the forum.
Trade and cooperation in the fields of tourism, transportation and construction are the top three areas of focus between China and Nepal, and the list is expected to expand further, said Gu Xueming, President of Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.
Gu added Chinese companies are the main participants in the contract market in Nepal with a growing enthusiasm to invest in the country.
Since 2013, there have been 229 contracts signed between Chinese companies and Nepal, valued at $3.32 billion with $1.88 billion already closed. The biggest value of the signed contracts is the highway project connecting Kathmandu with Hetauda, which is worth $590 million and covers transportation, water and power utilities, water conservancy and communications engineering.
Rupak Sapkota, General Secretary of the Nepal Institute for Strategic Analyses, noted Nepal's economic development relies on the support of neighbor countries and other international aid agencies.
"From Nepal's experience, most of the aid from Western countries is put on the soft power, such as democracy and human rights. Within this context, Nepal hopes to attract more foreign investment from its neighbors, namely China and India," Sapkota said.
The construction of the Lhasa-Xigaze-Gyirong railway is significant for Nepal's economic development. On one hand, it will bring more Chinese tourists to Nepal; on the other hand, it will create opportunities for Nepal's exports.
Sapkota hoped the railway could extend to Katmandu and said China supports Nepal in carrying out the relevant research on its viability. The length of the railway is 550 kilometers, connecting China's Tibet and Nepal's Katmandu. It is expected to cost over $8 billion.
As a result, the National Planning Commission of Nepal raised a plan called "Envisioning Nepal 2030", aiming to bring about a relatively prosperous economy in Nepal by 2030. In order to realize this goal, Nepal needs an investment of $7 billion to $8 billion, of which $5 billion to $7 billion from foreign investment.
According to the statistics from the Nepal government, China's investment to Nepal has championed for the second consecutive years and become the biggest source of foreign investment.
With China's growing investment in Nepal, some problems have appeared in recent years. For example, the first hydropower station built and operated by a Chinese company, Marsyangdi A Hydropower Station, was disrupted following a strike of workers there.
In addition to the investment, tourism is another area for China and Nepal to explore.
"There are direct flights between Katmandu and six other cities in China. China is the largest source of foreign investment, the second largest trade partner and the second largest source of tourists," Ambassador Paudyal said during the forum, adding it hopes to attract 2 million tourists to Nepal by 2020.
Source: Global Times
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