China and Nepal sign off on ports deal to ease Kathmandu’s dependence on India for trade
- Nepal must wait until infrastructure is improved to begin trade through China
- Kathmandu turned to Beijing after 2015 Indian blockade led to economic crisis
China and Nepal have signed a deal sealing a 2016 agreement to grant the landlocked Himalayan country access to Chinese seaports and land facilities for trade.
In Beijing on Monday, Nepalese President Bidya Devi Bhandari and Chinese President Xi Jinping witnessed the signing of a protocol to allow Nepal access to seaports at Tianjin, Shenzhen, Lianyungang and Zhanjiang and road and rail facilities at Lanzhou, Lhasa and Shigatse for third-country import, Nepal’s Kathmandu Post reported on Tuesday.
It would also allow Nepal to export goods through China at six other, unspecified points, the report said, reducing Nepal’s dependence upon India for access to international markets.
The Nepalese leader’s nine-day trip to China included talks with Xi and attendance at the second Belt and Road Forum to discuss China’s New Silk Road infrastructure plan.
The protocol has been in the pipeline since Beijing and Kathmandu signed the Transit and Transportation Agreement in March 2016, months after an Indian border blockade was lifted.
The report quoted officials and experts as saying that the agreement did not mean that China would supplant India – Nepali businesses would not able to use Chinese ports until infrastructure in the Himalayan nation improved, they said.
Cooperation with China best for India
Long Xingchun, director of Centre of India Studies at China West Normal University, said the protocol was “largely symbolic since most of Nepal’s external trade will still rely on passing through India, but it does help Nepal’s bargaining power when dealing with India”.
Nepal, a nation of nearly 30 million people, is the focus of rivalry between the two Asian powers, with a surge of Chinese investment and infrastructure development reshaping a region long considered to be India’s backyard.
India is Nepal’s biggest trading partner, accounting for about two-thirds of Nepal’s exports and most of its consumer goods.
India has had a monopoly on Nepal’s fuel supplies for decades, but tensions over a five-month blockade in 2015 prompted Kathmandu to turn to Beijing.
“China knows that it cannot replace India’s role in Nepal,” Long said. “China also does not demand Nepal side with it, which is different from India’s attitude which actually pushes Nepal even further away. For China, it’s fine as long as Nepal remains neutral.”
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