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Beijing proposes Tibet-Nepal ‘Border Economic Zones’

October 3, 2016

Kathmandu Post, September 29, 2016 - China has proposed to establish ‘Border Economic Zones’ on both sides of the border between Nepal and China during a bilateral meeting held in Lhasa last week, Nepali officials participating in the meeting said.

The Chinese side made such a proposal to establish industries to increase economic activities across the border points during a meeting of Nepal-China Trade Facilitation Committee. The committee is a bilateral mechanism between Nepal and Tibet Authority of China to promote trade and settle issues for trade and economic engagement.

“They said that the establishment of border economic zones will help the development of border areas on both sides,” said Joint Secretary at the Ministry of Commerce Rabi Shankar Sainju, the leader of the Nepali delegation that also included officials of the Ministry of Industry, the Ministry of Agriculture, the Department of Customs, and the Nepal Rastra Bank.

According to Sainju, the Chinese side was also eager to help Nepal to establish such zones. During the meeting, Nepal asked the Chinese side to complete Inland Container Depot in Rasuwagadhi at the earliest and arrange customs officials on the Chinese side across the border from Korala, Hilsa and Kimathanka.

“They are positive towards our suggestions. But they have doubts about re-establishing customs points at Kodari to operate Tatopani route saying that they are awaiting the report of geological survey of the area after last year’s earthquakes,” said Sainju. According to him, the Chinese side is ready to open Hilsa border point at the earliest if the necessary infrastructure are ready on the Nepal side. Although Nepal has started constructing road from Hilsa to Simikot, the district headquarters of Humla, it has not been completed yet.

The road on the Nepal side is expected to help develop Hilsa into another trade route as it has been popular for tourists visiting Kailash-Manasarovar. The two countries signed an agreement to build the border bridge in Hilsa with the Chinese assistance during former prime minister KP Sharma Oli’s visit to China in March.

Nepal also requested China to adopt flexibility in rules of origin for easy entry of Nepali goods, address time difference in customs office operation between the two countries and help Nepal establish quarantine facilities.

“They said that they would talk to the central government on the matters,” said Sainju.
Nepal once again requested the Chinese side to make available duty free access to Nepali goods in six-digit harmonized code from current eight which will cover broad range of products compared to categorization of goods on eight digit harmonized codes.

China has provided duty free access to over 8,000 goods to Nepal and the country has been failing to utilise the facility particularly due to small export basket and problems related non-tariff barriers from the Chinese authorities.

According to Sainju, Nepal also requested the Chinese side to take initiative to open Chinese bank branches in Nepal amid increasing bilateral trade and investment.

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