Nepal and China signed the execution framework for the Belt and Road Initiative (BRI) in Beijing, indicating that Nepal will soon decide on projects for implementation. The development has come when Nepal PM K P Sharma Oli is on an official visit to China.
Nepal Signs BRI Cooperation Agreement With China
Why In News
- Nepal and China signed the execution framework for the Belt and Road Initiative (BRI) in Beijing, indicating that Nepal will soon decide on projects for implementation. The development has come when Nepal PM K P Sharma Oli is on an official visit to China.
- Nepal Foreign Ministry officials said the framework agreement was signed by the acting foreign secretary and the vice chairman of China’s National Development Reforms Commission, ending speculation triggered by the government’s stance that it will accept only grants for projects under the BRI.
All You Need To Know
- Strengthening Nepal-China Economic Cooperation : framework agreement, signed by Nepal’s Foreign Secretary Amrit Bahadur Rai and Liu Sushe of China’s National Development and Reform Commission, is expected to solidify economic cooperation between the two countries. The BRI aims to create a vast network of infrastructure projects linking China to Southeast Asia, Central Asia, Russia, and Europe. Despite Nepal and China having signed the BRI agreement in 2017, no projects have yet been implemented under the initiative. The new framework agreement is seen as a crucial step towards realising these projects.
- Role of the Trans-Himalayan Connectivity Network : Both countries expressed their readiness to sign an MoU on building the Trans-Himalayan Multi-Dimensional Connectivity Network (THMDCN), focusing on enhancing connectivity in areas such as ports, roads, railways, aviation, power grids, and telecommunications. This initiative is expected to help Nepal transition from a landlocked to a land-linked country. While specific timelines for the projects were not provided, the agreement sets the stage for greater cooperation.
- Investment, Aid, and Technical Assistance : One key negotiation point in the agreement was the language surrounding financial support for the BRI projects. Initially, the Nepali side suggested the term “grant,” but the Chinese side proposed replacing it with “investment.” After discussions, both sides agreed on a compromise, including the term “aid and technical assistance” for project execution. This wording reflects a shift from a clear definition of grants, with some projects potentially being funded through lines of credit, which could involve loans.
- During his four-day visit to China, Prime Minister Oli emphasized that Nepal would benefit greatly from the BRI, noting China’s strong support for Nepal’s development. Oli also called on Chinese investors to consider Nepal as a promising investment destination. He assured them that the country, which has made strides towards political stability, would provide favourable conditions and security for investments. Oli’s visit and the signing of the BRI framework reflect Nepal’s commitment to deepening its bilateral ties with China and enhancing its infrastructure through international collaboration.
Concern For India
- An airport project in Pokhra had been funded by China with a loan of over $200 million. Nepal proceeded with the plan even though India raised serious concerns. Last year, it opened the airport. The airport has been grappling with losses because of lack of international flights.
- This could be partly because of limited demand from airlines, as well as India’s refusal to allow planes using its airspace. Pokhra is around 15-20 minutes from the India border by commercial flight. India was forced to shut its airspace because it posed a national security threat as Nepal downplayed New Delhi’s concerns that China may use the airport to deploy its military aircraft and helicopters
