Facilitate Trade With China

Nepali traders and entrepreneurs are in trouble as Nepal’s two major border points with China, Rasuwagadhi-Keyrung and Tatopani-Jangmu, at the northern borders have remained shut for more than four weeks in a row. This shutdown of the trade and transit points at this time when the markets in Nepal are preparing for the upcoming great festivals is set to affect the supply of prepared goods and raw materials being imported from the northern neighbour. China has been saying that Tibet has been implementing lockdown to contain the recent spread of COVID-19 pandemic which has affected the cross-border flow of goods as well. However, international media reported that the lockdown was imposed with just one and a half dozen recorded cases which is the first contagion since January 2020. 

Despite having multiple high-level exchanges between the two countries, like the visit of Foreign Minister of Nepal, Dr. Narayan Khadka in August this year, and Chinese Foreign Minister, Wang Yi in March 2022, even during the COVID-19 pandemic and multiple promises from China, there has been zero progress in terms of bringing the two border points into operation.  FM Dr. Khadka and his Chinese counterpart Wang, during the visit of the former to China last month had decided to establish a joint mechanism for pandemic control in border ports. They also agreed to open Rasuwa-Keyrung and Tatopani-Jangmu ports for two-way trade and Hilsa-Palung port for one way trade immediately after the fresh wave of COVID-19 in Tibet Autonomous Region of China comes under control. But as the lockdown is extended and Nepali goods are stranded across the border in Chinese land. However, China has cited pandemic as a reason behind the border closure. But goods from China had been coming to Nepal but goods from here couldn’t be sent to the north. 

The bilateral trade between Nepal and China via those northern borders have remained one sided with zero exports from Nepal. Exports to China have been continuously disturbed since the COVID-19 erupted in China in December 2019. In the last fiscal year 2021/22, Nepal imported goods worth Rs. 26.62 billion from China through Rasuwagadhi and Rs. 14.02 billion from Tatopani. Thus, there is a huge trade deficit of Rs. 263.97 billion. Nepal imported goods worth Rs. 264.78 billion from China and exported goods of just Rs. 808 million. In comparison to other trade partners, Nepal fares quite poor in trade with China. The export value to India in the last fiscal is Rs. 155.22 billion, to United States is Rs. 17.99 billion, to Canada is Rs. 1.12 billion and to Australia is Rs. 1.16 billion.

Meanwhile, former Foreign Minister, Sujata Koirala, expressed concerns over the closed border and urged the government to address the problem through diplomatic dialogue with China. Since the halt of the Nepal bound container trucks in China is going to affect the upcoming festival markets, the government should immediately initiate process and dialogue with the northern neighbour to resume the cross-border movement of goods. Since Nepali market during the festival season and for winter dresses and electronic equipment largely depends on China, obstruction at the border is likely to increase the cost of the goods here. The country should try to facilitate the trade even to respect the agreement made last month between the two countries during the Dr. Khadka’s visit to China.