China to provide $118 million assistance to Nepal, promises to expedite work on BRI projects

China has warmed up to Nepal by pledging USD 118 million in aid and announcing a slew of trade concessions while vowing to speed up work on the stalled BRI projects.

Chinese Foreign Minister Wang Yi announced the concessions for Nepal in his meeting with his Nepalese counterpart Narayan Khadka in the eastern Chinese city of Qingdao on Wednesday. Khadka led an 11-member delegation to China earlier this week on the invitation of Chinese Foreign Minister and state councilor Wang Yi.

Khadka was on his first visit to China since Sher Bahadur Deuba took over as Prime Minister of Nepal replacing the pro-Beijing K P Sharma Oli last year after which Kathmandu struck a more balanced foreign policy, firming up ties with India and with the US.

Early this year, China expressed concern over the Nepal Parliament’s ratification of the contentious US-funded USD 500 million Millennium Challenge Corporation (MCC) compact, ending months of deadlock between the Nepalese political parties.

Foreign Minister Wang announced USD 118 million in aid to Nepal and fund the feasibility study of the China-Nepal cross-border railway through the Himalayas via Tibet over which experts have raised concerns about the likely damage it could cause to the fragile ecosystem.

China will offer zero tariff treatment for 98 per cent of export items from Nepal that will come into effect from September 1 this year, Chinese Foreign Ministry spokesman Wang Wenbin told a media briefing here on Thursday on the Wang-Khadka talks.

During the talks, Khadka reiterated Nepal’s unwavering commitment to the one-China policy and assured that the Nepali territory will not be allowed to be used for any activity against China.

For his part, Wang reiterated to Khadka China’s continued and unconditional support for Nepal’s sovereignty, independence and territorial integrity and assured support for the landlocked country’s development endeavours as per the priority of the Government of Nepal, according to a statement issued by the Nepalese Foreign Ministry.

Both sides agreed to form a bilateral technical committee to make necessary preparation for the functioning of the existing mechanism of the Nepal-China Joint Boundary Inspection Committee, it said.

The initiative comes in the backdrop of allegations of encroachment on Nepalese territory by China, which Beijing has denied.

Nepal also wanted China to implement various multi-billion Belt and Road Initiative (BRI) projects which have remained stuck like the Chinese projects in Sri Lanka and Pakistan in recent years.