11.12.16

China and Nepal

The first major consignment of goods worth $2.8 million has left the Chinese border for Nepalese capital Kathmandu. This is the biggest goods movement between the two countries since 2005 when China built what it calls the Friendship Highway to link towns on either side across difficult mountain terrain observers said.
The move, involving transporting goods of daily use, electronic and electrical appliances, is expected to severely hit Indian businesses that have had unfettered access to the Nepali market for decades. Dozens of trucks set off from the Tibetan border port of Gyirong for Kathmandu, 860 km away , Xinhua reported.
China has since early this year encouraged Kathmandu to reduce its dependence on India for supply of goods and services related to energy and telecom. Nepal signed an agreement with China on movement and exchange of containers a week ago. Last month, Nepal Telecom struck a deal to use Chinese telecom infrastructure and facilities.
The flow of goods from China will encourage Nepal to accept the Chinese offer for rail connectivity , observers said.
The consignment of shoes, clothes, hats, furniture, kitchen utilities, appliances and building material has already covered a 5,200-km-long train journey from the south Chinese province of Guangdong to the Tibetan city of Xigeze before they were loaded onto trucks, Xinhua reported.
In the normal course, the cost of transporting goods over 6,000 km would jack up the prices but China is subsidising the cost to ensure the pricing is competitive with products from India, observers said.

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