Kathmandu,Aug.25; Nepal and China signed an Economic and Technical Co-operation Agreement in Beijing Friday coinciding with the 45th anniversary month of the establishment of diplomatic relations between the two countries, reports from the Chinese capital said. The agreement was signed by visiting Nepali Foreign Minister Chakra Prasad Bastola and his Chinese counterpart Tang Jiazuan.

China offered Nepal a grant of Chinese Yuan 50 million equivalent to nearly $6 million to be

invested in projects to be identified later. China has agreed to encourage its business leaders to investment in Nepal, an announcement said.

This was agreed during ministerial level talks between Bastola and Tang.

China also agreed to revive the China Nepal Friendship Association by the end of the year.

The two sides agreed to take effective measures to reduce the widening trade gap in China’s

favour, an announcement said. An invitation has been extended to King Birendra and Queen Aishwarya to visit China at a date convenient to Their Majesties.