Economic experts have said that the recent agreement between Nepal and China is a positive development for economic sector of the country and pointed out the need to do more homework to get benefit from the agreement.
Speaking at an interaction at the Reporters’ Club on Sunday, former Finance Minister Badri Prasad Shrestha said that the decision of the Chinese government to provide zero percent custom tariff to 1,550 items for export is positive, but the Nepal government should form suitable policies to get maximum benefit from it.
Stating that Chinese investment in Nepal is very negligible, he urged the government to make supportive policies to attract Chinese investment in the Country, as China was on its way to become the world’s largest economy by 2035.
“The concept of making Nepal as a transit between India and China is very positive and will create more opportunities for Nepal, but the country should develop capacity to exploit the opportunities,” Shrestha added.
Speaking at the same programme, former vice-chairman of National Planning Commission (NPC) Dr Narayan Khadka said that though the recent visit of State Councilor of China, Tang Jiaxuan, was positive from an economic viewpoint, he added there would not be any development in the economic sector unless democracy is restored in the country.
Saying there is substantial change in Chinese foreign policy, Dr Khadka said that China is in favour of early restoration of democracy in Nepal and further Chinese assistance will depend on the political situation of the country.
He also said that Nepal should form long-term policies and develop competitive strengths of Nepalese goods to benefit from the trade with China.
He pointed out the need of bringing policies to attract Chinese investment in hydropower and other projects to benefit from the high growth rate of China.
According to statistics, the volume of export of Nepalese goods to China is less than three billion while import is more than 13 billion.
Another speaker, Dr Shankar Sharma, Vice Chairman of NPC, said exports to China is increasing gradually and the government was working to narrow the trade deficit.
He further said that developing Nepal as a transit economy between India and China would create more opportunities to Nepal. He further said that the government is actively working to prepare infrastructures for developing Nepal as a transit economy.
“Though the volume of trade is very low, we are very optimistic as the volume has increased considerably in last five years,” Sharma added.
Talking about overall economic situation of the country, Dr Sharma said though the economy is passing through a difficult situation, maintaining macroeconomic stability of the country is a major concern of the country.
He further informed that the government is making the service delivery in rural areas intact to avoid humanitarian crisis.
Speaking at the same programme, Chairman of Federation of Nepalese Chambers of Commerce and Industry, Chandi Raj Dhakal and Surendra Bir Malakar, Vice Chairman of Nepal Chambers of Commerce also described the recent agreement between Nepal and China as positive but added that some policy related issues should be resolved seriously to benefit from the agreement.
They said that it is challenging to compete with China even if it provides duty free access to Nepalese goods as China has very high potentiality of production and added that Nepalese industries should develop competitive strengths of goods to penetrate Chinese market.