Co-organized by FDDI, the Nepal-China Friendship Forum (NCFF) took place on April 14th, 2016, with the theme: ”the Belt and Road Initiative: Opportunities and Challenges for India, Nepal, China and South Asia”.

The Prime Minister of Nepal sent a congratulatory message to the forum, saying that with further consolidated Nepal-China friendships, China’s “the Belt and Road” Initiative could function as an engine for economic development for Nepal.

Shankar Sharma, former Vice Chairman of National Planning Commission of Nepal, Professor Huang He from the School of International Relations & Public Affairs, Fudan University, Pradeep Gyawali, former Minister and Secretary of the Unified Communist Party of Nepal and Professor Parbir De from the New Delhi-based think-tank Research and Information System for Developing Countries (RIS), made keynote speeches on the forum. Representatives from the Embassy of Nepal, Embassy of China in Nepal and World Bank also participate the forum.

After the forum, the secretary of Nepal's Prime Minister meet with Prof Huang He and other representatives from Fudan Development Institute and had a deep discussion on how to further strengthen the collaboration and search breakthrough under the “Belt and Road” Initiative.

Date: Thursday, 14 April 2016

Venue: Hotel de l’Annapurna, Durbarmarg, Kathmandu

Participants:

Chief Guest: Mr. Pradeep Gyawali, former minister and UML party secretary

Presenters:

1. Prof Prabir De: Research and Information System for Developing Countries (RIS), New Delhi, India.
2. Prof Huang He, Ph.D: School of International Relations & Public Affairs, Fudan University, Shanghai, China.
3. Dr. Shankar Sharma: Economist and former Vice-Chairman, National Planning Commission of Nepal/former Nepalese ambassador to the United States.

The event started with message from Rt. Honorable Mr. K P Sharma Oli, the Prime Minister of Nepal. In his message the PM felicitated Nepal China Friendship Forum (NCFF) for organizing the symposium. The PM reiterated that Nepal and China shared strong socio-economic ties since many centuries and the friendly relations had further been consolidated in the due course of time.

He shared that China’s ‘One Belt, One Road’ mission was for the shared benefit of its neighbors which could play an engine for economic development for Nepal with increased access to its northern neighbor and added, “‘One Belt, One Road apparently is an opportunity for Nepal to shift its position from a land-locked to land-linked nation.”

Welcome by Dr. Kalyan Raj Sharma, President NCFF:

Dr. Kalyan Raj Sharma, President of Nepal China Friendship Forum welcomed the chief guest, the presenters and packed audiences that comprised of academia, diplomats, travel and trade entrepreneurs, media and others. Dr Sharma highlighted that the ‘One Belt One Road’ (OBOR) initiative was essentially a development strategy and frame work which was purposed by President Xi Jing Ping of China. He elucidated, “ the concept of the One Belt , One Road is to jointly devise a regional network of infrastructure , which will help the countries in the region to enter to the global economy with enhanced exchanges in terms of cultural diversification , Information Technology applications thereby fostering the people-to people relation in the region “ and added, “the concept is more about bolstering economy of the region with improved connectivity that  helps coordinate the development strategies of the countries along the Belt and Road, grab the market potential in the region, increase FDI , create demands and job opportunities, develop people-to-people relation and cultural exchanges among the countries. It also benefits the nations with the sharing of each others’ experience and expertise.”

Presentations:

Dr Prabir De and Prof. Huang He made multimedia presentations while Dr. Shankar Sharma spoke from the rostrum on the topic.

Dr Prabir De:

Being an economist I would rather like to speak from the South Asian perspective, particularly the economic roles of China and South Asia rather than making political or strategic statements. Though China is not a South Asian country, some of the country’s provinces like Sichuan, Yunnan and others feel more attached to South Asia. China’s focus on South Asia is mainly guided by business or trade concerns, with focus on its import or export in the region. China has no structural plan to go abroad and invest in FDI. The least developed countries (LDCs) in South Asia, such as Nepal, Bhutan, Bangladesh, Sri Lanka, Maldives and Afghanistan and Pakistan except India, are not part of ARCEP, which is mainly an initiative made by China. Therefore, the concern in the South Asia is that the LDCs are nowhere in this initiative. The other reason is that these countries do not get market access to China. India can sell some of its pharmaceutical products or IT professionals in Shanghai or some of Indian companies may open up factories in China. However, the Chinese authorities do not allow the LDCs including India, to their market access.

The trade deficit is a huge challenge for India and other countries. The South Asian LDCs are producing labor intensive products. They want to shift their positions from labor intensive to capital intensive producers and export these all over the world.

All we need now is a new trade regime, but is it coming up in a real sense?

There are two routes or the corridors. The first is trade route the TPP and ARCEP and other is China’s belt and road initiative. The distinction between the two is that Chinese belt and road is essentially the development of hard powers such as highways, ports, SEZs which involve cooperation whereas TTP or ARCEP focus mainly on commitments. If commitments come on place, we have huge future from belt and road initiative, particularly in the countries where there are tremendous amount of infrastructural deficits. A recent study suggests a total of 3 trillion dollars infrastructural investment for whole Asia to realize this initiative.

Prof Huang He:

President Xi Jinping during his visit of Central Asia and Southeast Asia in 2013 raised the initiative of jointly building the Silk Road Economic Belt and the 21stCentury Maritime Silk Road.

Construction of infrastructure and establishment of regional public goods supply system is key to China-Nepal win-win cooperation. Infrastructure networks are associated with ‘club goods’ wherein a defined number of participating countries, apparently in a form of sub-region, can benefit from spillovers. Thus, expanded or improved physical infrastructure, such as transport links and telecommunication, can significantly increase trade and transactions.

The ‘One Belt One Road’ initiative is open for cooperation. It invites all countries, international or regional organizations for engagements.

In case of Nepal, improved transportation condition can give rise to a lot of transit trades which will add value to the goods produced by Nepal. Given Nepal’s position at the centre of the trade routes, the country can benefit a lot. Once Nepal’s major cities are connected through OBOR, Nepal can benefit by reducing transportation costs significantly. Therefore, from the perspective of new economic geography, the improvement of traffic condition in Nepal is instrumental in accelerating its economic development.

The Chinese companies have the mature technology and efficiency to build high-speed railway and high-grade highways in plateau and mountainous terrains. Besides railways, they have interest in building Nepal’s domestic highway networks.

In South Asia, works need to be done to contain the problems such as pollution, communicable disease, and natural calamities like earthquake etc. since they are inherently cross-border in nature and sometimes lay beyond the control of individual countries.

Hence, China has will and potential to cooperate with the South Asian countries while exploring methods that regional public goods could be utilized along the ‘Belt and Road’ areas.

Dr Shankar Sharma:

This is indeed win-win situation if we could strategically move to realize ‘One Belt One Road’. Connectivity is integral to the building of belt and road which not only include the physical infrastructures but also the soft connections of rules and regulations as well as the connections among the people in the region.

The trade between China and Nepal is very dismal. If we take the statistics of 2014-15, the gross trade volume was less than 104 billion Nepalese rupees, out of which 101 billion was import from China only. Nepal still has more than two-third of its trade with India, so OBOR in essence help Nepal in its trade diversification efforts.

More tourists can come to Nepal from the north. Nepal will also have transit advantage albeit psychological, can be extremely useful. We can also export to Tibet, if we consider the distance between the mainland and Tibet. In such case cement and construction materials can be exported from Nepal.

We need to develop our transport and infrastructure to reap the benefits since poor infrastructure is our major bottleneck. The impending power shortage in Nepal is another bottleneck for development. 

Special Remarks by Chief Guest Mr. Pradeep Gyawali:

‘One Belt, One Road’ initiative is very important, farsighted and visionary approach especially for the developing countries. It is apparently re-innovation of the ancient Silk Road, which will rejuvenate human civilization or development in 21stcentury. Nepal is land-locked, which might be a natural gift or adversary. But, we need to change our position from land-locked to land-linked nation. For, this we require very strong infrastructures. We need broad connections and connectivity through roads, railways, pipelines, cross-border transmissions, high speed internet etc. The Prime Minister’s recent visit to China arrived at 10-Point-Agreement and 15-Point-Joint Statement, where Point No 5 clear speaks about Nepal’s part about belt and road. There should not be doubt when Nepal wishes to expand its connectivity with its neighbors. The developing countries should adopt their own model for development, thus the developed countries should not impose their models upon the developing countries.

Floor Discussion:

The symposium availed the participants to articulate their views and suggestion as well as pose questions to the panelist. Many noted personalities such as Mr. Hiranya Lal Shrestha, former Nepal’s ambassador to Russia, Mr. Purusottam Ojha, former Secretary (Government of Nepal), Mr. Prachanda Man Shrestha, former CEO of Nepal Tourism Board, Mr. Ajaya Dixit, hydro and energy experts among other participants, enthusiastically took part in the discussion.

Mr. Hiranya Lal Shrestha: To make Asia the centre of economic activity we need development of belt and road. Given Nepal’s centrality in the region the shortest corridor to link the region can be Thori-Keirung-Lhasa. It helps bring two largest populations closer.

Mr. Purusottam Ojha: Connecting China to South-Asia through Nepal can play a major role in Nepal’s economic development. There is provision of BCIM road in the initiative, but still not clear about Nepal falling in it, so it should be taken care of.

Mr. Prachanda Man Shrestha: Political, social and economic geographies should be considered for the holistic development of the region. India’s market access to China and vice-versa is crucial in their economic sustainability, in such case the questions arises the how small LDCs between these two giants can be free riders.

Mr. Ajay Dixit: While going to big Chinese cities people are amazed with the infrastructures there. In seventies the Chinese government built trolley buses in the Nepalese capital, but we could not save this green energy user vehicle because of poor management. So, Nepalese leaders should learn from this example before embarking on OBOR initiative.

Vote of Thanks and Closure by Mr. Ram Babu Subedi, Vice-President NCFF:

Mr. Subedi thanks the eminent panelists and audiences present for their time and enthusiastic participation to make the event a success. Hence, the program concluded with Mr. Subedi’s thanksgivings. 

Nepal- China Friendship Forum

Nepal- China Friendship Forum (NCFF) is a non-profit, non- governmental organization committed to strengthen and consolidate people-to-people relations between the two countries. NCFF aims to organize seminars and interaction on timely issues of bilateral relations frequently, so that socio-economic and people-to-people relation between the two countries could take a new height on the basis of mutual cooperation. Personalities representing different sectors of Nepali society are involved and affiliated in the organization.

Nepal and China have completed a journey of six decades after the establishment of diplomatic relations in 1955. Bilateral relations are characterized by equality, ever-lasting friendship and comprehensive cooperation on the basis of the Five Principles of Peaceful Coexistence since long time. Nepal is a founding member of the Asian Infrastructure Investment Bank and participated in the Silk Road Economic Belt project.

Chinese President Xi Jinping put forward the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road during his visit to the Central and Southeast Asian countries in the autumn of 2013. President Xi Jinping met with Nepalese President Ram Baran Yadav during the 2015 Boao Forum for Asia (BFA) in South China’s Hainan Province, welcoming Nepal to participate in the Belt and Road Cooperation.

Inspired by the vision, the Nepal - China Friendship Forum aims to contribute to achieve the goals of "One Belt and One Road" by organizing symposium and other programs in different parts of the country. China's "One Belt and One Road" project is an opportunity for Nepal and other Asian countries to improve their regional and global connectivity.