China sends big goods consignment to Nepal to rival India

BEIJING: The first major consignment of goods worth $2.8 million has left the Chinese border for Nepali capital of 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 two sides across difficult mountain terrain, observers said.

The move, which involves transporting goods of daily use, electronic and electrical appliances, will severely hit Indian businesses which had unfettered access to the Nepali market for decades. Dozens of trucks set off from the Tibetan border port of Gyirong for Kathmandu, which is 860 km away, Chinese news agency Xinhua said.

China has been actively encouraging Kathmandu to reduce Nepal's dependence on India for the supply of goods and services like energy and telecommunication since early this year.

Nepal signed an agreement with China on movement and exchange of containers a week ago. Last month, Nepali Telecom entered into a deal for use of Chinese telecommunication goods and facilities.

The flow of goods from China, its northern neighbour, will encourage Nepal to accept the Chinese offer for rail connectivity, observers said.

"Nepali Prime Minister Prachanda is encouraging this move because he wants to persuade Chinese president Xi Jinping to visit Nepal. Such a visit will enhance his image," Pramod Jaiswal, senior fellow with the Institute of Peace and Conflict Studies told TNN.

"I think China also wants Prachanda to continue in the post for long. His rival, Sher Bahadur Deuba, recently attended a meeting in which the prime minister of the Tibetan government in exile was present. China would not have liked this at all," Jaiswal said.
The consignment of shoes, cloths, hats, furniture, kitchen utilities, appliances and building material has already traversed a 5,200-km long journey by train from the south Chinese province of Guangdong to the Tibetan city of Xigeze before they were loaded onto trucks, Xinhua said.

The high cost of transporting across 6,000 kms from Guangdong would make push up the price of Chinese goods in the normal course. But official agencies in China are subsidizing the cost to ensure they are able to compete with products from India, observers said.

China and Nepal signed an agreement for connecting the two countries with a railway line during the Beijing visit by former Nepali prime minister K P Sharma Oli last March. But planning work on the project was shelved due to political turmoil and replacement of Oli in the prime minister's position.

"The trip between Guangzhou and Gyirong takes about five to six days, much shorter than the 20 days for sea transport," the Chinese media quoted Yao Yanfeng, general manager of the freight carrier Tibet Tianzhi Import and Export Co. Ltd., as saying.

"The time could be cut further to 3.7 days in the future,' the Xinhua report quoted him as saying.

"In the slower winter season, the train and trucks will make a round trip every one or two weeks. In the busy season next year, there will be two to three per week and, eventually, we're aiming for four to five trips per week," Yao said.