CNI and CCPIT sign MoU to establish the Council
The Confederation of Nepalese Industries (CNI) and the China Council for Promotion of International Trade (CCPIT) have signed a Memorandum of Understanding (MoU) to establish the Nepal-China Business Council. The MoU was signed by CNI President Rajesh Kumar Agrawal and CCPIT Vice-chair Zhang Shaogang in Beijing, China, on Sunday, September 24, 2023. The signing ceremony was held on the occasion of Prime Minister Pushpa Kamal Dahal’s official visit to China.
The Nepal-China Business Council is aimed at promoting bilateral investment and business cooperation between the two countries. The Council will create networking opportunities, arrange business visits, organize events and dialogues, and conduct research and studies on relevant fields. The Council will have four members: two from each side.
CNI President Agrawal expressed his confidence that the Council would play an instrumental role in enhancing the business relations between the two close neighbors and in bringing Chinese investment and technology to Nepal. He said that the Council would act with its visible effects.
Nepal-China trade and investment scenario
Nepal and China share a long history of friendship and cooperation. China is Nepal’s second-largest trading partner and a major source of foreign direct investment (FDI). According to the Trade and Export Promotion Centre (TEPC), Nepal’s trade deficit with China stood at $2.6 billion in the fiscal year 2022/23, accounting for 36 percent of the total trade deficit. Nepal imported goods worth $2.9 billion from China, while exporting goods worth only $300 million.
China is also one of the largest investors in Nepal’s infrastructure, energy, tourism, and manufacturing sectors. According to the Department of Industry (DoI), China ranked first in terms of FDI commitments in Nepal in the fiscal year 2022/23, with $1.1 billion pledged for 132 projects. China has also been providing financial and technical assistance to Nepal for various development projects under the Belt and Road Initiative (BRI).
Opportunities and challenges for Nepal-China business cooperation
The establishment of the Nepal-China Business Council is expected to create new avenues for bilateral trade and investment cooperation. The Council will facilitate the exchange of information, experience, and best practices between the Nepalese and Chinese business communities. The Council will also help to identify potential areas of collaboration, address trade barriers, and promote mutual trust and understanding.
However, there are also some challenges that need to be overcome for enhancing Nepal-China business ties. Some of these challenges include:
- Lack of adequate transport connectivity and customs facilitation between the two countries
- High cost of doing business in Nepal due to poor infrastructure, policy instability, bureaucratic hurdles, and security issues
- Low level of competitiveness and diversification of Nepalese products in the Chinese market
- Limited access to finance, technology, and skilled human resources for Nepalese entrepreneurs
- Lack of awareness and knowledge about the Chinese market, culture, and legal system among Nepalese traders and investors
The Nepal-China Business Council will work to address these challenges and create a conducive environment for bilateral trade and investment. The Council will also seek to leverage the opportunities offered by the BRI, the Trans-Himalayan Multi-dimensional Connectivity Network, and the China-Nepal Free Trade Agreement (FTA).
