Speech by Foreign Minister Pradeep Kumar Gyawali at Roundtable organized by China Reform Forum, Beijing

‘Nepal-China Relations in the Twenty-First Century’
Speech by Foreign Minister Pradeep Kumar Gyawali at Roundtable organized by China Reform Forum, Beijing
19 April 2018

Mr. Chairman
Friends of Nepal
Ladies and Gentlemen

Let me begin by thanking China Reform Forum for inviting me to address this Roundtable and share my thoughts on Nepal-China relations on the occasion of my first official visit to China as the Minister for Foreign Affairs of Nepal.

I am glad to learn that the Forum has been making enormous contributions to the policy-making process through informed policy recommendations.

I am sure that there are many areas of development policy where think-tanks in Nepal and China can cooperate together for achieving better development outcomes.

In the process, it will also advance our relations further through exchanges of research findings and scholar’s exchanges.

In my remarks today, I will first highlight the glorious history of Nepal-China relations, Nepal’s policy on its relations with China, and then briefly touch upon our development challenges before concluding with what I consider should be the priorities of Nepal-China relations in the 21st century.

Dear Friends:

The history of Nepal-China relations goes long beyond the formal establishment of our diplomatic relations in1955.

The roots of Nepal-China relations may be traced back to the caravan trade millennia ago. This so-called ‘Tea Horse Trail’ that originated in South West China and passed through tortures mountain passes to the vast swath of southern slope of Himalayas, connecting Nepal and China, was a thoroughfare for civilizational exchanges. Our ancestors took risks to traversing mighty Himalayas in pursuit of better life and significantly contributed for advancement of civilization across them.

The retinue of traders, horsemen and caravan plying this route brought not only Buddhism but also other features of Nepali culture and craftsmanship to China through Tibet, Yunnan, and Sichuan and beyond.

No surprise then that Nepal’s Ranjana script is found in ancient relics housed in the Jiangxi and Beijing.

Recent scholarship has corroborated such historical interface, and shown that there existed intense cultural exchange and commercial interchange between South Western China and Nepal since ancient times.

This exchange facilitated not just cross-cultural understanding and cross-fertilization of ideas but also proliferation of profound civilizational values of acceptance, plurality and inclusivity as preached by Buddhism and Confucius alike. Lord Buddha’s teachings have profoundly impacted the socio-cultural lives of the Nepali and Chinese peoples.

There is a long history of social contact like travel of Faxian, Buddhabhadra and Xuan Zan across the Himalayas from early 5th century to 7th century AD. Their travelogue and translations have richly contributed in disseminating Buddha’s teachings in China.

Likewise, Bhrikuti, the Nepali princess married to Tibetan prince Song-tsen-Gampo in the 7th century, helped greatly to spread Budhhism across China.

Araniko, popularly known as ‘Anige’, upon invitation of Emperor Kublai Khan, travelled all the way from Nepal to Beijing in the 13th century and built the famous White Pagoda, also known as BáitǎSì, which is still standing high in the heart of Beijing reflecting deep rooted friendship between the two countries.

Dear Friends:

Such extra-ordinary relations between our two countries based on historical legacy and geographical logic have gained great momentum in the sixty-two years of diplomatic relations.

The governments of the two countries have established several institutional mechanisms for regular dialogue. The regular exchange of visits at high levels has contributed in deepening mutual understanding and communication at top levels.

Our cultural, trade and economic relations are growing fast even though we have yet to fully resolve several challenges such as burgeoning trade deficit and infrastructural constraints.

Our people-to-people relations are growing equally fast. This was in full display following the devastating earthquake of 2015 that killed around 9000 people and left thousands homeless in Nepal.

As the Chinese saying goes, ‘Only when the year grows cold do we see that the pine and cypress are the last to fade; only when we get into trouble do we know who our genuine friends are’.

China is a real, trusted friend for Nepal, and this was amply demonstrated in the aftermath of the earthquake.

The prompt support and assistance Nepal received from China for rescue and relief as well for reconstruction was overwhelming and unprecedented.

Nepali people fondly recall the generous support accorded by Chinese people and government be it for any natural or man-made crises Nepal faces or be it for the socio-economic development of the country.

In turn, the Government and the people of Nepal have always stood with China in times of need and in the international forums. One China policy and not allowing anti-Chinese activities in our soil forms the core of our friendship with China. On China’s part, it has consistently and firmly supported Nepal’s sovereignty, territorial integrity and political independence, faithfully observing the principle of non-interference in our internal affairs.

Our relations are based on the Five Principles of Peaceful Coexistence and their sincere pursuit by both countries has made us  trusted friends and reliable partners. Our relationship is marked by mutual trust, understanding, goodwill, cooperation and appreciation of and respect for each other’s concerns and sensitivities.

Today, we are among the founding members of AIIB and a partner under the Belt and Road Initiative, both China-led global initiatives. That is the level of commitment we have for China, and will always remain so.

We admire China’s neighbourhood diplomacy guided by the principles of sincerity, amity, mutual benefit and inclusiveness. Nepal also attaches highest importance to its relations with neighbours.

Nepal takes pride in seeing China’s growing profile on the world stage, both politically and economically. China’s role is very important in shaping global agenda for a just and equitable world order.

We strongly believe that Nepal-China friendship will always be in the interest of our two countries and people. Territorial size, population and level of development have never been the elements of constrain in defining Nepal-China friendship.  Rather, sovereign equality and mutual respect have always remained at the centre, buttressing our cooperative partnership.

Dear Friends:

This is the state of overall Nepal-China relations today. We are proud of this. Nepal’s least developed status is a matter of serious concern for us. We have achieved fundamental transformation in political realm. An era of political stability has just begun in Nepal. Achieving the same level of transformation in economic realm would be our topmost agenda ahead. We have defined our motto, “Prosperous Nepal, Happy Nepali” and all our activities will be directed towards this end. In realizing this goal, we count on support and cooperation from our trusted friend China. China has been a reliable partner in Nepal’s development journey for a long period of time. We believe that Nepal-China partnership for economic development is very crucial for us to realize our national development aspirations.

From a forward looking perspective, we need to identify the areas where Nepal and China need to focus their collective efforts in the days ahead.

The world has undergone phenomenal changes in the past six decades of Nepal-China diplomatic relations. Innovations in every field, and unprecedented development in transportation, and information technology have made profound impacts in human life. China has emerged as an economic power house with global vision of inclusive and harmonious development. The world’s poverty incidence has gone down significantly for which China deserves special mention since it has succeeded in lifting 700 million people out of poverty. In the sectors of railways transportation, sharing economy, online payments, and e-commerce, as well as artificial intelligence, energy and agriculture productivity, China has made unparalleled progress. With a growing role in international relations for global peace and harmony, China has emerged as a major factor of global stability and growth. On the other hand, Nepal too is endowed with enormous potential with 30m population and abundant natural resource endowment, cultural diversity, natural beauty and relatively agile diligent youthful population.  Being a most diverse topography ranging from the top of the world to almost sea level flat land within an aerial distance of 150 km, Nepal is a resource-rich country.  There are many areas where Nepal and China can complement each other for mutual prosperity.

To my mind, there are five interlocking areas where we should work together for achieving rapid economic prosperity.

  1. Transport and Connectivity

In his visit to China in March 2016, Prime Minister K. P. Sharma Oli laid top priority on promoting connectivity between our two countries. This was because infrastructural deficiencies have prevented the full potentials of trade, commerce and people to people contacts between the second largest economy of the world – China – and Nepal from being fully realized.

It has, in the process, also prevented Nepal to benefit, to the maximum extent possible, from the rapid economic growth in the immediate neighbourhood of China. Transit facility from China will leverage Nepal from transit bottleneck in our international trade. Therefore, connecting through rail, road, power, telecommunication, airways and connecting Nepal to outside world through China are the topmost priority agendas for fully harnessing the unleashed potential within us.

I believe that such connectivity will have transformative impact on development in Nepal’ in pursuit of economic growth and social progress. Thus it will herald a new era in Nepal’s economic development. In this connection, the concept of trans-Himalayan multi-dimensional transport network with long term perspective was agreed during my meeting with H.E. Wang Yi, State Councilor and Minister of Foreign Affairs of China yesterday. We reached a common consensus that the development of this network will bring prosperity in the trans-Himalayan region and beyond.

  1. Agriculture, Industries and Technology Transfer

Agriculture is the mainstay of our economy, as 2/3 of our population is dependent on agriculture. However, it is a pity that the country has become a food importer from what it used to be a net food exporter.

Dissemination of Chinese agricultural technologies and mechanization of agriculture in order to improve productivity and efficiency in production,  is the area where Chinese enterprises can explore the opportunity. As I have mentioned earlier paragraph Nepal is the virgin land where we can produce a product of our choice in natural environment due to climatic variations and vegetations Nepal embodies.

  1. Unlocking Human Potentials

In terms of population, Nepal is among the middle-sized countries in the world. Its approximately 30 million people have 30 million dreams, of having a stable and prosperous society within their own lifetimes. Nepal has relatively young, economically active and agile population of which 60% are between the ages of 15 to 60 years and is one of the highest among the developing countries. China and Nepal can work together to utilize this resourceful population for creativity and resilience for stimulating economic activities in Nepal and China through production value chain.

Unlocking the full potentials of the human capital in Nepal will herald a new era in Nepal’s economic development.

  1. Natural Resources and Environment

Nepal’s rich renewable natural resources, particularly aquatic resources and, cultural diversity, adventure tourism and scenic beauty, are significant, and are likely to evolve into an important pillar of co-operation between the two countries. Nepal is listed on the best tourism destinations in the world by various rating agencies in the past several successive years including best value destination by lonely planet in 2017 and Kathmandu as one of the most interesting visiting place to visit in 2018 by rough guide.

Theoretically Nepal can produce 83000 MW of hydropower of which about 1% is exploited so far till now. Power development is another area that Nepal can offer with tremendous potential for cooperation.  China has technology, capital and experience in the area. Nepal and China can work together for mutually beneficial cooperation.

Nepal possesses vast resources of high value medicinal herbs, forests and timber, which can be harnessed together.

  1. Trade and Investment

There are several areas under Belt and Road Initiative in the fields of trade, commerce and investment which hold great promise for co-operation between Nepal and China.

Trade is the engine of growth, and investment is the propeller of that engine.

As we saw before, both Nepal and China, as important parts of the ancient Silk Road Belt, have benefited in the past from vibrant trade and commerce in the region.

Nepal has been adopting a policy of economic liberalization since the early 1990s where all economic policies are set to a liberal framework.

To take advantage of the investment opportunities in Nepal, both the governments should encourage Chinese investments in the most promising sectors such as infrastructure development, hydropower, agriculture and minerals, and tourism.

There are high hopes in Nepal on the Belt and Road Initiative (BRI) put forward by President H. E. Xi Jinping. The BRI aims to have peace and prosperity in the region and beyond, which holds far-reaching implications for the development of its neighbours.

Dear Friends:

In Nepal, our focus is on strengthening inclusive growth.

As Nepal draws out from a long transition and moves towards graduating from LDC status by 2022 and acquiring a middle income status by 2030, we need to move with great speed and vision.

For that, Nepal will have to focus on promising sector such as hydro-power, industries, tourism, and agriculture as well as gainful employment of the youth population.

A comprehensive economic partnership between Nepal and China will help achieve these goals quickly and sustainably.

This is the vision I have for Nepal-China relations in the era of 21st century. The vision is one of common development and common efforts. It is a vision of shared prosperity through mutual support and collaboration.

I believe all of you assembled here will agree with me that a stable and prosperous Nepal will be in the long-term interest not only of Nepal and China, but also the entire region.

Let me therefore conclude by emphasizing the crucial role of close economic partnership in further cementing Nepal-China ties.

I thank you all for your kind attention and participation.

Thank You.