'Nepal can be the first choice for Chinese visitors': Interview with Nepalese ambassador to China

Nepal’s Ambassador to the People’s Republic of China, H.E Leela Mani Paudyal (Liu Ning/People's Daily Online)

Nepal and China established diplomatic relations on 1 August 1955. Since then, the two countries have maintained a friendly relationship and share a common view in most global forums. With Nepal’s participation in the Belt and Road Initiative (BRI), bilateral relations have been further enhanced. Nepal’s Ambassador to the People’s Republic of China, H.E Leela Mani Paudyal, recently sat down to talk with People’s Daily Online. 

This year marks the 64th anniversary of Nepal-China diplomatic ties. How do you evaluate overall Nepal-China relations?

Paudyal: Nepal-China exchanges have a history of thousands of years that have further developed over the past 64 years of diplomatic relations. Our relationship is an example of how countries of different sizes in terms of population, geography, economy and different political systems can live together, trouble-free, as good neighbors and good friends. Our economic, cultural and people-to-people relations have all grown and the political relationship has gained momentum, and understanding at the highest level has been maintained. We can definitely say that our relationship is excellent with high prospects.

With Nepal’s participation in the Belt and Road Initiative (BRI), there have been increased bilateral engagements between the two countries. Can you elaborate on when Nepal is likely to push forward with some of the major projects under the BRI framework?

Paudyal: We have witnessed tremendous growth in politics, economy, culture and people to people relations under the framework of the BRI. After we signed the cooperation, there has been considerable growth of engagement in all sectors. Likewise, development cooperation is also growing. In my opinion, this is because of the greater political understanding since we entered into the BRI.

Earlier, we forwarded a list of projects to the Chinese side requesting to incorporate them into the BRI framework. We have been working in certain areas and many project documents are currently being drawn up. I am much more hopeful and confident that we will see tangible results in the near future.

In recent years, Chinese investment in Nepal has also increased and many other investors are willing to invest. What could be the major and lucrative areas for Chinese investors in Nepal?

Paudyal: The power sector and processing industries (like cement) and tourism-related industries already have sizable Chinese investment. But in terms of potential, the Investment Board of Nepal has introduced a project bank of more than 70 projects that were presented during the second investment summit in March 2019. These projects include transport infrastructure such as railway, roads, airports and hydropower. Tourism has a 10-year target that requires a huge amount of investment. Agriculture is another area where Chinese investors can explore the potential of the Nepali market for investment. The productivity of agricultural products in China is significantly higher than in Nepal. Despite being an agricultural-based country, production and productivity level is very low in Nepal. Introducing Chinese technology and farming methods would largely enhance our production and productivity. We imported agricultural products of more than a billion USD in the last fiscal year. Therefore, there is a market within Nepal. Nepali’s climate is suitable for high-value crops and medicinal herbs. China has developed traditional medicine, but Nepal too has a rich source of medicinal herbs and has practiced traditional medicine for thousands of years. Digital technology is another area that Chinese companies will have a comparative advantage in the Nepali market. Likewise, there is a huge gap between the demand and currently available services in Nepali finance and insurance sectors. One of the least explored areas is mining. Aside from limestone mining, almost all others are in an incipient phase. I believe Chinese companies can explore the possibility of such areas and gain from the untapped industrialization and simultaneously contribute to Nepal’s development.

More Chinese tourists are visiting Nepal than ever before, and China is now the second-largest source of tourism in Nepal. What are Nepal’s major tourist attractions that Chinese people should visit and how can Nepal benefit more from Chinese visitors?

Paudyal: Let me first talk about the benefit of tourism. The tourism industry can immediately generate jobs. Income is distributed more symmetrically to people from the bottom strata to high-end business. The benefits reach small vendors, tea shops on the trails and small handicraft producers, as they can sell their products to tourists.

Chinese are one of the largest spenders in the world according to WTO data. The number of tourists visiting Nepal from China is growing every year. After the 2015 earthquake in Nepal, the number of tourists plunged. However, from 2017 onwards, we started to see growth. In 2018, the number of Chinese tourists remained at around 154,000, but this year we are expecting more than 200,000.

As China is the largest source of tourism in the world, Nepal can offer a variety of tourism products to attract more Chinese tourists based on their interests. Nepal is a unique destination for adventure tourism, such as mountaineering, trekking, paragliding, rafting, canyoning, bungee jumping. So, Nepal can be the first choice for Chinese tourists looking for adventure.

Nepal can also be a relaxed vacation spot, as the country has splendid natural beauty and scenery, fresh air and blue sky. We can offer herbal therapy, natural spa, yoga, meditation and so many other specialized services available in Nepal.

Another area that Nepal can equally attract tourists from China is in meetings, incentives, conferences and exhibitions (MICE) tourism.

Nepal’s climate is excellent with a moderate temperature, neither very hot nor very cold. We have six seasons in a year. Geographically, we are also between South Asia and China. Nepali people are very hospitable as our culture is to respect guests as god. Visa procedures are easier for Chinese and South Asian tourists. Nepal could be a suitable place for Chinese and South Asians to shoot films and organize ceremonies, meetings and conferences. However, for this to be the case, we need to develop more infrastructures to better accommodate tourists. For adventure, we need to develop adventure sites and communicate with Chinese people. For MICE, we seriously lack infrastructure so we have requested experienced Chinese enterprises to invest.

Choosing Nepal for conferences and meetings would be advantageous for South Asian countries and China in terms of cost, climate and entry access.

Currently, the infrastructure along Nepal -China border points isn’t as good as it could be. In light of this issue, how is the tourism via land and trade between Nepal and China moving ahead?

Paudyal: The current infrastructure on the Nepal border is not very convenient for both trade and tourism. We indeed need to improve the infrastructure. So, this is the reason we are talking about railway that will immensely improve connectivity between Nepal and China. That, in turn, will also improve the transport infrastructure for carrying a large volume of goods and a large number of tourists. The cross border infrastructure, particularly the transport infrastructure, is important for promoting tourism from China to Nepal. Building railway may take some time; therefore we have to improve road infrastructure and air connectivity immediately. We have recently concluded an air service agreement by adding more direct flights between the two countries and also pushed our airlines to fly to China.

There is a huge gap in bilateral trade between the two countries, as Nepali exports to China are small, creating a huge trade deficit. How can we better balance bilateral trade?

Paudyal: Basically, the major weakness is we don’t have a strong production base so we can’t produce quality goods to cater to the enormous Chinese market. We have suggested that our ministries and enterprises identify key products that could do well in China and then negotiate with the Chinese government and enterprises that are interested in dealing with those products. We could also enter into an agreement with the Chinese side to ensure a complete production process from raw materials to after-sale services. We need to enhance our production capacity in terms of both quantity and quality and also ensure uninterrupted supply of goods required in the large Chinese market. Similarly, trade and transport related infrastructures are lacking.

Of course, we have to work together with the Chinese government for concessional and easier market access to our products. Recently, we have been talking with the Chinese authorities about exporting food and agricultural products in China. We don’t have laboratories and technical capabilities to test our products to satisfy China’s quality and quarantine conditionality. Quality and quarantines are often essential to safeguard the citizen’s rights, but at the same time, they become a non-tariff hurdle to countries like Nepal. Even if they have products of high-quality, they can’t prove it. During our President Bidya Devi Bhandari’s state visit to China, we signed a memorandum of understanding (MoU) to cooperate on quality matters. This agreement aims to create environment conducive and remove the technical barriers for exports. We should have laboratories, technical capabilities, machines and people to verify the technical and quality standards. I hope that we will be able to bring some agricultural products to the Chinese market within the year. Our focus is on ensuring market access and enhancing our capability to produce quality goods.

Recently, Nepal’s President Bidya Devi Bhandari paid a state visit to China, as one of a frequent number of high-level visits. Do you expect a high-level visit from China to Nepal in return?

Paudyal: We have been inviting Chinese leaders, as it has been quite some time since we last witnessed a high-level political visit from China to Nepal. This is very important to help gain momentum in our bilateral relations. Although we have an excellent political understanding and relationship as well as high-level visits from the Nepal side, we also expect such a visit from China. This matter was also discussed during our President’s state visit in April, and Chinese leaders have said that they are very interested in coming to the beautiful country of Nepal. We are confident that we will be able to welcome Chinese leaders in Nepal in the days to come. 

The author is a senior vice editor with the National News Agency, Nepal and is currently participating in the China Asia Pacific Press Center 2019 program in Beijing.