The Chinese Surprise!


No doubt, both Nepal and China tried to keep Chinese Premier Wen Jiabao's January 14 Kathmandu visit a top secret until the very last minute, annoying almost everybody in Nepal. However, the outcomes of the visit should make everybody happy. China pledged a grant of about Rs 12 billion to Nepal and the two countries also signed eight different agreements to take their relations to "newer heights."


By Akhilesh Tripathi

Clearing the clouds of suspense that covered the Nepali sky after the sudden postponement of his prescheduled Nepal visit last month, Chinese Prime Minister Wen Jiabao paid an official visit to Kathmandu on Saturday (Jan 14). This longawaited visit was pretty short, just about four hours. However, it has gone a long way to consolidate the bilateral ties, as rightly claimed by the high officials of both sides.


The joint statement the prime ministers of the two countries issued after the conclusion of the visit says the visit "served as a milestone in the annals of Nepal-China bilateral friendly relations and cooperation." During the visit, Premier Wen pledged a Chinese grant of RMB 750 million (about Rs 9.75 billion)-, and a special one-time grant of USD 25 million (little more than Rs 2 billion). Nepal will receive the RMB 750 million grant over the next three years - RMB 250 million each year, according to a source present in the bilateral meetings. The source also said that this is not a new grant. "China has increased the RMB 200 million annual grant it has been providing to Nepal for the past couple of years by RMB 50 million a year," the source added. This grant will be spent on mutually agreed projects under Economic and Technical Cooperation.


However, some confusion persists, even at the Ministry of Finance (MoF). When will Nepal get the first installment of the increased annual Chinese grant - from this year or the next year? "It's not very clear but we have assumed that Nepal will start receiving the increased Chinese grant the next year on as we signed an agreement for RMB 200 million for this year during Wen's visit," said a Finance Ministry official. Regarding the one-time special grant of USD 25 million he said, "We will have to correspond with the Chinese Embassy in Kathmandu to know when we will receive this special grant." The government plans to spend this special grant on the management and rehabilitation of the former Maoist combatants.


The Agreements


Eight different agreements were inked during the visit including constructing ports at six Nepal-China border points (Yari- Palum, Rasuwa-Jilong, Kodari- Khasa, Olangchung Gola-Riwa, Kimathanka-Dingri and Mustang- Legze). Another agreement was signed to form a Foreign Minister level Joint Committee to deal with the entire gamut of bilateral relations between the two countries. The Cultural Agreement between Nepal and China, too, was revised and signed. The revised agreement will be effective for the next five years.


Two Memorandums of Understanding (MoUs) - RMB 10 million assistance for strengthening Nepal Police and RMB 4 million aid for building the Armed Police Force College - were also signed during the visit. Another MoU was signed for the Standard Operationalisation Procedure of loan mechanism between Nepal's MoF and China's Exim Bank. The two countries also renewed the Border Pasture Agreement which allows the citizens of the two countries to graze their cattle 30 kilomtres across the border.


The two sides also agreed to give continuity to the ongoing discussions on having a Bilateral Investment Promotion and Protection Agreement (BIPPA) between China and Nepal.


"Though it was a very short visit, its outcomes are very significant for Nepal," Finance Secretary Krishna Hari Baskota told The Corporate.


Similarly, former Finance Minister Dr Prakash Chandra Lohani also hailed the visit as positive. "Premier Wen's visit shows that China is committed to Nepal's development and stability. At a time when China has been extending huge financial assistance to Africa and even Europe, nobody should doubt the Chinese intention when it extends it helping hand to its immediate neighbourhood," remarked Dr Lohani. According to economist Dr Chiranjeevi Nepal, China's pledge for financial assistance to Nepal during PM Wen's visit is only symbolic. "A lot more will come from China in the coming days," he said.


Peace Process, New Constitution and India


The government is very much encouraged by Wen's visit. Besides pledging an increased financial assistance to Nepal, Premier Wen also reiterated China's full support to the ongoing peace and constitution drafting processes in Nepal. "China is ready to support Nepal in every possible way to take the ongoing twin processes of peace and constitution drafting to a logical conclusion," a participant of the bilateral meetings quoted Premier Wen as telling PM Dr Baburam Bhattarai.


The Chinese premier also highlighted the need for Nepal's good and cordial relations with India. "China and India enjoy cordial relations at the moment. It would be fruitful for Nepal if it has a similar relation with India," Wen told Dr Bhattarai during their one-to-one meeting, according to one of the the PM's aides.