Nepal’s trade with China declines

Kathmandu, July 9:

Government officials and businessmen today expressed concern over the decline in the total volume of trade between Nepal and China. Equally worrying is the fact of Nepal’s declining share in this trade equation.

According to available statistics, both Nepal’s export to China and imports have declined over the last two years.

In 2005-06, Nepal’s export to China dropped to 1.67 per cent from 3.45 per cent in the previous year, while imports fell to 7.99 per cent from 9.54 per cent of the total volume of foreign trade.

In contrast, imports in monetary terms have gone up during the period. Nepal had exported various goods worth over Rs 1.43 billion, while imports stood at Rs 2.017 billion in 2005-06. The trade balance still remains heavily loaded in favour of China, whereas Nepal suffers a huge deficit of over Rs 12 billion.

Increasing imports vis-à-vis exports to China in recent years is the main reason behind the gigantic trade deficit. Although, China holds a huge potential for exports of niche products, tariff and non-tariff barriers make Nepali exports less competitive in Chinese markets, complained Nepali traders.

Purushottam Ojha, acting secretary at the ministry of industry, commerce and supplies (MoICS), admitted that bilateral trade with China has dropped in recent years, while it has gone up with India. “Besides tariff and non-tariff barriers, trade with China will not go up unless we open more trading points with our northern neighbour,” he said. Currently Tatopani-Khasa is a lone functioning trade point with China. “Nepali products cannot be competitive, unless China provides preferential market access to them,” Ojha said, adding that despite China having agreed to grant preferential treatment to 1,500 goods, it has yet to be implemented. He was speaking at an interaction programme on ‘Promoting Exports in China: Challenges and Opportunities’ organised by Nepal-China Chamber of Commerce and Industry (NCCCI) on Monday.

Manik Lal Shrestha, executive director at Trade Promotion Centre, noted that political instability, poor infrastructure and quality of goods and tiring customs procedures are some of the reasons that led to the drop in bilateral trade between the two countries. He pointed out the need to develop niche products at competitive prices to exploit China’s vast market.

He also emphasised the need for increasing contacts and promoting Nepali goods in China, as well as setting up joint ventures with Chinese entrepreneurs in order to increase exports.

“New products, quality production, competitive pricing and well-organised promotional activities could increase Nepal’s exports to China,” Shrestha said.

Bai Dongmin, economic and commerce counsellor at the Chinese embassy in Kathmandu said attempts are being made to attract Chinese investment in Nepal as well as promote Nepali exports to China. Summing up the programme, NCCCI president Rajesh Kaji Shrestha stressed the need to apprise Nepali entrepreneurs of China’s trade policies.