KATHMANDU: A railroad linking Nepal with Lhasa could give new high to Nepal-China economic relations, Prime Minister Madhav Kumar Nepal, opined here today.

Such a network of railways could also help infrastructure development of the Nepal-China hilly borders , he said, inaugurating the fourth China Festival 2009, organised at the Nepal Academy to mark the 60th anniversary of the founding of the people's republic China.

“The railway could be a business route for the entire mid-and South-Asia," He said, adding, “Nepal is optimistic about China's help in exporting tax-free Nepal's goods to Chinese market”.

The PM assured the Chinese that Nepal would not allow any anti-China activities in Nepali soil.

"We are committed to one-China policy and we will be firm in our stance in the days to come," PM Nepal said, highlighting the Panchashil as the historic base of Nepal-China relations.

He said that the Nepal-China relation is 1,600 years old and the two countries have cemented their relations with years of economic and political ties.

The PM said it would further enhance the relations should both countries work towards establishing people-to-people-level relations. He also underlined the need to explore immense tourism potentialities of both the countries.

"We are thinking about giving a new dimension to traditional economic relations between the two countries," the PM said.