China Remains The Largest Source Of FDI In Nepal: PM Oli

Both of our Governments are working on the establishment of Cross Border Economic Zones near Nepal-China border and further develop the existing border points between the two countries

June 21, 2018, 7:46 a.m.

It is a distinct pleasure for me to be amongst the prominent business leaders from China and Nepal. It is always a pleasure to come to a close friendly country on a visit. This is my second visit to China as the Prime Minister of Nepal. I visited China earlier in March 2016 during my first tenure.

At the outset, I would like to thank the Embassy of Nepal and China Council for the Promotion of International Trade (CCPIT) for organizing this important event.

We commend the CCPIT for its efforts in promoting Nepal-China economic relations.

One would feel really proud of talking about Nepal-China relations. Nepal and China are close neighbours linked by geography, culture and traditions. Our relations date back to antiquity. Formal relations were established in 1955.

Our relations are multidimensional that encompass political, economic, social and cultural aspects.

Our political relations, which are based on the Five Principles of Peaceful Co-existence, have always remained cordial and friendly. We share a trouble-free and cooperative relationship. Over the years, our relations have grown both qualitatively and quantitatively. High level of mutual trust and confidence underpin our ties.

Nepal is firmly committed to One China policy. We have a principled position that we do not allow our soil to be used against China. This is translated into day-to-day reality.

Our two countries have been in close and continuous engagement, be it in the fields of economy, trade and commerce, or in the field of culture or people-to-people relations.

Our two countries have a long history of trading relations that began with the engagement of merchants from either side of the Himalayas since early days, which set the foundation of our economic relations.

Our two countries are not only good friends but also reliable development partners.

Nepal is a land of vast opportunities for development. Yet, our rich resource base has largely remained dormant due to financial and technological gap. We want to change this scenario and create success stories. We believe that China, with its huge financial and technological capability, can help us to transform our development landscape.

Many people believe that the success story of the 21st century will be written as the success story of China. Our great friend, China, has astonished the world by attaining unprecedented progress in many spheres. We share the joy of tremendous achievements of China, our close neighbour and true friend. We also cherish China’s positive and influential role in global arena.

We note with pleasure that you have made China:

-The second largest economy in the world

- The largest industrial producer

- The largest holder of foreign currencies reserves

-The largest exporter of merchandise goods in the world

- The second largest FDI provider,

-A global leader in development finance, and

- A key driver of global growth and prosperity.

We are happy to see such unprecedented strides China has made in socio-economic and technological developments. Being a close and next-door neighbour of China, it is quite natural for Nepal to aspire for partnership with China for mutual benefits.

We can create a symbiotic relationship in business sector between our two countries, which would be a situation of win-win collaboration.

While we greatly admire success story of China, I do have something to share with you about momentous change that Nepal has undergone in its political history. Having witnessed a long period of conflict and instability, Nepal was successful in promulgating a highly progressive and democratic constitution in 2015.

The constitution has institutionalized political gains that we have achieved during the struggle of over 7 decades, and made people of Nepal truly sovereign.

After the successful holding of elections at three tiers of federal setup, governments at all levels have been formed with strong majority. At the centre, the Government enjoys more than two-third majority. Passing through a long political transition, we have now entered an era of political stability; an era of peace and prosperity.

The unification of two leftist parties, namely CPN (UML) and CPN (Maoist Centre), will provide much needed political stability in the country. Building on political stability, we have undertaken a decisive journey towards development and prosperity. Our motto is 'Prosperous Nepal, Happy Nepali'.

Political stability ensures policy stability, coherency and continuity. Stability in policy regime is a prerequisite for foreign investment. Now my government assures you that there will be policy stability and continuity. My government has a clear vision, straight- forward action plan and strategy, firm commitment, overwhelming mass support and ability to implement the development perspectives.

My government is committed to translating people’s aspiration for peace, stability and prosperity into reality. Economic prosperity should not and cannot be a long-deferred dream for Nepali people. We aspire to become a middle-income country by 2030 and graduate from LDC status at an early date.

To reach these destinations, we require massive investment in infrastructure development and induction of advanced and innovative technology.

We confidently count on Chinese investment in filling our financial as well as technological gap. And, I believe our friend China is willing to do this.

Investing in Nepal, now, is really a profitable business. The government is determined to maintain an investment friendly environment, not by word but by action.

With the end of political transition and strong government in place, situation of law and order in the country has been improved remarkably. So is the situation in terms of industrial relations.

Nepal is a virgin land for investment. A land of immense potentials for investment in the areas of hydropower, agriculture, tourism, services, manufacturing industries, among others.

It gives me a great pleasure to share that China remains the largest source of FDI in Nepal. It is our second largest trading partner. Economic engagement between our two countries has been growing rapidly.

Our focus on trans- Himalayan connectivity will create a conducive environment for bilateral trade and facilitate increased movement of goods and services.

Investors always look for market, which is not a problem in Nepal. As you all know, Nepal is located between two vibrant markets of the world, India and China with a population of over 2.5billion. Production is the only problem. Our productive capacity is limited.

We enjoy Duty Free Quota Free (DFQF) access into Chinese market to more than 8000 Nepali products. We have been requesting the Chinese government to grant enhanced level of market access to 512 tradable products. We also enjoy duty free access to European market and preferential market access to the USA for over 70 products as an LDC. I am here to listen to you and know your views.

We are committed to further improving business climate in the country. We are ready to do everything that enhances your confidence, that facilitate your engagements and that helps you to make quick decision for investment.

We have enacted the laws and policies on foreign investment, Public-Private Partnership, industrial enterprises, banking and intellectual property.

Almost every sector including manufacturing, hydropower, IT, services, tourism, mining, and agro-based industries are open for foreign investment. Our negative list is very small.

Nepal- an attractive land for diversified agriculture- with vast geographical and bio diversity-comprising the arable land just 80 meter above the sea level to the top of the world. This provides an opportunity for all kinds of agro products.

Nepal- a lucrative land for investment in hydro sector with more than 1,00,000 MW capacity, but remains untapped so far. Nepal- a reservoir of mines and minerals such as iron, cement and precious stones, yet to be explored.

Nepal- an attractive tourist destination with world renowned heritage sites, most favoured trekking routes, fascinating wild lives and amazing scenic beauty, with hospitable and welcoming people.

We are also committed to maintain liberal economic policy with private sector as a key partner. We have no intention to reverse the trends. We want to assure you that we cannot go against the global trends.

Nepal Investment Board currently headed by the Prime Minister will be further strengthened by amending Investment Board Act.

It will be developed as an institution to permit investment through one-door system promoting public private partnership. There is a favourable fiscal environment in Nepal.

We have low tax slabs, no income tax on earnings of industry exporting its products established in Special Economic Zones for certain period of time, exemption of tax and tax holidays for certain industries, exemption of duty and fees on the key inputs used by an export Industry.

Our law permits full repatriation of income earned from investment and reinvestment.

Foreign companies registered in Nepal can purchase, own and sell land.

No discrimination is made between national and foreign investors. There is no policy of nationalization of private industry.

The other factor that makes you competitive in Nepal is availability of cheaper labour force and improved labour law and industrial relations.

Infrastructure is key to economic development. Both of our Governments are working on the establishment of Cross Border Economic Zones near Nepal-China border and further develop the existing border points between the two countries.

Our two countries have been formally linked by optical fibre since the beginning of this year.

We are planning for cross-border connectivity of railways, transmission lines and establishment of new international airports. Partnership with Chinese investors to complete these priority projects will be very important.

Our both countries have signed some MoUs and agreements like Framework Agreement on Promotion of Investment and Economic Cooperation, MoU on Energy Cooperation and MoU on Investment and Cooperation on Production Capacity which will facilitate and reinforce the collaboration between the investors of the two countries.

Nepal has joined the BRI, a visionary initiative launched by President Xi Jinping. We believe that this initiative offers immense opportunities for collaboration and partnership between our two countries. Growing attraction of the international community towards BRI has made it one of the biggest platform for international cooperation.

China is an important source of international tourism market. The flow of Chinese tourist to Nepal has been quite significant in recent time. I am happy to see the increasing trend of Chinese tourists in Nepal.

As we are gifted by beautiful bounty of nature as well as culture, the Himalayas as well as heritages, wildlife as well as spiritual sites, tourism sector bears a potential to be a key mover of our economy.

The Government is very much committed to the safety and security of the tourists. Special provisions are being made for the security and emergency rescue of the mountaineers and trekkers.

The government has announced to observe 2020 as “Visit Nepal Year” with the goal of welcoming two million tourists each year.

I would like to encourage the Chinese tourists as well as travel/tour agencies to make the best use of Nepal's visa fee waiver facility.

I would also like to encourage the Chinese investors to invest in tourism infrastructure of Nepal.

We are happy to note that private sectors of our two countries have developed good relations and collaborated on a number of investment proposals. Your gathering here today will give you yet another opportunity to forge partnership for meaningful business initiatives in Nepal.

My Government is committed to extending all support to facilitate your business venture in Nepal. Let’s match excellent political relationship with an equally sound economic and business partnership. Let’s work towards creating a win-win scenario for both of our countries and people.

And I assure you, Chinese friends, that your venture in Nepal will be profitable and secure. You will gain, not loose. With these words, let me once again thank the organizers for this program.

Excerpt of the statement delivered by K. P. Sharma Oli, Prime Minister of Nepal, to the Nepal-China Business Forum (Beijing, June 20, 2018).

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