Editor's Note:

SATV 12 May, Kathmandu: As we commemorate the 70th anniversary of China-Nepal diplomatic relations, SATV presents this meticulously crafted series of reports. While seven decades may seem a fleeting moment in history, for China and Nepal, this period has been a transformative journey of forging profound bonds and achieving remarkable milestones together.

Since establishing diplomatic ties, the two nations have deepened cooperation across political, economic, and cultural spheres. From jointly addressing natural disasters to collaboratively building the Trans-Himalayan Multi-Dimensional Connectivity Network, their partnership has flourished through shared endeavors. Cultural exchanges, particularly in Buddhist traditions and mutual festival celebrations, have further strengthened the spiritual connection between their peoples.

In this report, SATV offers a comprehensive account of the touching narratives and significant achievements of the past 70 years, showcasing this Himalayan-spanning friendship while exploring future cooperation prospects. Together, let us witness how China-Nepal relations continue to shine in the new era.

The Himalayas: From Barrier to Bridge

The majestic Himalayas, often perceived as a natural divide, have paradoxically become a bridge connecting China and Nepal through centuries of economic and trade collaboration. Since formal diplomatic relations were established in 1955, the past 70 years have unfolded like an intricately painted scroll, with economic and trade cooperation contributing its most vibrant strokes. What began as simple border trade has evolved into a multifaceted, deep-level partnership, now serving as twin engines propelling both nations toward shared prosperity and improved livelihoods.

I. The Foundation: Early Economic and Trade Cooperation (1950s–Late 20th Century)

In the early years, China-Nepal economic relations were characterized by rudimentary border trade. Nepal, a landlocked mountainous nation, faced geographical constraints that limited its external exchanges. China’s Tibet region, sharing a direct border, became the focal point for bilateral trade. Nepalese merchants traversed rugged terrain, bartering handmade woolen goods and exquisite thangka paintings for daily necessities and textiles with Tibetan traders. Though modest in scale, this grassroots trade laid the groundwork for future collaboration.

By the 1960s, trade relations became more structured. The two governments signed a series of agreements, providing policy support and expanding trade volume. Concurrently, China began assisting Nepal in infrastructure development. The 1967 completion of the China-Nepal Friendship Highway marked a landmark achievement. Spanning 943 kilometers (114 kilometers within Nepal), this engineering marvel traversed the Himalayas, linking Kathmandu to Tibet’s Zhangmu Port. Its construction revolutionized Nepal’s transportation network, slashed trade costs, and facilitated smoother movement of goods. Nepalese agricultural products and handicrafts gained easier access to Chinese markets, while Chinese manufactured goods flowed into Nepal, significantly boosting bilateral trade.

This era planted the seeds of trust and experience, setting the stage for deeper cooperation.

II. New Century, New Horizons: Multi-Sector Expansion

(1) Infrastructure: Building the Future

The 21st century ushered in a new wave of infrastructure collaboration. The Pokhara International Airport project emerged as a flagship initiative. Pokhara, a premier tourist destination, had long been hampered by inadequate transport links. In 2016, Chinese enterprises commenced construction with financing from China’s Export-Import Bank (USD 154 million). Hailed as a "National Pride Project," the airport opened on January 1, 2023, with Nepalese Prime Minister Pushpa Kamal Dahal ("Prachanda") praising it as a symbol of China-Nepal Belt and Road cooperation. By March 2025, direct flights from Chengdu, Lhasa, and other Chinese cities began operations, revitalizing tourism and eliminating the need for Kathmandu stopovers.

Cross-border railways, highways, and bridges are also underway, poised to further shrink the distance between the two nations.

(2) Energy: Powering Progress

Nepal boasts 83,000 MW of hydropower potential, with 42,000 MW technically feasible for development. Yet, due to technological and financial constraints, utilization remains low. Chinese enterprises have played a pivotal role in addressing this gap.

PowerChina, a key player since 1969, has spearheaded multiple projects, including:

- The 50 MW Upper Marsyangdi A Hydropower Plant (Nepal’s first Chinese-invested hydropower project, operational since 2017)

- The 456 MW Upper Tamakoshi Hydropower Station (Nepal’s largest)

With 18 completed projects, 14 under construction, and 9 in design consultation, PowerChina has become indispensable to Nepal’s energy sector. These initiatives not only alleviate domestic power shortages but also enable electricity exports to India, generating vital foreign exchange.

(3) Manufacturing: Diversifying the Economy

Nepal’s manufacturing sector, once limited to agriculture and handicrafts, is now diversifying with Chinese support:

- Hongshi-Shivam Cement: A USD 350 million joint venture (Nepal’s largest foreign-invested industrial project) produces 2 million tons of clinker annually (25% of Nepal’s market), employing 400+ locals and supporting 3,000 indirect jobs.

- Huaxin Cement: Launched a 3,000-ton/day clinker production line in 2022, combining infrastructure support with eco-friendly practices.

- New Hope Group: Established a 120,000-ton/year feed production plant in 2014, benefiting 50,000 farmers.

- Kunhua Agriculture: Introduced advanced organic fertilizer technology, targeting 10,000 tons/year output across 10–12 factories.

Chinese investments in textiles, electronics, and plastics have also spurred job creation and ancillary industries.

III. Transformative Impacts: Economy and Livelihoods

(1) Economic Growth & Industrial Upgrading

- Infrastructure projects like Pokhara Airport have stimulated GDP growth through construction and tourism.

- Hydropower development has stabilized energy supply, enabling industrialization.

- Manufacturing’s growing GDP contribution enhances economic resilience.

(2) Employment & Income Growth

- Thousands of jobs created in construction (e.g., China-Nepal Highway), manufacturing, and services.

- Poverty rates fell from 25.2% (2010) to 15.8% (2024), with China-Nepal projects generating 200,000+ jobs.

(3) Improved Living Standards

- Highways and airports improve healthcare/education access.

- Stable electricity enables agro-processing, raising rural incomes.

IV. Emerging Trends: New Energy Vehicles (NEVs)

Chinese NEV brands like BYD and Neta Auto are gaining attraction in Nepal, offering eco-friendly vehicles with smart features. Their growth aligns with Nepal’s green energy goals, reducing fossil fuel dependence and emissions.

V. Future Opportunities

(1) Belt and Road Initiative (BRI) Synergies

- Cross-border railways/roads will enhance connectivity.

- AIIB and other institutions provide funding for energy/infrastructure.

(2) Alignment with Nepal’s Vision 2030

- Projects like Pokhara Airport dovetail with Nepal’s tourism-led growth strategy.

(3) Emerging Industries

- E-commerce, digital services, and smart agriculture offer new collaboration avenues.

(4) Regional Cooperation

- Platforms like SAARC can amplify China-Nepal ties across South Asia.

Conclusion

Over the past 70 years, China-Nepal economic cooperation has transformed infrastructure, energy, and manufacturing, uplifting Nepal’s economy and livelihoods. While challenges like geography and policy differences persist, opportunities under BRI, Nepal’s development plans, and emerging industries herald a brighter future.

By strengthening policy coordination, deepening infrastructure links, and adapting to local markets, both nations can ensure their partnership thrives—delivering mutual benefits and regional stability.

(Special thanks to PowerChina, Himalaya Airlines, Huaxin Cement, Hongshi Cement, New Hope Group, and Kunhua Agriculture for their support. – SATV Editorial Department)