China reduces bounty to new Nepal government

Asia-Pacific News

China reduces bounty to new Nepal government

Kathmandu, June 13 (IANS) The Chinese government, described as Nepal's 'all-weather friend' by the earlier regime of King Gyanendra, curtailed its bounty to the new government of Prime Minister Girija Prasad Koirala, offering spare duty-free concessions against Nepal's expectation of zero tariff on over 1,500 products.

Beijing's honeymoon with its southern neighbour has struck a discordant note in the post-King Gyanendra period with the Chinese authorities practically declining to okay the concessions Nepal had asked for.

To reduce the spiralling trade deficit with China, Nepal had asked for zero tariff on 1,502 export items. In March 2006, when King Gyanendra was ruling Nepal after seizing absolute power through a coup, China's state councillor Tang Jiaxuan visited Kathmandu. At that time, the royal regime asked him for duty-free access to Nepali goods on a bilateral basis.

However, the Chinese government has recently informed Nepal that it would provide duty-free access not bilaterally but through a grouping of seven least developed countries (LDCs), the Kathmandu Post daily reported Tuesday.

The other countries are the Maldives, Afghanistan, Samoa, East Timor, Yemen and Vanuatu.

According to the Post, the export items from these seven LDCs comprise mainly mechanical items, fishery products and technological accessories and are not of much use to Nepal.

As for exemption on a bilateral basis, Beijing is now proposing duty-free access for only 278 products out of 1,502, the Post said.

In 2004-05, Nepal suffered a trade deficit of NRS 12.12 billion with China. One of the reasons was the high cost of transport, which makes exports costlier by an additional 25 percent. Also, while Nepal had proposed a value addition of 30 percent for export items, Beijing wants it to be 40 percent, the daily said.

The Chinese gesture comes at a time London-based rights watchdog Amnesty International called Beijing one of the world's 'biggest, most secretive and irresponsible arms exporters'.

During Gyanendra's 15-month absolute rule, when Nepal's major arms suppliers - India, the US and Britain - suspended lethal military assistance to show concern, China sold 25,000 rifles and 18,000 grenades to the royal regime.

The Chinese prices were marked up to pay hefty commissions to brokers close to the palace.

The Koirala government that came to power following the king's ouster in April has pledged to stop all arms deals causing a loss to the state treasury. Chinese agreements would form the bulk of such deals.

The government also decided to issue travel documents to Tibetan refugees residing in Nepal. The royal regime had stopped it last year. The new government is under pressure to issue exit permits to Tibetans fleeing from China-controlled Tibet Autonomous Region as well as allow exiled Tibetan leader Dalai Lama's office to re-open as a registered NGO.

The office was closed under Chinese pressure in 2003.

In return for the favour, China supported Gyanendra's coup, calling it an internal matter of Nepal, and kept up high-level visits and assistance to the royal regime when the international community suspended diplomatic visits and slashed aid.

Latest News

Star stuff

China reduces bounty to new Nepal government