हामी नेपाली - हाम्रो नेपाल - समृद्ध नेपाल

“China’s one belt one Road initiatives – the Case for Reviving Nepal’s Land-Link Role”

Dr. Sumitra Amatya -Former Member, National Planning Commission/ Nepal/ Views - December 23, 2016
Sumitra amatya

Nepal had Historically, linkages between Nepal/India, Nepal/Tibet, and India/Nepal/China were strong and Nepal was a link state. The role of Nepal declined significantly after late 18thcentury for a number of reasons, like the British shifted focused on opium trade with the eastern coast of China Discovery of the Nathu La pass in Sikkim etc.

Nepal is a strategically located in a land-locked country facing high trading costs and would benefit significantly from improved connectivity within and regional countries in South Asia for economic integration and revival in SA. This is not a new strategy, Nepal was a node in the Southwestern Silk Road, various ADB/ADBI/ERIA studies have found that cross-border corridors can drive economic growth and lead to win-win for all, especially landlocked countries. Currently, Laos, Mongolia, and China adopted a connectivity-driven strategy.

Lhasa in Tibet is emerging as a major transportation hub in Western China. China recently announced that it would build another railway to connect Lhasa with Chengdu/Sichuan: Geographically Chinese growth centers/manufacturing hubs are moving closer to Nepal which might be an asset.


The essence of OBOR is to promote regional and cross-continental connectivity which aims to integrate Asia, Africa and Europe through deepened diplomatic, commercial and financial cooperation, as well as improved infrastructural development for ‘global connectivity’. The OBOR refer to China’s proposed ‘Silk Road Economic Belt’ and ‘Maritime Silk Road’.Connectivity covers five major areas of interest: policy coordination, infrastructure construction (including railways and highways), unimpeded trade, financial integration and people-to-people ties. Among these, infrastructure construction is the dominant feature of the New Silk Road. The OBOR is predicted to encompass territory with a total population of more than 4 billion people, as well as nearly one-third of global GDP.

China stands at a new historical starting point today with the initiation of “One belt one Road initiatives”. This is a starting point for China to develop a comprehensively deepening reform, to continuously push forward economic and social development, to adjust to new normal by transforming development mode, to continuously be open to and have an in-depth interaction with the world.

Investment/Stakeholders in OBOR

One Belt One Road (OBOR), the project wields plenty of financial strength. It launched in February 2014 with $40 billion—mostly drawn from Beijing’s bountiful foreign exchange reserves.

OBOR has begun attracting other foreign investors. Singapore’s state-owned development board has agreed to partner with China Construction Bank, committing to $22 billion. International pension funds, insurance companies, sovereign wealth funds and private equity funds have also invested in OBOR projects in search of higher financial return.

China is investing some reserves in infrastructure and productions along the routes to gain better financial returns and build political friendship. Besides a couple of bilateral arrangements, China has also set up two major multilateral institutions, namely, the AIIB with US$100 billion initial equity, and the New Development Bank with US$50 billion equity proposed by BRICS countries, headquartered in Beijing and Shanghai respectively. China also established the Silk Road Fund, starting discussions about a financing mechanism for Shanghai Cooperation Organization. It seems China has confidence and is capable of keeping growth at a medium to high speed and can bring more opportunity to the world when China develops itself.

Revisiting Nepal’sLand –link role

Nepal being a neighbor of China, the OBOR initiativesaim to integrate Asia, Africa and Europe through deepened diplomatic, commercial and financial cooperation, as well as improved infrastructural development for ‘global connectivity’ is beneficial to Nepal.

Nepal can revitalize its land linked countryfor economic and social development, trade expansion and diversification by connecting national strategic road network with OBOR initiatives. Simultaneously, Nepal can benefit from the chines expertise in high-speed rail (HSR) construction. With more than twelve thousand miles of track laid, China has more HSR than the rest of the world combined. Now Beijing plans to build HSR networks connecting China with all of Southeast Asia.

India and OBOR

China’s belt and road, if successful, may be an example, to fill capital gaps in infrastructure, economic development and political institutions throughout Eurasia.The travel distance from China to India and the distance from China via Nepal to India is said to be three fold shorter. Nevertheless, China’s OBOR plan for a network of railways, highways, pipelines and ports across central Asia, and around Southeast Asia is a debate in New Delhi. A more developed region could create a bigger economic pie for everyone, including India.

In the 21st century, a new era marked by the theme of peace, development, cooperation and mutual benefit, it is all the more important for us to carry on the Silk Road Spirit in face of the weak recovery of the global economy, and complex international and regional situations.

Trans-Himalayan Economic Corridors/Nepal’s Economic growth

China is committed to improve international governance and increase the representation of developing countries in dealing with global affairs. The belt-road initiative may well be an exercise of bringing economic boost and job creation in Nepal.Therefore, Nepal should develop a clear strategy and action plan for a land- link Nepal by 2030. This land-link Nepal should not be limited only to India and China but all of South Asia, Central Asia, and East Asia. Nepal was an important land-link on the South-western Silk Road and it is a compelling reasons to revive the land-link role of Nepal.