China blocks traders from Nepal under cover of Covid
At the end of January 2022, Nepalese traders staged a protest in Rasuwagadhi. Reports indicate that businessmen were carrying placards with messages such as “Ensure the smooth movement of containers, ensure the safety of Nepalese living at the border, respect international law and end the undeclared blockade”, among others . Residents of Tatopani in Sindhupalchowk district had also earlier staged a protest against the Chinese blockade.
China is tightening its grip on Rasuwagadhi and Tatopani, the two most crucial trading points and China is allowing a maximum of two to three truckloads of goods per day to places where there was previously heavy traffic. Currently, there are nine trade routes between Nepal and China including Hilsa, Nagcha, Ko Rala, Gorkha Larka, Rasuwagadhi, Tatopani, Lamabagar, Kimathanka and Olangchung Gola. Of these, Rasuwagadhi and Tatopani are the most crucial and have been closed since January 2020.
Nepalese traders say that since January 2020, around 300 trucks have been stuck at Kerung and Tatopani border posts. Nepali traders also accuse the Chinese government of not issuing them visas and have therefore stopped ordering new goods from China.
A statement issued by the Chinese Embassy in Kathmandu (January 13, 2022) said that they have opened cargo transportation to Nepal, “The Chinese side has opened one-way cargo transportation to Nepal by overcoming great difficulties and has continuously improved the cargo handling capacity of the ports. , which has played an important role in ensuring the supply of anti-pandemic and livelihood materials in Nepal. We look forward to working with the Nepalese side to overcome the current difficulties and make efforts to restore the economy and normal personnel exchanges.
The origin of this undeclared blockade dates back to early last year, when traders reported that their container trucks had not been allowed to cross the border for more than sixteen months. At that time, Naresh Katuwal, president of the National Traders Federation of Nepal, said shipments were blocked at the northern border under the pretext of the Covid-19 pandemic.
“We considered this gesture by China as an unofficial blockade,” Katuwal told the Kathmandu Post (February 2021). He added that there was no point in trading with China if this situation continued. Nearly 2,000 containers loaded with clothes, shoes, cosmetics, electronics and industrial raw materials were stopped at the border during the festive season from October to November 2020. China only allowed a few trucks to enter Nepal. Subsequently, most importers rerouted their goods through the port of Kolkata in India.
The net result of this has been a drastic reduction in trade between Nepal and China. According to the Nepal Trade and Export Promotion Center, Chinese exports to Nepal decreased by 3% from 17.6% to 14.6% in just two years.
China mainly exports electronics and garments to Nepal, while Nepal mainly exports carpets, handicrafts and traditional items to China. Nepal’s exports to China were reduced to 0.4% from 1.8%. Nepal bought Rs 96.33 billion worth of Chinese goods in the first six months of 2021, compared to Rs 118.25 billion in the same period last fiscal. Exports to China also fell by 50% in the first six months of the current fiscal year. Shipments were valued at 500 million rupees, compared to 1.02 billion rupees in the same period last financial year.
The current stalemate is not due to the two parties’ lack of agreement on trade and transit. Nepal and China had signed a transit agreement in March 2016, which was operationalized during the Nepalese President’s state visit to China in April 2019. Article 15 of the agreement talks about the implementation of the pact one month after each country informed the other of its decision. Coming into force.
According to this protocol, China had allowed Nepal to use four open seaports and three open dry ports. The trade agreement between Nepal and China also allows people living within 30 km on either side of the border to travel freely by simply providing proof of residence to engage in the barter trade. Indeed, the majority of Nepalese exports to China are consumed in Tibet.
Current restrictions on the movement of traders and people across borders with China have created major hurdles for traders in Nepal. In some cases, cases of cheating have also been noticed. Such an example was revealed recently, when a Nepalese company Sun Moon Trading Co., placed an online order (September 2021) with a Chinese company, Changsha Washum Bamboo Products trading company based in Hunan China, for the supply of 5,000 boxes of latex gloves. . The Nepalese company has also deposited US$25,000 for delivery of the items within one month but has yet to receive the products. Apparently the Chinese company has closed shop and is unable to send the supplies. Nepalese society is now in deep trouble and has lost precious money.
The government of Nepal approached China through the Ministry of Foreign Affairs to find a diplomatic solution to the issue, but no result was achieved. Meanwhile, Chinese carriers have increased shipping costs. The cost of transporting goods for the 26 km distance between the Chinese border post and the Nepalese border post has increased from 15,000-16,000 RMB to 60,000-65,000 RMB per container.
China’s continued indifferent attitude towards Nepal could be linked both to Prime Minister Deuba’s alleged pro-India streak and China’s inability to hold the Communist Party of Nepal together. As a result, the people of Nepal are suffering the consequences of China’s irrational thought process. The people of Nepal have every right to protest against this unjust measure taken by their giant neighbor to the north.