Press Release Dissemination of the report on
NEPAL-CHINA 101 Business | Energy | Tourism
August 17, 2026
KATHMANDU, NEPAL, August 17 – On August 17, 2026, Nepal Economic Forum (NEF) launched the report of its two-year long study, "Nepal-China 101," bringing together policymakers, diplomats, private sector representatives, and researchers to discuss its findings and their implications for Nepal's economic engagement with China. The study examines the state of Nepal-China economic relations across trade, renewable energy, and tourism. The event opened with remarks from NEF Chair Sujeev Shakya, who traced the historical depth of the Nepal-China relationship, from the era of Princess Bhrikuti and the Newa architect Araniko to Nepal's position today between two of the world's largest economies. He framed the event as an opportunity to interact and look ahead at how that historical relationship could be converted into mutually beneficial economic and people-to-people ties, and noted that the study's central finding was that the constraints on the relationship are not Chinese, Indian, or geopolitical, but rooted in Nepal's own failures of implementation. NEF Project Coordinator Arya Awale then took the stage to present the study's findings, drawing on two years of research across trade, energy, and tourism. She noted that despite decades of formal cooperation, including zero-tariff access for over 8,000 Nepali products and a series of framework agreements dating back to the 1950s, Nepal's import-to-export ratio with China stood at 1:130 in the first four months of FY 2025/26, driven in large part by EVs, which now account for 73 to 76% of new four-wheel passenger vehicle imports. She argued that this gap is driven primarily by institutional deficits on Nepal's own side, including the absence of accredited testing labs at Nepal's northern border, which erodes the value of zero-tariff access, USD 2 billion in annual bilateral trade with zero dollars of it in energy, and Nepal's nearabsence from the Chinese platforms where travelers plan their trips, rather than by Chinese behavior, Indian constraint, or geopolitical exposure alone. She outlined four cross-cutting priorities: treating northern trade infrastructure as strategic, concluding the legal frameworks that enable cooperation, managing the India-China dynamic through a more deliberate parallel-track approach, and capturing more economic value at home, and closed by noting that what Nepal gains from the relationship over the next decade depends less on what China does than on what Nepal builds. Dr. Brian Wong, Assistant Professor at the University of Hong Kong, then delivered the keynote address on "Towards a More Pragmatic and Balanced Nepal-China Relationship." He offered a framework for understanding China through three lenses: pluralism, poverty alleviation, and pragmatism. Poverty eradication, he said, has been central to the legitimacy of the Chinese state since the reforms of 1978, and the country's scale has produced a system of "directed improvisation," where broad
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directives from the center are adapted and implemented locally rather than dictated from the top down. He argued that deepening ties with China should not come at the expense of Nepal's relationship with India. Instead, he called for Nepal to move from equidistance to equal proximity, and proposed a five-part approach for Nepal's own foreign policy, which he termed HATCH: history, autonomy, transparency, creativity, and humanity. The past, he observed, does not stay in the past, but continues to shape the ideas and concepts Nepal and China draw on in the present, and he suggested Nepal could do more to market its civilizational roots to attract highervalue tourism. He also called for a clearly articulated Nepali foreign policy doctrine that treats diversification as strength rather than dependence, and pointed to recent shifts in Sino-Indian relations as an opening for Nepal to seek clearer terms with both neighbors. Urging Nepal to think in clusters rather than silos, he pointed to export clusters around products like pashmina, cardamom, and orthodox tea, backed by stronger certification. He closed by arguing that trust between Nepal and China, as with any relationship, is ultimately built through direct human exchange rather than passive consumption of information. Our commentator for the event, Aneka Rebecca Rajbhandari, Co-Founder of The Araniko Project, then delivered a reflection on why discussions of Nepal-China relations tend to move straight to geopolitics and connectivity without first establishing a foundational understanding of the relationship, and on what it will take for Nepal to convert geographic proximity into institutional capability. Citing the report's finding that Nepal's orthodox tea exports to China grew by more than 88% in the first eight months of 2024, even as Nepali traders remained largely absent from the platforms where that trade is actually done, she described Nepal's position as one of geographic proximity coupled with institutional distance. She concluded that geography gives Nepal proximity, diplomacy builds relations, and capability determines what the country can actually do with them. NEF Chair Sujeev Shakya delivered closing remarks, thanking the speakers and participants for their contributions and reaffirming NEF's commitment to advancing evidence-based dialogue on Nepal's economic development priorities.
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