Nepal seeks to strengthen economic ties with China

Twice a year, a normally deserted border checkpoint high on the Tibetan plateau throngs with activity as traders from Nepal flock to do business with their giant northern neighbor China.

A biannual trade fair in Tibet offers a rare opportunity for those living in the remote former Buddhist kingdom of Upper Mustang in Nepal to cross the usually closed border into China, which is cultivating closer ties with the Himalayan nation.

"This trade is very important for us because we live in such an isolated area," said trucker Pasang Gurung, who was driving to China for the fair. "Access to Chinese customers and products makes our lives much easier ... I wish the border were open all the time."

Authorities in Nepal are increasingly looking to strengthen economic ties with China and reduce its dependence on its other giant neighbor India.

An energy agreement between Kathmandu and Beijing in March ended India's monopoly over fuel supplies to Nepal, although it remains the biggest supplier by far.

That deal was prompted by a months-long blockade at the border with India to protest the terms of a new national constitution that led New Delhi to halt supplies, leading to crippling shortages.

Sujeev Shakya, chairman of the Nepal Economic Forum think tank, says that even before the blockade India had a reputation in Nepal for being slow to deliver. A number of Indian hydropower projects have stalled due to disagreements over the terms of the deal.

"The perception here is that the Chinese tend to deliver while India keeps talking," Shakya told AFP.

"Over the years, China has gained more credibility in Nepal because of the pace at which they have put up infrastructure projects."

In Upper Mustang's medieval walled capital of Lo Manthang, construction of a Chinese-funded 70-kilowatt solar power station last year has allowed residents to access electricity even during the months-long dry season, when hydropower supplies fall short.

Locals have welcomed the investment and are clamouring for deeper economic ties.

"If the border opens up, Lo Manthang can be a center for trade, religious activities, tourism," said shopkeeper Kunga Dorje Gurung.

Around 1,000 visitors a day use the Korala checkpoint during the fair, trading in everything from carpets and clothing to tea and biscuits.

The journey has been made easier by a new road to the border that opened this year. "The road has made transportation of goods much easier," said Nepali businessman Tshering Phuntsok Gurung, travelling to the border with friends.

"Earlier, everything had to be carried on horses and the costs involved in hiring and feeding animals meant that the prices of the goods would also go up."