According to Foreign
Investment Opportunities 2009 Report, produced by Government of Nepal,
Ministry of Industry and Ministry of Commerce and Supplies, the main objectives
of Nepal economic diplomacy are to enhance the flow of foreign direct
investments (FDIs) into the country, to promote Nepal’s export trade and
attract greater number of tourists to Nepal. Therefore, there is a need
to anatomize the Nepal-China economic relation and study to what extent Nepal
has achieved in line with these objectives.
Scenario of
Nepal-China Economic relation
The investment scenario
of Nepal-China relation is marked by Foreign Aid and Foreign Direct
investment (FDI). In the fiscal year 2011/12, Development
Cooperation Report (DCR) suggests that China
holds 12th position out of more than 19 foreign partners
contributing 2.8 percent of the total US$ 1.21 billion. In was 16th
in the chart with 1.7 percent share of US$ 1.21 billion in the fiscal year
2010/11.
Today, China is the second largest country after India in FDI.
The Industrial Statistics Report of the Fiscal Year 2010/11 says there were 69
Chinese industries with 1187.40
million rupees foreign investment creating 3066 jobs for Nepalese. In total, 209
foreign industries from 36 nations injected 10050.71 million rupees as FDI which collectively generated 10887
job opportunities. Chinese FDI, unlike other countries, are made in seven major
Sectors (Industries) in Nepal which are Agriculture (10), Construction (1),
Energy (1), Manufacturing (13), Mineral (2), Service (27) and Tourism (15).
Service sector is primary sector of investment for Chinese
investors. 27 industries under this sector have been established so far
creating 1143 job opportunities for Nepali labors. Manufacturing sector
receives maximum foreign investment, 351.10 as compared to other sectors. Also,
this sector is providing 666 job opportunities which is next big number after
service sector.
