Tibet said it would ‘open up’ to private investment in the trade and business sector from 2020 with Beijing seeking to penetrate the massive South Asian market via Nepal. To this end, the northern neighbour plans to extend the Tibet railway to the borders of the heavily populated Indian states of Bihar and Uttar Pradesh and to the world’s eighth most populous country Bangladesh through Nepal.

In a bid to increase tourism and trade, the Tibet Autonomous Region of China will establish an industrial development fund to channel more private investment into the sector, and encourage private capital through tax holidays, said Qi Zhala, chairman of the Tibet Autonomous Region, while addressing the fourth China Tibet Tourism and Cultural Expo in Lhasa on September 7.

The railway reached Tibet’s capital Lhasa in 2006, passing spectacular icy peaks on the Tibetan plateau and climbing to altitudes of up to 4,000 metres above sea level. Construction work on the Lhasa-Shigatse extension began in September 2010, and the line opened in August 2014. The second largest Tibetan city of Shigatse is about 540 km from Kerung, the nearest Chinese town from Nepal.

Connectivity in Nepal and Tibet will be enhanced under the Belt and Road Initiative adopted by the Chinese government, said Ju Jianhua, vice-chairman of the Standing Committee of the People’s Congress of the Tibet Autonomous Region. The plan was mooted by China long ago, but issues of funding and building the project in such a rugged terrain slowed efforts, particularly after the earthquake of 2015.

“Nepal and China signed an agreement on railway connectivity last June during Nepali Prime Minister KP Sharma Oli’s visit to Beijing, and the project will be implemented soon,” Ju told the Nepali media during the first Belt and Road Forum on Trans-Himalaya Cooperation in the southeastern Tibetan city of Linzhi.  

“The railway project connecting Shigatse, Kerung and Kathmandu could take five-six years to complete,” he said. “Both Nepal and China should work hard to accomplish the project.”

Li Qing, researcher at the Institute of Quantitative and Technical Economics, Chinese Academy of Social Science, said there would be no gateway to South Asia without connectivity with Nepal. “We need to have amicable policy, amity and mutual trust to increase cross-border connectivity,” he said, adding that all the connectivity options—highways, railways and airways—should be opened.

“There is a need to facilitate investment in cross-border infrastructure. There is a need to create an easy process for exchanging currency of the two countries,” said Li. He said that proper resource allocation was vital to leverage China-India trade through Nepal.

Parliamentary Speaker Krishna Bahadur Mahara said huge resources would be needed for the construction of railways and highways to establish Nepal-India-China trade connectivity, and mutual cooperation was essential to make the dream come true.

“We know it’s difficult to build a railway line over such rough terrain, but China has developed advanced technology that can overcome these problems,” he said. Mahara told the Nepali media delegation that China had been preparing a technical report on the railway which was almost ready.

When asked why India has not joined the Belt and Road Initiative, Mahara said, “It’s true that China is focusing on trade in South Asia by opening the door through Nepal. India should also think about grabbing the opportunity of this trade route.” He added that India should not suspect Nepal because trade would benefit all.