Mr Yin Zhonghua, Vice Chairman of CCPIT
Distinguished members of the business communities
Friends from Media,
Ladies and Gentlemen,
I am delighted to be here today and speak a few words to a distinguished gathering of business communities both from Nepal and China. Thank you for making excellent arrangements for this programme.
That a business delegation is accompanying me during this visit means the importance we attach to our economic relations with China. As connection matters in business, I believe the Nepalese businessmen staying in China could play a pivotal role in further deepening the economic and commercial engagements between our two countries.
Nepal and China are good friends and reliable partners sharing exceptionally warm and cordial relations through ages. No amount of words, however powerful, can truly describe the goodwill that we nurture towards each other and the esteem in which we hold each other. History, tradition, cultural values and geography link us inextricably, and our destiny is intertwined. This makes the case of collaboration and cooperation all the more important.
The world is watching China, and watching with interest and curiosity not because it is big in size, but because it is emerging at a pace not seen in history. The global economy itself is well integrated with Chinese economy. Then, how can we remain aloof or afford of being delinked from these opportunities? We would surely like to reap benefit by integrating our economy in the most beneficial way.
Present-day China is a wonder of economic development popularly known as ‘China Miracle’. It has lifted the masses of humanity out of abject poverty within the short span of time– second to none in the history of human development.
China was a source of over 114 billion US$ FDI outflow in 2014. Though the competition for FDI attraction is fierce among the developing countries, we are destined to be the natural partners in such venture being the immediate neighbors. I will reflect on details later why Nepal could be a natural choice for the Chinese investors.
Collectively, the Chinese tourists themselves are branded as global product worth of over US$ 100 billion every year. All countries try to tap the economic opportunities of such products. Nepal has a lot to attract tourists. This sector warrants the active collaborations of our entrepreneurs and investors. Jointly, we can develop it as an exclusive brand for the Chinese tourists.
Nepal recently joined Asian Infrastructure Investment Bank (AIIB) established under the Chinese initiatives; we became the part of process of the ‘Silk Road Economic Belt and 21st Century Maritime Silk Road’ – a noble initiative taken by the Chinese leadership to revive the traditional silk route in the changed context.The Bank as well the Belt and Road Initiative could serve as cannels of finance for infrastructure development, improve connectivity and facilitate trade and investment across Asia and beyond.
These initiatives promise to create a win-win cooperation in economic and trade sectors. Moreover, they are also critical today to strengthen infrastructure and connectivity in Asia and beyond.We are ready to make our commensurate efforts to unbundle the package of opportunity by initiating appropriate measures.
Ladies and Gentlemen,
With the completion of constitution writing process, Nepal has now embarked on the new path of economic development and prosperity. Unleash the economic potentials of the country is our top priority. I am here with you to discuss the ways and means of forging partnership. Nepalese people are eager and ready to contribute to their part for the sake of economic growth, development and prosperity to sustain and consolidate the hard fought political gains.
The Constitution of Nepal itself lays the policy foundation of encouraging foreign capital and technological investment in areas of import substitution and export promotion. It also has the policy to encourage and mobilize such investment in infrastructure development.
Nepal is pursuing a liberal economic policy. Investors are key actors, innovators, entrepreneurs and leaders whereas the government works only as an enabler or a facilitator by letting the private sector to take the helm of economic affairs of the country. We have defined private sector as partner for development and are promoting public private partnership.
Like anywhere in the world, we are also building greater convergence on the national development agendas among the major political forces of the country. Development today has now become the responsibility of the Government, private sector and cooperatives of the country. In Nepal, there is growing realization that the untapped potentials of the country can be harnessed through the effective mobilization of foreign investment.With a view to improving and facilitating trade and investment, we have reduced tariffs, simplified tax regimes and focused on the development and operation of trade related infrastructure.
Export and import rules and procedures have been made market based, market friendly, open and liberal. Trade facilitation measures have been improved. We have made several policy provisions for the foreign investors to provide maximum security to their investment. Minimal tax slabs, no income tax on dividends and export earnings as well as exemption of tax, duty and fee on the products, machinery, equipment, tools and raw materials used by an export industry are some of the policy provisions to ensure high return from FDI. We permit full repatriation of income earned from the investment.
We have made administrative procedures simple. Our government machinery is easily accessible. We have the single window facility for the foreign investors.
Investment Board has been established to facilitate large scale investments. Board negotiates projects and provides one window services. Simplified and liberal visa rules apply to investors and their family members. The same rule is applicable to reinvestment. Foreign companies registered in Nepal can purchase, own and sell land.
We provide sector-specific incentives of various kinds and scope. Law ensures that no private industry will be nationalized. Industrial relations have been improved. Labour law is being reformed.
Establishing the cross border economic zones and port facilities helps facilitate commercial activities. Investing within SEZ has multiple benefits that include flexible and investment friendly labour law. Both of our government are actively considering the development of cross border facilities and establishing SEZ near the border.
Consumer market is growing with the rise in middle class population. Our financial sector is becoming robust and growing very fast. Banks are lending at competitive interest rate. The Government has requested the Chinese side to consider establishing branches of Chinese banks in Nepal to facilitate Chinese investment.
Ladies and Gentlemen,
Workforce is our asset. The country is passing through the phase of demographic dividend. Every year over 500 thousand youths enter into job market.
Government is vigorously pursuing the Chinese language training opportunity for Nepalese people both in Nepal and China.This will eventually overcome the communication barriers for our engagements. Every year, there are hundreds of Nepalese students are graduating from Chinese Universities in technical fields. They could be the natural choice for the Chinese investors to expand their business and investment in Nepal.
Labor cost is low and competitive. Nepali people are known for hard work and honesty. If matched with the dedication of Chinese people, we can make bonanza.
Rate of return is high. Some joint ventures are making decent profit within the short span of time.
The 2ndphase of reforms are undergoing to further open up our economy. The Government is also committed to sort out the hindrances of economic development and make reform a continuous process.
Location of our country is also an advantage that ensures access to market and opportunities. Chinese investors can take benefits of location, cheap labor and production cost to produce some of their products in Nepal. Moreover, such investment naturally enjoys the benefits of preferential schemes offered by developed and developing countries to Nepal. Most of our products enjoy zero tariff in developed and some developing countries.
Chinese investors can have easy and quick access in vast South Asian market through Nepal. They can make their products cheaper filled with south Asian taste if produced in Nepal.
China is our 2ndlargest trading partner, 2nd largest source of FDI and important source of tourists. Cross border roads and other connectivity are being improved. Border facilities for trade and other human interactions are improving.
Our doors are open for investment in almost every sector. These include manufacturing, hydropower, tourism, services, IT, mining and agro based industries.
Hydropower could be number one choice. Nepal have massive hydro power generation capacity. Solar, wind and biomass have also good possibility.Chinese investment in mega projects can open up a new chapter in our economic relations. This can have the potential of being a game changer for our common good.
Tourism is an attractive sector for investors in Nepal. Nepal is gifted with beauty of nature and treasures of culture and civilization. Over the years, tourists from China are increasing. With the rising standard of living, more and more Chinese people are looking some natural places for recreation, adventure and spiritual growth, Nepal can be their first destination given the natural beauty, closeness and hospitable people and culture. It is an opportunity to invest in facilities to cater needs of growing number. Infrastructure is key.
We are developing regional international airports at two prime touristic hubs of Pokhara and Lumbini. Given the limited resources available in the country to overcome the towering task of development and nation building, we need massive investment in human resources, institutions and infrastructures to bring about economic transformation.
We want to overcome the vicious circle of poverty and underdevelopment. Government alone has limited capacity and resources. We invite the private sector, domestic and foreign, to invest resources, produce goods and services and create jobs.
My government is committed to take reform policies further. We expect private sector’s willingness to invest. We extend all needful support to facilitate your investment in Nepal.
Let me once again thank the organizers for organizing this program to promote investment, trade and other economic as well as commercial interactions between our two countries.
Thank you very much.
(Remarks by Prime Minister KP Oli to the Nepalese and Chinese Business Community in Beijing, China 22 March 2016)