Illustration: Xia Qing/GT

During Nepalese Prime Minister Khadga Prasad Sharma Oli's visit to China from Monday to Thursday, he reaffirmed Nepal's commitment to actively engaging in the Belt and Road Initiative (BRI). In May 2017, China and Nepal signed a Memorandum of Understanding (MoU) on bilateral cooperation under the framework of the BRI. Seven years on, cooperation through the BRI has deepened, further boosting bilateral economic growth. This strengthened cooperation is set to inject fresh momentum into the development of a multi-dimensional connectivity network across the Himalayas, with the potential to profoundly reshape trade networks throughout Asia.

Nepal's economy is currently on an upward trajectory. In September, Arnaud Cauchois, Asian Development Bank Country Director for Nepal, highlighted that GDP growth is set to accelerate, driven by "a gradual recovery of domestic demand, acceleration of infrastructure spending, and further revitalization of tourism and related services." According to the Asian Development Outlook (ADO), Nepal's economy is projected to grow by 4.9 percent in the fiscal year of 2025, marking a significant and promising development.

Further strengthening cooperation under the BRI will open new avenues for Nepal's economic growth. First, in terms of investment, Nepal has maintained a relatively open foreign investment policy since the early 1990s, welcoming foreign capital in nearly all sectors, with only a few exceptions. As the country undergoes economic transformation, substantial investments are crucial - particularly in infrastructure, such as roads, bridges, railways, subways, airports and public transportation systems. Additionally, Nepal's abundant water resources, with numerous rivers flowing from the Himalayas, offer significant opportunities for hydropower development. Strengthening cooperation under the BRI will help unlock these opportunities and further accelerate Nepal's economic growth.

In 2023, Chinese companies' direct investments in countries along the BRI totaled $40.71 billion, a 31.5 percent increase from the previous year. These investments were primarily focused on sectors such as manufacturing, construction, wholesale and retail, and energy. In recent years, Chinese businesses have increasingly sought foreign investment opportunities, with their priorities aligning more closely with Nepal's infrastructure and development needs. As a result, deepening cooperation within the BRI framework will bring mutual economic benefits and create a more prosperous future for both Nepal and its partners.

Second, in terms of infrastructure connectivity, Nepal, as a participant in the BRI, can deepen its cooperation within this framework to improve and expand its infrastructure network. This will facilitate connectivity across key sectors such as ports, roads, railways, aviation and power grids, while contributing to the creation of an interconnected cross-Himalayan network with China. These improvements will help Nepal integrate more fully into regional industrial and trade networks, and enhance economic self-sufficiency.

Third, strengthening cooperation under the BRI in areas like tourism, healthcare, the digital economy, finance and green industries will inject new momentum into Nepal's economic growth. Tourism is a cornerstone of Nepal's economy. As cultural and tourism ties between China and Nepal grow, people-to-people exchanges will become more frequent, further promoting mutual development.

China and Nepal share a common vision of advancing economic development, providing a solid foundation for the continued deepening of their BRI cooperation. Despite pessimistic views expressed by some foreign media, which often exaggerate the challenges facing bilateral relations, BRI cooperation between the two countries continues to strengthen and make progress.

South Asia, to some extent, presents a complex geopolitical and economic landscape. Regional stakeholders and international observers are closely watching BRI cooperation between China and Nepal, particularly its potential to drive economic growth in both countries and enhance connectivity across the Himalayas. As Nepal deepens its participation in the BRI, its prospects of becoming a key hub for regional connectivity are likely to strengthen. This development suggests that small-sized nations, by leveraging their strategic geographic position, can promote regional integration while maintaining their strategic autonomy.

Nepal's ongoing economic growth and efforts to improve cross-Himalayan connectivity could also serve as a model for similar cooperation in other regions. Traditionally, geographical barriers have been viewed as obstacles, but the ongoing cooperation may demonstrate that infrastructure connectivity can overcome a range of challenges. These efforts could open up new pathways for cooperation and progress.

The author is a reporter with the Global Times.
bizopinion@globaltimes.com.cn